Gaming/ Gambling sector in France

Note: This is a daily stock update and the information stands true as of 03/10/24, 09:00 CET.

Company Update:
According to an article in French newspaper Les Echos, French taxes on gaming set to increase substantially. The goal is to increase the tax collected from the sector by c €500m in 2025 from €1.2bn to €1.65bn. All segments (lotteries, betting, gambling, online poker) would be impacted. The social tax on Gross Gaming revenues would be leveled up for all segments and CSG (another social tax) for winners would also be raised to 9.2%, in line with that paid on revenues. The government will also create a tax on marketing and advertising spendings for the sector. The gaming sector is already heavily taxed and substantially more than in other European countries.

Expert Opinion:
This is obviously a negative for all stocks involved in gaming in France, and first and foremost, on FDJ (Buy €7bn mkt cap, 63% upside). Switching to Entain seems like a good idea. Despite its arguably lesser quality, momentum on Entain is improving and discount to the sector is massive, especially on the back of our 2025 numbers.
 

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