Since its 2019 listing, French national lottery operator FDJ United — formerly La Française des Jeux — has doubled revenue and operating profit, while its dividend has quadrupled. Few IPOs age so politely.
The group occupies a comfortable position. It holds a de facto monopoly on gambling in its home country. The French state owns roughly one fifth of the capital, while veterans’ associations control another sixth. Neither constituency is likely to favor reckless experimentation.
The business has also broadened. The acquisition of Kindred, owner of the popular Unibet platform, pushed FDJ deeper into online gaming, which now represents more than a third of the business.
Today the group ranks among Europe’s leading gambling operators, with France still accounting for about three quarters of revenue. As a whole, two thirds of the group’s activities remain regulated markets with limited or no competition.
In early 2025 the French government tightened its tax grip on gambling revenues — a predictable move from a cash-strapped owner when it controls a business that simply prints money.
Investors reacted sharply. FDJ’s market capitalization has fallen roughly 40 per cent over the past year. Understandable, perhaps, though probably excessive. The state wants its dividends and will probably not kill its cash cow.
Late in the year, JPMorgan added to the gloom. A research note warned that tougher gambling regulation across western Europe could eventually weigh on growth, chiefly because of regulatory tightening.
History suggests caution with that conclusion. Tobacco companies have operated under tightening regulation for decades. Their profits shot up thanks to it. If anything, regulation tends to eliminate weaker or unlicensed competitors.
FDJ shares now trade at yields more typical of a stressed balance sheet. The dividend yield is approaching double-digit territory.
That looks curious for a well-capitalized company operating quasi-monopolistic franchises, with a dividend comfortably covered by cash flow and expected by every shareholder – including the French treasury, which can hardly afford to be picky about its cash inflows.
Investors searching for neglected assets may find the situation familiar. Petrobras and South Bow offered a similar setup at the time — strategic infrastructure, steady cash generation, limited competition, yet conspicuously overlooked by investors before their sudden repricing.