The IGT-led consortium LottoItalia will be proposed as the licensee for the multi-billion-euro Italian lottery contract through to 2034.
The lottery and gaming supplier giant announced today (19 May) the Judging Commission had completed its analysis of the technical and economic offers in the bid for the Italian lottery licence.
LottoItalia, the group composed of Allwyn, Italian provider Arianna 2001, Novomatic Italia and led by IGT, will be proposed to the national gaming regulator ADM, which is expected to make the award notice within the next 35 days.
Marco Sala, executive chair of IGT’s board, said: “The Italian Lotto concession is one of the world’s most important lottery contracts. IGT and its predecessor companies have successfully managed the licence for 30+ years through constant innovation and the introduction of cutting-edge technology.
“The award is very gratifying, and we are honoured and excited to continue working with the ADM for nine more years.”
The consortium’s bid included a €2.23bn upfront licence fee payable in three instalments, between the time of award and April 2026.
IGT said it expects the first two instalments of €500m and €300m to be made in 2025, with the balance made in 2026.
Once paid, the nine-year licence term secures the business until November 2034, with the concession rate collected from total wagers set at 6% on top of an additional 8% gross fee collected through the digital channel as distributor fee.
IGT to keep operational control of business
IGT clarified it will maintain operational control of the business, with Allwyn, the current UK National Lottery licensee, contributing a pro-rata share of licence fees and capital expenditure.
IGT CE Vince Sadusky added: “The €2.23bn investments in upfront fees reflect the significant value of the new licence and IGT is confident that the investment will enhance our revenue and profit potential.
“The exciting innovation pipeline with fresh launches planned for commencement of the new licence will drive Lotto wager growth.
“In addition, we plan to significantly grow our iLottery sales and leverage that momentum to expand into the Italian B2C iCasino, sports betting, and other digital gaming business.”
Responding to the announcement, analysts at Truist Securities said the news potentially removed what had been a clear investor overhang around losing IGT’s largest contract, which represents over a third of its reported EBITDA.
Barry Jonas, Truist managing director, said: “Recall, IGT’s nine year concession ends later this year and it was competing [with Flutter] for a new nine year concession. While we think the shares should be up today overall, the new €2.23bn upfront fee is substantially larger than the 2016 process (€770m at the time) as well as greater than what we had been modelling (€1.3bn-€1.5bn).”
While the fee is larger than expected, Truist added digital gaming being part of the deal could yield higher returns than the business has seen in the past.
The news comes as IGT looks to divide its gaming and lottery businesses, with the latter to become a pure-play lotto company after its gaming supply division will be sold off to Apollo Global Management and combined with Everi Holdings.
