Flutter Entertainment chief executive officer (CEO) Peter Jackson has signalled an interest in potentially pursuing a €1 billion-plus bid for Italy’s main lottery licence, as the current contract with fellow gambling giant International Game Technology (IGT) expires in 12 months’ time.
Speaking to The Irish Times on Wednesday, after Flutter reported its latest quarterly results, Mr Jackson highlighted how the group’s Italian business, Sisal, uses its existing local lottery licence to win lottery customers over to its online gaming and sports betting platforms.
While advertising online gambling is banned in Italy, Flutter can cross-sell these activities by allowing lottery customers to scan the back of their tickets.
Asked if Flutter plans to tender for the main Italian lottery licence, Mr Jackson said the group, which agreed in September to buy Italy’s third-largest online gambling company Snaitech for $2.6 billion (€2.45 billion), is interested in opportunities to “funnel” punters towards its Italian online offering.
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“We don’t have to [bid for the main lottery licence], but if it makes economic sense, we’ll do it,” he said.
Italy’s oldest lottery has been run by IGT, formerly Lottomatica Holdings, for the past three decades. The Italian government is reported to be preparing to imminently launch a bidding process for a new nine-year licence, with minimum tenders being set at €1 billion – to be paid in instalments.
Flutter, the parent of Paddy Power, Betfair and the fast-growing US brand FanDuel, reported late on Tuesday that its revenues grew by 27 per cent in the third quarter to $3.25 billion, to beat the consensus estimate of analysts by almost $150 million. Adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) soared 74 per cent to $450 million.
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The US market dominated growth, with revenues there jumping 51 per cent compared to a year ago, topping $1.25 billion. UK and Ireland – a much more mature betting market than the US – saw sales increase 18 per cent.
The company raised its revenue and adjusted (Ebitda) guidance by 1 per cent, reflecting what it called a strong performance outside the US. Shares in Flutter soared 6.8 per cent to a record high in London on Wednesday, leaving the company with a market value of £36.6 billion (€44 billion).
However, it reduced the midpoint of its US Ebitda guidance by 4 per cent as a result of October National Football League (NFL) results favouring punters over FanDuel.
Still, the US downgrade was much less severe than one delivered by FanDuel’s main rival, DraftKings, last week. Mr Jackson said FanDuel proved to have better pricing accuracy than peers during the period.
Flutter, which dropped its Irish stock market listing earlier this year as it also moved its main quotation from London to New York, said in September that it plans to spend $5 billion buying back shares over the next three to four years. It launched the first $350 million tranche on Wednesday.
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