Policy Makers Face Growing Concerns Over Challenges Facing FDJ in the UK

(AsiaGameHub) –   The most recent Q1 operator results highlight a structural shift in the UK market, which is growing more imbalanced amid regulatory reforms.

This comes as FDJ United’s otherwise solid performance period was hampered by challenges in the Netherlands and the UK.

The operator has now joined the chorus of voices urging UK authorities to take stronger action against the expansion of the black market and foster a competitive environment for all operators.

Speaking to investors following the release of the group’s Q1 financial results, Pascal Chaffard, Head of FDJ’s Online Betting and Gaming Business Unit, stressed that any tax hikes or regulatory adjustments must be paired with an assurance of a ‘level playing field’ for all operators.

He said: “What we fear is the development of offshore offering. We have flagged this clearly to the UK Gambling Commission and government, and they have said that they understand the point and will give more capacity to the UKGC to fight [the black market].

“But we are not completely sure that it’s fully done, and it is something that we will continue to work on. We cannot have more stringent regulation and tax levels and not have a good fight against illegal actors.”

UK Chancellor Rachel Reeves announced in November 2025 an increase in the Remote Gaming Duty to 40%, which took effect on April 1 of this year. Additionally, the general betting duty for remote betting will rise to 25% on April 1, 2027.

Simultaneously, the government allocated £26 million to the UK Gambling Commission (UKGC) to combat black market growth. Yet industry stakeholders have cautioned that this sum is a ‘drop in the ocean’ considering the financial resources of the groups running illegal operators.

Despite this, Chaffard emphasized that targeting the online black market is feasible, and this point has been ‘explained in detail’ to both the UKGC and the UK government.

“At the end of the day, it’s okay to have more taxes, it’s okay to have more objectives for protecting players, but it’s not okay to have level playing that is the same for everybody,” he added.

Chaffard acknowledged that the UK market ‘remains challenging’ for FDJ, which operates Unibet and 32Red following its acquisition of Kindred in 2024.

Specifically, he told investors that FDJ ‘underestimated how hard it would be to fine-tune compliance regulations’, though no specific details were shared about which rules the company is struggling with most.

Even so, and despite a more than 20% year-over-year drop in UK revenue during Q1, the UK market is still profitable for FDJ. Chaffard expressed optimism that the company can capitalize on ‘smaller and weaker’ operators that might be pushed out as the market consolidates amid tax increases.

“The main problem that we have is not the number of active players, it’s the drop in the average revenue per user,” said Chaffard, as he quelled concerns that FDJ would withdraw from the market.

Unibet and 32Red are both robust mid-tier operators; however, the concerns felt by operators of this size regarding the UK market aren’t consistently shared by larger players.

Flutter and Entain have both adopted an energetic stance toward the new UK market environment, even hinting at further investment in the market.

This trend should worry policymakers, as the market as a whole faces growing consolidation risks. A reduction in the number of operators creates a significant gap that the black market can exploit.

The UK market’s downturn and the challenges operators face aren’t unexpected; they were widely foreseen amid market pressures and further accelerated by Labour’s tax hikes.

Late last year, the independent gambling industry think tank BetterGambling released a report forecasting that over 800 casinos will be forced to exit the market by 2027.

The report warned that as regulatory frameworks tighten, the market will no longer be economically viable for operators not in the top tier, as referenced by Chaffard.

Reviewer at BetterGambling, Diana Tunsu, warned: “The economics are straightforward. Operators with GGY below £3 million per year are faced with a stark choice: spend significantly on compliance or consider strategic options including withdrawing from the market.”

At the time, policymakers—seemingly focused on raising taxes to exorbitant levels—could easily dismiss the study, but market developments since then, even in this early phase, indicate we’re heading toward a less competitive landscape.

European tax reforms begin to take their toll

FDJ also highlighted the ongoing impact of tax changes across key European jurisdictions, including France, the Netherlands and Romania.

Across its land-based, lottery and online betting and gaming divisions, FDJ expects an approximate €90 million impact in 2026.

In July 2025, French authorities implemented minor tax increases across lottery, sports betting and online poker.

Meanwhile, the Netherlands and Romania have also raised taxes on online gaming over the past year.

Regarding the Netherlands specifically, Chaffard said the situation is beginning to ‘stabilise’, and the company is taking actions to drive ‘some growth’ in its operations there.

However, he noted a Dutch regulator’s report stating that overall market revenue shrank by more than 20% in 2025, underscoring the difficulty of returning to growth in the jurisdiction.

FDJ has laid out plans to turn around its performance in the UK and Netherlands through targeted task forces, which Chaffard explained involve ensuring the group’s different departments don’t work in silos and collaborate effectively.

Meanwhile, FDJ is also seeking to shift to an ROI-led marketing and promotional strategy, while streamlining the organisation.

Overall, FDJ United reported a modest growth in gross gaming revenue to €2.18bn. However, the aforementioned tax changes resulted in a 3% year-on-year decrease in revenue to €895m.