IGT stock slides despite Italian lotto nod as investor concerns mount
International Game Technology PLC (NYSE: IGT) saw its stock price tumble 5.67 percent to an intraday low of $15.95 on the New York Stock Exchange on Monday, 19 May 2025. This downturn occurred despite an Italian Judging Commission saying it will propose that the LottoItalia consortium, led by IGT, be awarded the nine-year concession to operate the Italian Lotto.
Even as Lottoltalia managed to re-obtain one of Europe’s most valuable gaming contracts, investors are seemingly concerned regarding the substantial financial commitment required and IGT’s recent financial headwinds. While some analysts noted a premarket share surge of 9.2 percent for IGT following the Lotto announcement, this initial optimism seemingly faded as the trading day progressed.
Also read: IGT revenue down 4% in Q4
The prize and the price: A €2.23 billion bet
The Italian Lotto is a cornerstone of Italy’s gaming market and a significant revenue generator. The Judging Commission’s proposal to award the license to the IGT-led LottoItalia consortium—which also includes Allwyn Entertainment, Arianna 2001, and Novomatic Italia—would see IGT continue its decades-long operation of the lottery until November 2034. IGT is set to maintain operational control of the business.
However, this long-term prospect comes with a hefty upfront cost: the consortium’s bid includes a €2.23 billion license fee. This fee is payable in three instalments: €500 million and €300 million are expected in 2025 after the award, with the remaining €1.43 billion due by April 2026. This substantial financial commitment requires a heavy cash outflow in a relatively short period, and is being considered a point of concern for investors. The concession rate from total wagers is set at six percent, with an additional eight percent gross fee from the digital channel as a distributor fee.
Also read: IGT becomes latest gaming supplier to secure UAE licence
Recent financial performance
The market’s cool reception to the Lotto news may be heavily influenced by IGT’s recent financial performance and outlook. The company reported a challenging first quarter of 2025, with group revenue declining by 10-12 percent year-over-year to $583 million. This was attributed to factors including lower U.S. multi-state jackpot activity, the timing of product sales, and unfavourable foreign exchange impacts.
Income from continuing operations plummeted 93 percent to $8 million in Q1 2025, compared to $116 million in the prior year. The bottom-line net profit also fell to $27 million in Q1 FY25 from $82 million in Q1 FY24. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) slipped 24 percent to $250 million.
Compounding these results, IGT revised its full-year 2025 guidance to the lower end of its previous range, now expecting revenue of approximately $2.55 billion and Adjusted EBITDA of around $1.10 billion. The company also projected a negative cash flow from operations of approximately $350 million, largely due to the foreign exchange impact on the initial instalments for the Italian Lotto license fee. CFO Max Chiara cited the “current worsening macroeconomic environment” as a factor in the revised outlook.
The acquisition of the Italy Lotto License is also viewed as a strategic move securing a significant revenue stream for nine years, though the substantial upfront fee and macroeconomic risks warrant careful monitoring. Analysts at Jefferies noted that IGT’s stock trades at just 5.2x EBITDA, below its historical range of 7–9x, suggesting a potential for re-rating if the renewal delivers. However, other analysts point to the Q1 revenue and profit decline as a key concern. GuruFocus’ proprietary metrics estimated a GF Value for IGT at $17.47 in one year, suggesting a modest upside from the current price (as of the report date). Before the Lotto news, as of 5 May 2025, 26 analysts had a consensus “Buy” rating on IGT, with a price target of $22.66. Following the Lotto announcement, some analysts maintained an “Outperform” status, with an average one-year price target around $21.00, though projections varied. The substantial upfront license fee is consistently highlighted as a negative aspect requiring significant financial commitment.
Leadership optimism clashes with market reality
Despite the market’s reaction, IGT’s leadership expressed strong confidence regarding the Lotto license. Marco Sala, IGT Executive Chair, called the Italian Lotto concession “one of the world’s most important lottery contracts” and highlighted IGT’s 30+ years of successful management through innovation. CEO Vince Sadusky stated the €2.23 billion investment “reflects the significant value of the new license,” expressing confidence that it “will enhance their revenue and profit potential” and fuel growth in iLottery and other digital gaming sectors in Italy.4
The Flutter factor: Fierce competitor’s stock performance
The tender for the Italian Lotto saw a strong challenge from global gaming giant Flutter Entertainment, which bid for the license through its Italian arm, Sisal. Flutter has been aggressively expanding in Italy, with acquisitions like Sisal and Snaitech aimed at commanding a significant share of the online betting market. The Lotto license was seen as a logical extension of this strategy, offering valuable cross-promotional opportunities given Italy’s strict gambling advertising laws.
On Monday, Flutter Entertainment’s US-listed shares (FLUT) ended 0.14 percent higher at $249.35 apiece on the NYSE. Its London-listed shares (LSE: FLTR) closed 0.75 percent lower at 18,420.00 GBX.
“We believe the merits of this deal are compelling, in a market where we have demonstrated our extensive lottery experience through the success of our SuperEnalotto proposition and the key role lottery plays supporting our Italian leadership position. We anticipate the tender outcome will be announced within the next 3 months, and if successful, would further add to our scale position in SEA.
Flutter had previously confirmed its bid in a , expressing confidence in the merits of the deal and anticipating an outcome within the next three months (from May 7, 2025).
“We believe the merits of this deal are compelling, in a market where we have demonstrated our extensive lottery experience through the success of our SuperEnalotto proposition and the key role lottery plays supporting our Italian leadership position. We anticipate the tender outcome will be announced within the next 3 months, and if successful, would further add to our scale position in SEA,” Flutter had said.
Also read: Flutter posts solid Q1 2025 results, raises full-year outlook – Sigma바카라
What lies ahead
The final decision on the Italian Lotto license now rests with Italy’s customs and monopolies agency, the Agenzia delle Dogane e dei Monopoli (ADM). The ADM is expected to make its final award declaration within approximately 35 days from the May 19th proposal.
For IGT, securing the license is a tactical victory, but the immediate aftermath poses challenges. The company must arrange the substantial investment, manage its debt (having secured a €1 billion term loan, part of which was earmarked for the Lotto license), and deliver on its promises of growth and innovation to regain investor confidence, particularly against the backdrop of a challenging macroeconomic environment and its recent financial results.
