BOOKMAKER PADDY Power is entering the French market through a joint sports betting venture with the country’s state-owned tote operator, the Pari Mutuel (PMU).
The Dublin-listed company said yesterday it would manage risk and pricing – odds – for the PMU’s planned sports betting service, which it will launch next year as the French government opens up the country’s gambling market.
The new venture will create an initial 50 new jobs at the Irish company’s HQ in Tallaght, a figure that the group said yesterday could rise to 200 over three years.
Chief executive Patrick Kennedy said yesterday the French online sports betting market was currently returning around €250 million a year in winnings. He estimated this could rise to around €1 billion a year over three years as liberalisation helped to drive growth.
There are a number of unlicensed operators offering sports betting in the French market. It’s likely that the government will close these down ahead of regulating and licensing the industry.
The PMU is Europe’s biggest betting organisation, and generates a turnover of €9.3 billion a year through retail outlets, remote betting and on-track at French racecourses.
It is state-controlled, and its board includes representatives of the French departments of finance and agriculture, as well as its racing industry, which is funded from the pool’s profits.
The company operates a pool system similar to the Irish and British totes. This involves taking out a percentage of the total amount bet to cover its costs and generate a profit. The remaining pool is then paid out in proportion to the holders of winning bets. As it is a pool, punters’ winnings are determined by the number of winning tickets and are paid as a dividend calculated to a €1 stake.
The PMU will be using the Irish company’s expertise in fixed odds betting and risk management.
Paddy Power has developed risk-management models for sports betting, including betting in running, which allows punters to bet on events such as football matches as they are still under way.
These systems are developed in-house and are owned by the company. Most of the jobs will be generated in this area, and, according to Mr Kennedy, will be “high-end”.
He said that Paddy Power was continuing to look for similar opportunities, and added that winning the PMU as its first partner was particularly significant given the French player’s size and reputation.
