FDJ United (FDJU FP) operates France's lottery under exclusive rights. The stock is down ~40% from 2025 highs amid French tax increases, regulatory headwinds, and deteriorating online performance.

S3 Short Interest is currently at 11.9M shares, up 83% YTD. Borrow availability is down to 5.7M shares and utilization of lendable shares is 70%, suggesting borrow costs may rise.

MSCI deleted FDJU from its France Index on Feb 10, effective Feb 27, also removing it from MSCI Europe. S3 Long Interest shows passive funds own 102M shares, equating to 55% of float.

Short interest increases in FDJU ahead of MSCI rebalancing.

Increased short interest in FDJU likely reflects both fundamental bearish views and index-related technical factors. Fundamentally, the company faces French gaming tax increases, regulatory tightening in key markets, and weaker online betting performance following its debt-financed Kindred acquisition.

MSCI's February 10 announcement removing FDJU from the MSCI France and MSCI Europe indices effective February 27 creates technical selling pressure. Passive funds tracking these benchmarks must sell their FDJU holdings by the implementation date. Market participants often position ahead of announced index rebalances during the period between announcement and implementation. This anticipated index-driven selling adds technical pressure, with potential additional rebalancing from the March STOXX 600 quarterly review.

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