Flutter targets €1 billion Italian lottery

Flutter Entertainment Group is considering bidding for the main lottery license in Italy, a market dominated for three decades by IGT (International Game Technology). According to sources familiar with the matter, Flutter is actively exploring options, ranging from a solo bid to working with a strategic partner.

A market with high potential

The current license will expire in November 2025, paving the way for a new award. The Italian Customs and Monopolies Agency has set the minimum bid price at €1 billion, with bids due by March 17. The nine-year contract could generate an estimated gross revenue of €4.3 billion.

An industry analyst, who preferred to remain anonymous, said: “Partnering with another entity could strengthen Flutter’s position against incumbents like IGT. However, the outcome remains uncertain at this stage.”

Origins and growth of Flutter

Flutter Entertainment, formerly known as Paddy Power Betfair, is an Irish company that was formed in 2016 following the merger of two online betting giants: Paddy Power and Betfair. Paddy Power, founded in 1988, first established itself as a traditional bookmaker in Ireland before turning to online betting, while Betfair, created in 2000, revolutionized the sector thanks to its betting exchange platform. The merger of these two complementary entities gave birth to Flutter Entertainment, a group capable of meeting the needs of a rapidly expanding market, combining technological expertise and strong brand awareness.

Since its inception, Flutter has grown rapidly through strategic acquisitions and diversification of its offerings. The company has notably expanded its portfolio by integrating companies such as The Stars Group, owner of PokerStars, and FanDuel, the leader in sports betting in the United States, and Sisal in Italy.

These acquisitions have allowed them to become a key global player in the world of sports betting, online casino games and poker, while strengthening its position in key markets such as North America and Europe. Today, Flutter is a global leader in gambling and gaming, with a presence in more than 100 regulated markets.

Flutter and Italy: a solid presence

This is not Flutter’s first foray into the Italian market. In 2022, the group acquired Sisal, a lottery and sports betting operator, for €1.9 billion. Sisal already runs several lottery businesses and offers Flutter an ideal platform to scale up its cross-selling strategies.

In 2024, Flutter strengthened its foothold in Italy by acquiring Snaitech for an undisclosed amount. Snaitech, known for its extensive network of points of sale and innovative digital platforms, enabled Flutter to consolidate its market share to nearly 30%. This acquisition is part of a strategy to capitalize on synergies between the different gambling segments and offer a unified customer experience.

Flutter CEO Peter Jackson, however, insisted on a disciplined financial approach.

“We will only consider this opportunity if it fits into our overall economic strategy.”

Opportunities and challenges

The acquisition of the lottery license would offer Flutter an opportunity to further diversify its revenues. The lottery, often considered a loss leader, could attract new players and engage them in other gaming offerings, including online betting and casino games. 

However, this market is not without challenges. Competition is expected to be tough, with IGT determined to renew its mandate. In addition, the high amount of the initial offer could discourage some players, particularly in a tense economic context.

A mixed global context

While Flutter explores opportunities in Europe, its performance in the US raises questions. Recent financial results show a downward revision of revenue forecasts for 2024, in particular due to poor results in NFL betting. These adjustments have led to a slight decline in Flutter’s share price, revealing some nervousness among investors.

Despite this turbulence, the group seems firmly committed to strengthening its presence in more stable markets such as Europe, where it can capitalize on its existing assets. If it decides to participate in this auction, it could redefine its position in Italy and in the European gambling sector as a whole. With a well-defined strategy and considerable resources, the company has the necessary elements to succeed.

How does the lottery work in Italy and what role does IGT play in its management?

The lottery in Italy, known for its iconic games such as SuperEnalotto, is a central part of the country’s gaming industry. Its operation is based on regular draws, offering players the opportunity to win often impressive jackpots. These lottery games, widely accessible through physical points of sale and online platforms, are governed by strict regulations to ensure their transparency and fairness. The revenues generated by these lotteries also contribute to the financing of various public projects, particularly in the fields of education, culture and infrastructure. 

For more than three decades, the licensing system for the operation of lotteries in Italy has been dominated by International Game Technology (IGT), a global player in the gaming sector. IGT, through its Italian subsidiary, has been able to maintain this position thanks to its technological expertise and commitment to innovation. The company not only manages the infrastructure necessary for the operation of the lotteries, but also ensures compliance with the regulations imposed by the Customs and Monopolies Agency (ADM), the regulatory authority in Italy. This unique licensing model has allowed IGT to play a central role in the management and evolution of Italian lotteries, ensuring both their reliability and their attractiveness to players.