IGT's Italian Lottery Contract Renewal Could Boost Struggling Stock
International Game Technology (IGT) may benefit from upcoming clarity regarding the Italian lottery contract, despite its stock dropping 33% over the past year. Italy's gaming regulator recently released RFP documents that analysts consider "modestly favorable" for IGT.
IGT headquarters with blue glass exterior
The Italian lottery contract is significant for IGT, contributing approximately:
- €477M in consolidated revenues
- €386M in adjusted EBITDA
- 30% of Global Lottery revenues
- 20% of adjusted EBITDA
- 30% of estimated IGT pro-rata RemainCo adjusted EBITDA
While IGT has operated Italy's lottery for over 30 years, Flutter Entertainment is expected to compete for the contract. Flutter already has a strong presence in Italy through:
- The pending acquisition of Playtech's Snaitech
- The $2.2 billion purchase of Sisal in 2022
- Existing operations of PokerStars and Betfair
IGT maintains several competitive advantages:
- Incumbent operator status
- Extensive lottery operation experience
- Technological ownership
- Familiarity with the market
The March 17 submission deadline could favor IGT, as competitors may struggle to develop comprehensive proposals within this timeframe. The new RFP scoring matrix allocates less weight to pricing (previously 70/30) and more to technical aspects, potentially benefiting IGT's established position in the market.
Italy represents an attractive market as Europe's largest gaming market outside the UK and the Eurozone's third-largest economy, making this contract particularly valuable for operators.
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