La Française des Jeux (FDJ), France’s historical lottery and main sports betting operator, has taken out a new comprehensive insurance policy with numerous top-tier French and international insurers and reinsurers to provide protection against its counterparty risk.
The new insurance policy is effective from January 1st, 2020 and provides a guarantee for the gains falling within its scope on an aggregate basis.
The policy provides annual protection of up to €150 million, while a 2019 decree set the maximum amount payable per event to €100 million, as of January 1st, with a €6 million excess.
The firm explains that one of the changes involved in the tax and regulatory reform carried out as part of its privatisation was the discontinuation of the “counterparty fund” system. This operated as a form of insurance that the state provided the FDJ by allowing it to keep a slice of its gaming levies to set aside as a guarantee fund, designed to be used in the “extremely unlikely event of a high payout.”
The company continues to note that this reform is part of a broader process of clarifying the relationship between the state and FDJ, with the latter now being responsible for covering its counterparty risk via securing insurance protection, at its own expense.
In response, the company has today announced that it has taken out a new insurance policy to protect its counterparty risk, which was drawn up by insurance and reinsurance broker, Marsh.
FDJ adds that all costs related to this new insurance policy are in line with its expectations and are covered by the planned budget.
