International Game Technology PLC (IGT) has completed the sale of Lottomatica, its Italian sports betting and gaming B2C businesses, to Gamenet Group SpA for €950m.
In a statement, the company confirmed that its wholly-owned subsidiary, IGT Lottery SpA completed the sale of 100% of the share capital of Lottomatica Videolot Rete SpA and Lottomatica Scommesse Srl, to Gamenet, a subsidiary of funds managed by an affiliate of Apollo Global Management, Inc.
IGT will use the funds received at a closing net of approximately €94m (representing the aggregate cash held by the subsidiaries) to pay transaction expenses and reduce debt.
Finalising its acquisition, Gamenet has confirmed that it will now operate all B2C units under the Lottomatica brand to benefit from its new assets’ heritage identity with the Italian public.
“A new Lottomatica becomes the market leader of Italy’s regulated gaming market, leading the business segments of online, sports betting and gaming machines,” said Gamenet.
Providing a breakdown of assets, Gamenet revealed that a new-look Lottomatica will operate a franchise network of 3,000 betting points, 1,400 gaming halls,13,600 tobacconists/bars gaming machines and 120 gaming venues.
The formation was branded as a ‘strategic milestone’ by Apollo Global, which underscored that Italy would now be served by a new gambling giant that had recorded total revenue of €1.6bn and handled €22bn of wagers during 2019.
Apollo Partner Michele Rabà said: “Our funds have backed Gamenet with a significant equity injection to perform this transaction, which reshapes the Italian gaming market.
“We are enthusiastic about the continued growth prospects of the company following this transaction and we will continue to support Gamenet, now Lottomatica, in consolidating this sector beyond Italy.”
A new Lottomatica is formed amid a disruptive backdrop of changing regulatory dynamics within Italian gambling – a market that has witnessed year-on-year tax increases since 2017 alongside heightened compliance enforcements imposed by the government.
Despite its significant divestment, IGT will retain its presence within Italy as its established Lottomatica B2B subsidiary will continue to serve as the operating company of Italy’s SuperEnalotto lottery.
IGT did not disclose whether it would move to rebrand its Italian B2B unit, avoiding a clash with Gamenet’s new property.
“This transformational deal makes our combined group one of the leading betting and gaming companies in Europe,” commented Guglielmo Angelozzi, CEO of the new Lottomatica.
“We now turn our focus to the rapid integration of all our assets and expansion into new geographical markets. We firmly believe that with our capabilities, our proprietary technology, our financial strength and the support from the team at Apollo, we will be able to effectively diversify in new markets and capture significant growth and consolidation opportunities.”