(Reuters) – La Française des Jeux (FDJ) shares tumbled on the stock market on Thursday, with traders citing information from the economic daily Les Echos according to which the French government plans to increase social security contributions for the gambling sector from 2025 in order to support the Social Security budget.

FDJ shares fell 5.4% to 34.79 euros on the Paris Stock Exchange around 2:03 p.m. GMT after dropping nearly 10% earlier in the day. The stock is on track to record its worst session since April 2020.

According to an article in the newspaper Les Echos, citing sources, the government of Prime Minister Michel Barnier plans to widely modify the social security contributions that weigh on lotteries, casinos, sports betting or online poker in order to slow down the growth of gambling and games of chance.

The measure, which aims to recover nearly 500 million euros per year, will be included in the social security financing bill (PLFSS) which must be presented on October 10, specify Les Echos.

“To our knowledge, the PLFSS, which will soon be presented to the Council of Ministers, will not contain a tax measure concerning gambling,” an FDJ spokesperson told Reuters on Thursday.

The group, whose activities include lotteries and scratch games, is 20% owned by the State.

“We understand that the company had contacts at the highest level at the Ministry of Finance, before giving this statement,” says Lucas Excoffier, European equities trader at Oddo BHF Corporate & Markets.

“The market reaction is therefore very severe, even if this type of news of course fuels the risk of regulation in the gaming sector, in particular the FDJ.”

(Written by Diana Mandiá, with Alban Kacher, edited by Blandine Hénault)

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