International Game Technology (NYSE: IGT) could see improved stock performance following clarity from the Italian lottery RFP process. The company's shares have declined by 33% over the past year, but recent developments suggest potential upside.

Italy's gaming regulator recently published RFP documents that Stifel analyst Jeffrey Stantial describes as "modestly favorable" for IGT. With a "buy" rating and $26 price target, Stantial projects over 50% potential upside.

Key Financial Impact:

• IGT's Italian lottery joint venture with Allwyn generated €477M in consolidated revenues
• Contributed €386M in adjusted EBITDA in 2023
• Represents ~30% of Global Lottery revenues
• Accounts for ~20% of adjusted EBITDA
• IGT holds 61.5% economics in the operating JV

Competitive Landscape:

• IGT has operated Italy's lottery for over 30 years
• Flutter Entertainment emerges as main competitor
• Flutter already operates in Italy through:
  • Pending Playtech's Snaitech acquisition
  • $2.2 billion Sisal acquisition (2022)
  • Existing PokerStars and Betfair operations

IGT's Competitive Advantages:

• Incumbent operator status
• Extensive lottery operator experience
• Technical ownership
• March 17 submission deadline may favor IGT
• New scoring matrix: Technical aspects given more weight than previous RFP

Italy represents an attractive market as Europe's largest wagering market outside the UK and the Eurozone's third-largest economy. The upcoming contract decision could significantly impact IGT's market position and future growth prospects.

Related Articles

Previous Articles