Cash & Liquidity Management
Published  6 MIN READ
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Interview – Gilles Bourron

Treasury Manager, PMU (Pari Mutuel Urbain)

“Sepa, an opportunity to reduce the impact of cash-flow on internal information systems”

Could you give us a brief description of PMU?

Founded in 1931 and formed as an Economic Interest Grouping in 1985 with 51 betting companies as members, PMU arranges bets on horse racing in a mutual fashion, that is to say without taking any risks, by acting as the clearing house. It contributes to the development of the equestrian industry network which employs nearly 75,000 people in France. PMU arranges two networks: one a physical network, representing 90% of our activity and made up of over 10,000 outlets held by independent traders using PMU licences, the other long-distance sales, especially over the internet, which represent 10% of our activity and are experiencing great growth. In 2009, the accumulated stakes rose to EUR 9.3bn, of which 75% was returned to the punters, 12% to the State and the balance, EUR 736m, returned to betting companies, after deducting PMU’s operating expenses.

Presumably the business is directly affected by the recent liberalisation of online gaming?

It really is greatly affected, as with 300,000 online clients and EUR 661m  staked in 2009, PMU is already of course one of the principal betting operators in France, but also in Europe, even though our customers are exclusively French. As you can imagine, the company largely anticipated the effects of the law of the 12 May 2010 which opened the online gaming sector to competition, aiming to become a global games operator by offering from the outset sporting bets and poker in addition to horse racing. For the latter two activities, our policy was to establish agreements with operators who already had recognised technical expertise – with Paddy Power, the principal Irish bookmakers, for betting activity at fixed odds, and for poker, with Party Gaming. This meant that PMU was able to make one of the best offers on the market to its customers as soon as the licence had been obtained from ARJEL – the authority that controls online gaming in France.

How is the cash flow managed?

For the physical network, our system of taking bets via terminals is totally centralised and allows us to know, in real time, the cash balance of our 10,000 outlets. Centralisation of treasury is ensured by a system of cash pooling by which, three times a week, the managers of each outlet pay their surplus into an account in one of the ten authorised bank networks. This system of concentration of liquidity, which allows us to have at our disposal funds between two and four days after deposit, generates almost a million withdrawals a year. If there is a case where the bank rejects a transaction, bet-taking at the outlet concerned is suspended while awaiting clarification. Despite the fact that the risks linked to cash are relatively well-distributed because of the size of the network, PMU has recently further reduced them by implementing a totally integrated electronic banking system.

Our system of taking bets via terminals is totally centralised and allows us to know, in real time, the cash balance of our 10,000 outlets.