Operating the Italian lottery since 1993, International Game Technology (IGT) faced competition this year when the tender was launched. Notable competitors included Novomatic, Allwyn, and reportedly, Flutter. IGT’s current term will expire in November this year.
Today, IGT announced its leadership in the successful LottoItalia consortium, alongside Allwyn, Arianna 2001, and Novomatic Italia. The consortium will oversee the lottery until November 2034.
The consortium’s bid includes an upfront payment of €2.23 billion, to be paid in three instalments between the award date and April 2026. The first two instalments, €500 million and €300 million, are expected in 2025.
Barry Jonas from Truist Securities noted that the new upfront fee is significantly larger than in 2016, with estimates now ranging between €1.3 billion and €1.5 billion.
IGT CEO Vince Sadusky mentioned during an earnings call that the company had allocated a $500 million investment for the Italian lottery if granted the license, part of a larger €1 billion term loan.
Sadusky emphasized that the substantial operational fee reflects the perceived value of the new license. Despite a 10% decline in group revenue in Q1, the company is optimistic that this investment will boost revenues and long-term profitability.
“We plan to expand our iLottery sales and venture into the Italian B2C iCasino, sports betting, and other digital gaming realms,” Sadusky added.
Allwyn will contribute 32.5% towards the license fee and capital expenditure. CEO Robert Chvatal expressed enthusiasm about continuing the partnership with IGT in Italy for the next nine years.
“We are delighted to continue supporting IGT in enhancing the Italian Lotto and promoting responsible play,” Chvatal affirmed.
IGT clinches ‘one of the most crucial lottery contracts’
As per the Financial Times, the concession rate from total wagers will be 6%, with an additional 8% gross fee via digital channels.
In a statement, IGT’s Executive Chair Marco Sala emphasized the significance of the Italian lottery concession as one of the world’s most crucial lottery contracts.
“We are pleased and honored to continue our work with the ADM for another nine years,” Sala declared.
In Truist’s statement, Jonas indicated that IGT was expected to win the rebid based on the regulator’s scoring system, which weighs financial aspects at 60% and technical elements at 40%. IGT emerged as the successful bidder based on this scoring system.
Jonas mentioned that Flutter losing the Italian lotto to IGT is not expected to have a major negative impact. He noted that traditional lotto is a different focus compared to Flutter’s core digital business.
