French competition authority clears FDJ's acquisition of Kindred, raises concerns over cross-selling

France's competition regulator, l’Autorité de la Concurrence, has approved the acquisition of online gaming operator Kindred Group by lottery monopoly Française des Jeux (FDJ), while cautioning FDJ against leveraging its monopoly to promote Kindred’s products.

The competition authority flagged the risk that cross-selling Kindred's online betting and gaming products to FDJ's monopoly lottery customers could increase player risks. The watchdog raised concerns about promoting Kindred’s offerings, such as Unibet’s sports betting and online poker, to FDJ’s monopoly customer base.

“The new entity could be tempted to create links between the monopoly games offered by FDJ and the games offered by the target by promoting online sports and horse race betting and online poker to monopoly game players,” the authority said in a statement.

To address these concerns, FDJ has pledged to keep its monopoly and commercial brands distinct, with separate websites and customer databases for FDJ and Kindred brands. Players will need to sign up separately for accounts with both entities. Additionally, FDJ has committed not to display its branding or logo on Kindred’s products, ensuring no overlap between the two brands.

FDJ had previously faced similar scrutiny when it acquired ZEturf’s French operations. That deal included ZEturf’s ZEBet brand and ZEtote technology, offering horse racing and racing pools. FDJ has now reiterated its commitment to maintain brand separation following the Kindred deal.

The €2.45 billion acquisition is part of FDJ’s strategy to diversify into the online gambling market and strengthen its position as a "European gaming champion." FDJ’s managing director, Stéphane Pallez, described the acquisition as a major step toward entering the commercial online betting space.

FDJ's purchase of Kindred follows its acquisition of ZEturf and Premier Lotteries Ireland, marking its continued push into the broader European gambling market.

The competition authority also highlighted FDJ's prior issues in separating its monopoly operations from its competitive ventures. Both FDJ and Pari-Mutuel Urbain (PMU), the horse race betting monopoly, have faced accusations of using their monopoly status to unfairly compete with private operators.

FDJ remains under investigation by the European Commission regarding a €380 million payment for its 25-year monopoly rights, which has been challenged as potential state aid. Two complaints filed in 2021 prompted the Commission to take up the matter and it is yet to make a final ruling.

As part of the new approval, FDJ agreed to several behavioral remedies to mitigate potential harm to competition, continuing the commitments made during its previous acquisitions.

“In light of the commitments made by FDJ, the Autorité cleared the transaction following the phase one examination,” the regulator said.