Financial Terms Breakdown
The IGT-led consortium’s winning bid includes a €2.23 billion upfront license fee, structured as €500 million and €300 million payments in 2025, with the remaining €1.43 billion due by April 2026. This triples the previous 2016 agreement’s €770 million fee and exceeds analysis projections of €1.3 to €1.5 billion.
“The €2,230 million investments in upfront fees reflect the significant value of the new license, and IGT is so confident that the investment will enhance our revenue and profit potential,” said CEO Vance Sadusky.
Vance also noted planned innovations to boost wagering growth and digital expansion. IGT will receive a 6% concession rate on total wagers, supplemented by an 8% gross fee from digital channels. The phased payment approach for the license fee mitigates cash flow pressures while securing operational control through 2034.
Digital Growth Strategy
IGT will use its renewed Lotto license to accelerate digital expansion. It targets iLottery sales growth as a gateway into Italy’s B2C online casino, sports betting, and digital gaming markets. Allwyn contributes 32.5% of license fees and capital expenditures under the partnership, while IGT retains operational control.
“We’re pleased that Allwyn’s positive contribution to the consortium, including our proven track record of modernizing and growing lotteries across Europe, will continue to support IGT’s exemplary stewardship of an important Italian national asset,” said Allwyn CEO Robert Chvatal.
The collaboration mitigates financial risk through shared investments while securing IGT’s market leadership. Management anticipates the contract’s long-term revenue stability will strengthen global competitiveness, with digital ventures posed to unlock new income streams.
Analysts Showcase Confidence
Industry analysts view the license renewal as critical for IGT, with Truist Securities’ Barry Jonas stating it alleviates investor fears over losing a contract representing over 35% of EBITDA. “Recall, IGT’s nine-year concession ends later this year, and it was competing [with Flutter] for a new nine-year concession,” he noted. While upfront costs surpassed estimates, Jonas underscored digital revenue streams’ potential to enhance long-term profitability.
