Flutter is expected to be among the front-runners for Italy’s main lotto licence – said to be worth €1.5 billion – as Monday’s deadline for tenders nears.
The gaming giant has, however, faced criticism from NGOs amid suggestions it will – if successful – use the Italian franchise to cross-sell its other gambling products.
Italy’s Customs and Monopolies Agency, which also oversees that country’s gambling regulation, has set a minimum bid level at €1 billion for parties interested in country’s oldest and largest lottery licence, which expires later this year.
The Italian lottery market – in terms of playing population and turnover – is one of the world’s most lucrative.
Paddy Power-owner Flutter has yet to confirm its plan to bid for the licence, but it is expected to enter the race via its existing Italian lotto business, Sisal, and in partnership with tech company Scientific Games and private equity firm Brookfield.
“We’re not going to talk about our bidding strategy. It’s commercially sensitive,” Flutter’s chief financial officer Rob Coldrake said on a recent call with analysts. “We will be very disciplined and to the extent that we go ahead, we will put on as good a show as we can.”
The company is also in the process of buying Snaitech, another Italian lotto business, for an estimated €2.3 billion, to cement its position in the market further.
[ Is Flutter ready to finish off Italian job with bet on main lottery licence? ]
While advertising online gambling is banned in Italy, Flutter could, under the current rules, cross-sell its other products by allowing lottery customers to scan the back of their tickets. This is seen by Flutter as a big opportunity to bolster online revenues and a prerequisite for entering the race.
Cross-selling to Sisal “would be the primary rationale for additional lottery assets”, Morgan Stanley said in a recent research paper while noting that online customers were worth 10 times as much to Sisal compared to retail-only players.
But Italian NGOs, including the National Campaign against the Risks of Gambling, have raised concerns about Flutter’s putative plan, describing cross-selling as harmful and aggressive.
They claim that online players lose multiples of the amount lost offline or through standard retail. They are calling on the next licence operator to abstain from cross-selling to other gambling products.
Looser rules to allow for the opening up of the online channel was seen as one of the key enticements in the sale of the Irish lottery franchise, which was sold to Canadian business interests in 2014.
Premier Lotteries Ireland, the company that holds the exclusive licence to operate the State’s National Lottery, was sold in 2023 to French gaming company and lottery operator La Française des Jeux (FDJ) in a deal worth €350 million.
