Posted: January 13, 2025, 07:27 pm.
Last updated: January 13, 2025, 07:27 pm.
Shares of International Game Technology (NYSE: IGT) have lost a third of their value over the past year, but the declining stock could benefit from some clarity from one of the company's key customers – the Italian lottery.

Last Friday, Italy's gaming regulator published request for proposal (RFP) documents, which Stifel analyst Jeffrey Stantiel described as “moderately favorable to IGT.” He rates the stock a “buy” with a 12-month price target of $26, which implies an upside of more than 50% from today's close. IGT's contract with Italian Lotto is run through a joint venture with Allwin and data confirms that it is a significant contributor to IGT's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).
Disclosures from JV consortium partner Allwyn indicate that the contract contributed €477M/€386M consolidated revenues/adjusted. IGT to EBITDA in 2023, ~30%/20% of global lottery revenue/Adj. ~30% of EBITDA and estimated IGT Proportional RemainCo Adj. EBITDA (IGT holds 61.5% economics in the operating JV),” Stantiel believes.
“Remenko” refers to the parts of IGT that will remain after the company merges its global gaming and playdigital with Avery and the combined entity is acquired by Apollo Global Management.
IGT faces competition for Italy lottery contract
IGT has had the rights to operate Italy's lotteries for more than three decades and this could mean the company is in the lead in winning another bid, with Flutter Entertainment (NYSE: FLUT) also expected to pursue the contract. .
Dublin-based Flutter already has a footprint in Italy through Playtech's (LSE: PTEC) pending deal for Snaitech. In 2022, Flutter paid $2.2 billion for Italian lottery giant Sisal. Prior to that acquisition, Flutter's PokerStars and Betfair were in operation in Italy with significant market share.
Stantiel says, “Although the lottery is outside of FLUT's strategic focus, the cross-sell rates to Superenalotto lottery players for OSB/iCasino have been attractive, and we believe FLUT management will be able to retain the lotto contract primarily Considers an addition to the existing Superenalotto contract.”
Italy is an attractive market for gaming companies as it is the largest betting market in Europe outside the UK and is the third largest economy in the Eurozone, behind only Germany and France.
IGT may have some benefits
It is possible that other bidders could emerge for the Italy contract and Flutter certainly represents credible competition, but IGT may have few advantages in terms of maintaining the agreement.
“While the scoring matrix gives more importance to the price than the European (50%/50%) or US (30%/70%) average, this compares to 70%/30% in previous Lotto RFPs (what we think Is performed. The buyside was given a slightly higher technical weighting, giving IGT the advantage of power, deep lottery operator experience and technical ownership,” Stantiel concluded.
The deadline for submissions is March 17, which analysts believe could favor IGT as the incumbent may not be close enough to rivals to prepare a substantial, competitive offer.
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