France sells off national lottery.
The French government aims to sell its significant share in the country's national lottery, Française des Jeux (FDJ), to a publicly traded gaming company. However, this initiative has received criticism. Additionally, a new regulatory authority is set to be created.
French Finance Minister Bruno Le Maire has proposed to President Emmanuel Macron a bill named "Action Plan for Growth and Transformation of Companies." This plan includes selling the French government's substantial stake in FDJ to a domestic, stock market-listed gaming operator. FDJ is the sole official French lottery operator and possesses the monopoly on instant win and lottery games in France, with over 40,000 sales outlets and approximately 29 million players participating in each draw. Recently, FDJ has also expanded its offerings to the online market.
The French government holds a 72% stake in the business, and details about the sale are still unknown. Moreover, shares in the airport operator Aeroports de Paris SA and the energy company Engie SA are intended to be sold. The proceeds from these sales will be used to support growth-oriented French companies and fund the "Industry of the Future" fund proposed by Macron.
Le Journal du Dimanche recently suggested that the French government could offer half of the FDJ shares on the French stock market. It is also predicted that the sale would not occur until early 2019.
Macron's administration is facing criticism on two fronts. In a 2017 report by the French Audit Court (CdC), the government is condemned for its role as a shareholder and encouraged to relinquish its "uneven holdings" in this sector. Furthermore, the French government has announced its intention to create a new regulatory body to combat money laundering, fraud, and gambling addiction in the gaming industry. It remains unclear if this new body will supplant or complement the existing French gaming regulatory authority, Arjel.
The privatization of Aeroports de Paris, which includes both Charles de Gaulle and Orly airports, marks the beginning of Macron's planned series of privatizations. The state currently owns 50.6% of the airports. The sale is estimated to bring in about eight billion euros for the state treasury. However, this plan has not garnered universal support, as the political opposition has declared their strong opposition.
Christian Eckert, a former socialist budget minister of France, spoke out against the planned privatization of FDJ. Eckert described gambling and airports as public enterprises with duties such as addiction prevention and the management of collective air traffic. He refers to the FDJ as "the most lucrative source of revenue in France," while criticizing the 2015 privatization of the Toulouse airport due to mismanagement by Chinese investors.
Even François Lenglet, a perceived liberal French economic journalist, opposes Macron's plans and leads an initiative against the proposed privatization. Lenglet suggests that retaining the Paris airports in state ownership and using the dividends to pay down the national debt would be more advantageous.
French media and politicians from all parties recall that France incurred substantial losses in 2006 through the privatization of a significant portion of its motorways. Whether Macron will pursue his plans to their fullest extent or if the president will retain one or two "blue-chip stocks" for the government is a matter of speculation.
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