Flutter Entertainment is mulling purchasing Italy’s lottery operation license. The global gaming company which owns FanDuel, Paddy Power, and Betfair, among others, looks to partner with another operator or several companies to obtain the rights to run the country’s lottery, according to an Irish Times report.
Flutter CEO Peter Jackson told the Irish Times in November his company would have an interest in Italy’s oldest gaming license if it made economic sense. Flutter's deadline to place a bid is Mar. 17, and the report’s sources said the company has made no decision.
Italy doesn’t allow online gaming ads, but customers can scan the back of their tickets.
“Clearly the Italian lottery license would be a good strategic fit for Flutter's portfolio given the cross-selling opportunities it would present,” John Blake, an analyst with Cantor Fitzgerald Ireland, told the Irish Times. “Management, however, will likely remain financially disciplined in any bid process.”
Up for grabs
The Italian Agency for Customers and Monopolies granted International Game Technology (IGT), formerly Lottomatica Holdings, lottery operations for the last three decades.
That deal ended in November, and Italy’s gaming regulator is currently taking bids at a €1 billion minimum to obtain nine-year rights to run the nation’s lottery. According to the report, the contract is worth €4.3 billion, and IGT should be among the license’s bidders.
The concessionaire’s commission is expected to rise from 6% to 9% with the new contract, the report said.
Moving into Italy
Obtaining the lottery license wouldn't be Flutter’s first foray into that lucrative gaming market. Flutter acquired Italian gaming operator Snaitech from Playtech for $2.56 billion in September.
The deal should close fully in this year's second quarter. Snai will give Flutter a 30% market share in Europe’s largest regulated country.
“This transaction is compelling strategically and financially,” Jackson said after the acquisition. "It fits perfectly within our strategy for value creating M&A and creates a significant opportunity to accelerate Snai’s growth by providing them with access to Flutter’s market-leading products and capabilities both in the U.S. and globally.”
Flutter also got into the newly regulated Brazilian gaming market by purchasing Betnacional for $35 million last year, showing its desire to continue growing globally.
