Flutter Reportedly Interested In Running Italy’s Lottery Business

Article by : Erik Gibbs Jan 21, 2025

• 
• 

Flutter Entertainment, the parent company of Paddy Power and Betfair, is reportedly evaluating a bid to acquire Italy’s main lottery license. This development follows the Italian Agency for Customs and Monopolies officially initiating the bidding process for the coveted nine-year contract.

The license, currently held by International Game Technology (IGT), has been operated by the same entity for over three decades. The contract, which expires in November, is estimated to have a gross value of €4.3 billion (US$4.45 billion), with a minimum bid set at €1 billion (US$1.04 billion).

According to The Irish Times, sources indicate that Flutter is exploring options for its bid, including the possibility of collaborating with a partner or joining a consortium. Analysts suggest that a partnership could make financial sense, as it might help distribute the substantial upfront costs while providing strategic benefits.

Flutter’s Italian subsidiary, Sisal, already holds a local lottery license and uses it to attract customers to its online gaming and sports betting platforms. This cross-selling potential is considered a key motivator for Flutter’s interest in the larger license.

The appeal of the Italian lottery license goes beyond direct ticket sales. While Italy has strict regulations prohibiting online gambling advertisements, Flutter leverages Sisal’s capabilities to integrate its lottery customers into its broader gaming ecosystem. By allowing players to scan their lottery tickets for additional gaming opportunities, Flutter can navigate regulatory constraints while expanding its customer base.

Analysts believe this strategy aligns with Flutter’s broader goals. A successful bid could enhance the company’s footprint in Italy, a market where only 21% of gambling activity occurred online in 2023. This figure lags behind more established markets like the UK and Australia, where over 60% of gambling takes place online.

With Flutter already holding a significant stake in the Italian market through its €1.9 billion (US$2 billion) acquisition of Sisal in 2022 and its pending $2.6 billion (US$2.7 billion) purchase of Snaitech, the lottery license would further consolidate its position.

The potential competition for the license is expected to be intense, with IGT anticipated to be a strong contender. Reports suggest the new contract will offer increased incentives, including a 9% commission on turnover, compared to the 6% under the current terms. Last year, ticket sales for the primary lottery reached €8 billion (US$8.3 billion), highlighting the financial attractiveness of the opportunity.

Flutter’s recent moves reflect its commitment to expanding its global presence. While its US operations, particularly through FanDuel, have been a major focus, acquisitions like Sisal and Snaitech demonstrate the company’s interest in markets with significant growth potential.

Flutter CEO Peter Jackson has hinted that a bid for the Italian lottery license would depend on its economic viability, signaling a cautious but strategic approach to the opportunity. Whether through a solo bid or a partnership, the license represents a potentially transformative venture for Flutter in the Italian gambling market.