International Game Technology PLC (IGT) has won the tender process to continue operating the Italian lottery, pending regulatory approval.
Having been in the position since 1993, the firm will now propose LottoItalia – a consortium composed of Allwyn, Arianna 2001 and Novomatic Italia and led by IGT – to the Agenzia delle Dogane e dei Monopoli (ADM), Italy’s competition and markets watchdog.
The multinational gambling company beat out competition from Novomatic and potentially Flutter Entertainment’s Sisal, and therefore will now run its operations until 2034. The move could upset Flutter’s market leadership ambitions in Italy, having acquired Sisal back in 2021 and Snaitech earlier this year.
Marco Sala, IGT Executive Chair of the Board, commented: “The Italian Lotto concession is one of the world’s most important lottery contracts. IGT and its predecessor companies have successfully managed the license for 30+ years through constant innovation and the introduction of cutting-edge technology.
“The award is very gratifying, and we are honored and excited to continue working with the ADM for nine more years.”
The bid included an upfront license fee of €2.2bn which is payable in three installments before April 2026. IGT asserted that it expects the first two installments of €500m and €300m to be made this year.
“The €2,230m investments in upfront fees reflect the significant value of the new license and IGT is confident that the investment will enhance our revenue and profit potential,” noted Vince Sadusky, IGT CEO.
The operator also noted that the concession rate collected from total wagers will be 6%, along with an additional 8% gross fee collected through the digital channel as a distributor fee.
Expanding global operations
It was only in January this year that IGT won a 10-year contract with the national lottery of Luxembourg, Loterie Nationale.
IGT is also the primary technology provider to 26 of the 46 lotteries in the US, eight of the world’s largest 10 lotteries and 16 of the world’s top 25 lotteries.
Sadusky added on the new deal: “The exciting innovation pipeline with fresh launches planned for commencement of the new license 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.”
The development is a significant one for IGT, cementing the firm as one of the leading technology suppliers to various national lotteries from Europe to the US.
The announcement comes shortly after publication of its Q1 financials, which though showing an overall positive performance did also have to account for an incremental FX impact from the first two instalments of the Italy Lotto licence fee.
Securing an extension of the lottery rights was being treated as a strategic priority by IGT, and has similarly been highlighted as a key development by Allwyn.
Following the announcement, the company revealed that it plans to contribute a pro rata 32.5% share of the €2.2bn licence fee. Leadership added that Allwyn will invest to support the LottoItalia consortium over the next nine years until the licence concludes in November 2034.
As stated above, Allwyn has already built itself up as a leading lottery operator across various European countries. The addition of the Italian lottery, with annual ticket sales of over €8bn and around €15bn paid in state contributions during the last nine year licence, this is another huge feather in Allwyn’s cap.
“We’re thrilled to continue our strong partnership with IGT in Italy for another nine years,” said Robert Chvatal, Allwyn CEO.
“We’re pleased that Allwyn’s positive contribution to the consortium, including our proven track record of modernising and growing lotteries across Europe, will continue to support IGT’s exemplary stewardship of an important Italian national asset.