IGT Stock Poised for Boost as Italian Lottery RFP Details Emerge
International Game Technology's (IGT) prospects could improve with upcoming clarity on the Italian lottery request for proposal (RFP). The company's stock has declined by 33% over the past year, but analysts see potential upside related to this key contract.
IGT headquarters with blue glass exterior
Italy's gaming regulator recently published RFP documents that Stifel analyst Jeffrey Stantial views as "modestly favorable" for IGT. He maintains a "buy" rating with a $26 price target, suggesting over 50% potential upside.
The Italian lottery contract, operated through a joint venture with Allwyn, significantly contributes to IGT's financial performance:
- Generates €477M in consolidated revenues
- Produces €386M in adjusted EBITDA
- Represents ~30% of Global Lottery revenues
- Accounts for ~20% of adjusted EBITDA
- Comprises ~30% of IGT's pro-rata RemainCo adjusted EBITDA
While IGT has operated Italy's lottery for over 30 years, Flutter Entertainment emerges as a strong competitor for the contract. Flutter's existing Italian presence includes:
- Pending acquisition of Playtech's Snaitech
- $2.2 billion acquisition of Sisal in 2022
- Established PokerStars and Betfair operations
IGT maintains several competitive advantages:
- Incumbent operator status
- Extensive lottery operation experience
- Technological ownership
- Favorable technical weighting in scoring matrix
- Short submission deadline (March 17) potentially benefiting the incumbent
The Italian market represents Europe's largest gaming market outside the UK and the Eurozone's third-largest economy, making this contract particularly valuable for operators.
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