Industry analysts have reached out to Gambling Insider regarding a potential investment Flutter Entertainment is looking to make within the Italian market, shortly after it confirmed it was in talks to buy Playtech's Italian B2C brand Snaitech.
Italian lottery licence
Through regulatory tracking by industry insiders, it has been noted that Flutter is considering giving its Italian subsidiary Sisal, which it completed the acquisition of in 2022, a CapEx of €1bn+ ($1.11bn+) in funding and investment to acquire Italy’s main lottery licence.
The tender for the lottery licence is expected to be launched around late October/early November, with IGT’s (formerly Lottomatica) licence for the Italian lottery expiring in November 2025 having held it for more than 30 years.
The Italian Government’s new strategy means there are no automatic renewals of the previous concession, so the licence is up for grabs (much like it was in the UK previously).
Different strategy
However, as noted by industry analysts, the investment from Flutter into the Italian lottery appears to move away from its main focuses; both in a geographical sense, with the US being viewed as the main market, and in a business sense with the operator concentrating efforts on the expansion of its sportsbooks and online betting, rather than lotteries.
Further to this, the information provided to Gambling Insider assesses the performance of Sisal as a business, which has been struggling in lottery compared with betting and gaming. For example, one of its lottery games, SuperEnalotto, has shrunk by 55% since 2008, while since 2019 its sales are down 40%.
However, as noted by the industry analysts, the investment from Flutter into the Italian lottery appears to move away from its main focuses
Seemingly, the deal appears to be one that moves away from Flutter’s overall objectives and in some ways looks a risk for the company.
In addition, Sisal already failed with its bid in the aforementioned UK race for a lience, losing out to Allwyn in the bid to take over the UK’s national lottery.
Cross-selling
However, industry analysts have pointed to one possible explanation for this potential investment.
In 2018, a law in Italy was passed which placed a ban on gambling and betting advertising in the country, though this did not apply to state-run national lottery, which was exempt from the ban.
With this in mind, analysts have suggested this may mean Flutter is looking to invest in an effort to cross-sell its products to lottery customers, such as gaming and sports, especially in an environment where marketing opportunities are limited.
Previously, during the operator's Q4 2023 earnings call, Flutter CEO Peter Jackson referenced the appeal of cross-selling, particularly in the Italian market.
It remains to be seen if this investment will materialise, but it would certainly not be consistent with Flutter’s increased attention in the US. On the other hand, it could be viewed as a clever strategy in an Italian market that continues to grow.
Gambling Insider reached out to Flutter for comment and the operator stated it had nothing to add regarding the matter.
