IGT and Sisal confirmed as the two bidders for nine-year Italian lottery contract

IMAGO

International Game Technology (IGT) and Sisal have been confirmed as the two bidders battling it out to secure the highly sought-after nine-year contract for the Italian lottery concession.

The deadline to submit bids expired on 17 March. IGT - who began their tender back in 1993 - is currently bidding alongside Novomatic, the Italian Tobacco Federation (FIT) and Allwyn. 

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Since taking over, the Italian lottery operations have grown significantly over the years. Collections have risen from €2.5bn (£2.1bn) to £6.4bn by 2022, according to the Monopoly Agency’s Blue Book.

IGT’s deal is set to expire by November 2025 and is estimated to be worth around £3.44bn. However it looked as though Flutter Entertainment were reportedly set to make a bid to secure the contract from the end of this year.

“There is an opportunity to bid for the lotto,” said CEO of Flutter, Peter Jackson. “We are putting our thoughts together on that. We’ve got a couple of weeks to decide what we’re going to do.”

There were speculations that Flutter might enter a joint bid for the Italian lottery licence, alongside Scientific Games, earlier this month but following the deadline for the contract expiring a few days ago, the only current competitors are IGT and Sisal.

The winning bid will be determined by the Italian Government, who will assess the two bids based not only on just the financial aspect, but across several other metrics.

They will assess the economic offer (60%) and investment and technical proposals (40%) before finalising their decision, with points being awarded based on network reach, investment commitments and service quality.

The decision won’t be made based on the highest bid. If IGT and Sisal both present similar financial offers, the operational track record and technical proposal will both be decisive in deciding the overall outcome.

While IGT will be hoping to continue their operation of the Italian lottery, Sisal have managed SuperEnalotto for 27 years, although it hasn’t operated the Lotto during its history.

The company has secured licences in both Morocco and Turkey, expanding its lottery operations on an international scale.

The nine-year tender for the Italian Lotto is expected to be worth £3.6bn in revenue over the duration of the entire contract. The bids could begin at £840m, although expert analysts believe that the final cost could reach a figure of £1.3bn.

It wont take long for the outcome of the tender to be decided, as a decision is expected to be made within a month. The regulators will assess not only the financial aspect of the respective bids by IGT and Sisal, but also assess other aspects which could play a decisive role.

Having managed the Italian lottery for the previous 32 years, will IGT extend into a fourth decade? Or will Sisal end their association and secure the coveted nine-year tender instead?

Both will find out sooner rather than later.