In Europe and now increasingly across the US, there’s been a trend for lottery operators to branch out into sports betting.
But while lotteries are typically still run as monopolies with a remit to fund charitable causes, they often find themselves in a very different marketplace in sports, where they compete with private operators.
Patrick Buffard, executive vice president charge of sales, sports betting, media, TV production and events at France’s FDJ, explains how the operator balances the two verticals.
iGB: You have a separate brand for your sports betting products. Do you think it is important for lotteries to separate their betting offerings from their lottery sales in some way?
Patrick Buffard: FDJ does indeed operate the ParionsSport sports betting brand separately from its lottery activities. This distinction serves several purposes.
The first has to do with brand awareness. Our lottery products are marketed under their own names: Loto, EuroMillions, Banco, Cash, etc. So FDJ had to create a sports betting brand whose identity could explicitly reference the world of sport and betting, hence the name ParionsSport (‘Let’s bet on sport’).
The next factor was being able to market different types of gaming products to different player profiles. Lottery games are pure games of chance and are aimed at a wide audience – people of all ages, both men and women – while sports betting features an element of expertise and is geared toward a younger and more male audience, with more of an interest in sport.
Lastly, it’s worth noting that most lotteries worldwide market their sports betting products through specific brands or subsidiaries to clearly differentiate them from their lottery activities.
The ParionsSport brand groups together a wide variety of betting products (pre-match betting, live betting, fixed-odds betting, pari-mutuel betting) amidst an increasingly liberalised online sports betting market in France and stiff competition from international operators.
iGB: You operate as a monopoly in retail betting but in a competitive market for online betting. Does this mean you have a different approach in retail compared with online?
PB: FDJ has exclusive rights to sports betting offered at points of sale, whereas online sports betting is open to competitors, within a regulated framework. To comply with requirements arising from the coexistence of these two regulatory frameworks, the group runs its sports betting activities through two distinct brands: ParionsSport Point de Vente (point-of-sale) and ParionsSport En Ligne (online).
Driven by French audiences’ growing interest in major sporting competitions, sports betting is now a strategic growth segment in which the group has seen the sharpest increase in its stakes since 2010. Sports betting generated €3.2bn in stakes in 2020: 20% of the group’s total stakes.
Regulations provide a different framework for online products and those offered at points of sale. More bets are offered for online products (with no live betting at points of sale), along with more sports (40 online vs. 36 at points of sale) and a higher maximum player payout ratio (85% online vs. 76.5% at points of sale).
Online betting also offers a more immersive experience, with live betting and video streaming. Point-of-sale betting is appealing due to the social aspect of the location (bar or café) and the availability of ParionsSport pari-mutuel betting products (Loto Foot, Loto Rugby, Loto Basket), which offer big jackpots. To date, ParionsSport’s Loto Foot is France’s only sports betting game that can make players millionaires.
It’s also worth noting that we’ve invested heavily over the past few years to make the digital experience simple and seamless throughout our physical network. For example, we’ve developed a mobile app that lets players prepare their bets, generate a QR code and validate their bets at the point of sale. It is currently used by 80% of players in our physical network.
iGB: Lottery operators are often said to be offering poorer value to bettors using their sportsbooks than other operators, is this something you’d agree with or not?
PB: Player payout ratios are set by the French regulator. The maximum player payout ratio is 76.5% for retail sports betting and 85% for online sports betting. Our online offer ParionsSport Point de Vente has to respect the 85% limit, but our objective is always to propose competitive odds to our players.
iGB: What do you think lotteries offer players apart from value? For example, are things like trust and brand important in attracting players?
PB: In every country, lotteries help fund good causes that benefit the community. When it was founded in 1933, La Française des Jeux’s mission was to help wounded World War One soldiers. Since then, it has also helped funding other good causes like ensuring access to sport for all and restoring cultural heritage sites.
As the country’s leading operator in the gaming industry, FDJ is a reference in France for players and non-players alike. The group’s history, which spans back nearly a century, is part of the country’s history. Its products, its brands and its distribution network made up of nearly 30,000 points of sale are major assets.
FDJ’s gaming range is diverse, innovative and secure, thanks to our tried-and-tested technological expertise. The group is developing a regulated and responsible gaming model. It promotes the enjoyment of gaming in moderation, striving to lead the field in preventing excessive and underage gambling.
We believe that all of these aspects of who we are and what we do are key to winning and retaining the trust of French players.
The group’s recent initial public offering in 2019 – which was a success, particularly with individual investors – is an illustration of FDJ’s appeal and the trust it inspires in France.
iGB: How do you differentiate your site from other private operators in the French online market and what advantages do you think you have as the long-standing lottery operator in France?
PB: France’s online sports betting market is highly competitive, with 14 licensed online operators. It’s growing rapidly: between 2015 and 2018 the number of online players went from 1.2 million to 3.2 million. And the online market is now seeing more rapid growth than the market for sports betting at points of sale.
Our goal is to be a top-tier operator in online sports betting. Strengthening our foothold in that segment means rapidly building up a distinctive, competitive marketing mix. Winning over players online also means we need to deepen our customer insight, develop a more seamless user experience and scale up our innovation.
For example, we’re going to keep upgrading our technical platform, offering new features, enriching our range of betting options and making our odds more and more competitive.
2021 will be a major year for sporting events. On top of its intrinsic momentum, sports betting will be boosted this year by the UEFA Euro 2020, which is set to be the main highlight for the sector in terms of stakes, onboarding new players and visibility.
iGB: Is there much cross-selling or crossover between lottery players and sports bettors in France?
PB: FDJ has a broad player base made up of 23 million customers aged 18 and up, who play at either lottery games, sports betting or both, but this last category of “crossover” players remains a small minority. Sports betting tends to attract a younger, more male and more specific player profile than lottery games.
In addition, online our lottery and sports betting activities are operated through two sites, two brands and two different applications; FDJ is France’s sole operator of online lottery activities, whereas online sports betting is open to competitors. Our network of points of sale offers both types of products within the same physical space but under different brands, and both under exclusive rights.
iGB: Via Sporting Solutions, you supply other lotteries with B2B services. Why do you think so many lotteries are choosing to run their own sportsbooks?
PB: Our major contracts include partnerships with the Swiss, Portuguese, Israeli and Canadian lotteries. For all those lotteries, sports betting is a growth driver of their business and an interesting way to diversify their activity and reach new players. Running their own sportsbooks helps them to better market their offer in a competitive environment and reinforce customer relation and loyalty.