The Race for iGaming Market Leadership in Italy Intensifies

Lottomatica remains the leader of the online Italian market, but investment bank Jefferies warns that it could face growing challenges from Flutter with its brands Sisal and SNAI. In the first quarter, Lottomatica achieved 30% of the Italian online GGR, with Flutter not far behind at 27%.

Strategic Moves by Flutter

Since acquiring Sisal in August 2022, Flutter has increased its share of online GGR from 10% to 13%. SNAI, in contrast, has lost about four percentage points in recent years. If Flutter recovers that loss, it could surpass Lottomatica. According to Jefferies, "Flutter has a proven track record of claiming the largest market share in almost all target territories."

Italy is crucial, with a market that Jefferies estimates will reach €22.6 billion in GGR by 2025, making it the largest in Europe. Online penetration is at 28%, compared to 61% in the UK, and expected to grow at a 9% CAGR between 2025 and 2030.

Competitive Advantage of Flutter

In Flutter's recent Q2 call, CEO Peter Jackson highlighted outstanding growth in sports betting and Italian iGaming, outpacing the market despite internal disruptions. In April, they completed the migration of SNAI to their platform, causing a "brief loss of share," but with a robust recovery in June.

Jefferies noted that Sisal has demonstrated superior growth in iGaming against Lottomatica in seven of the last eight quarters. The acquisition of SNAI increased Flutter's online GGR share from 20% to 27%, and its retail sports betting share from 12% to 32%.

Lottomatica's Response

Lottomatica is not standing still. Its CEO Guglielmo Angelozzi reported a 12% growth in the Italian online market in Q2, accelerating to 19% in June. "From a marginal operator to being the largest in the market," he stated. Its online revenues grew by 24% in Q2, with adjusted online EBITDA margins at 58% in the first half.

The successful migration of Planetwin365 is a case in point, increasing its share in sports and iGaming after migration. Lottomatica emphasizes a "profitable" growth strategy, avoiding expansion at any cost. "It's not just about acquiring share, but acquiring quality share at a sustainable cost," Angelozzi emphasized.

The battle is thus shaped: Lottomatica defends its leadership by maintaining high profitability, while Flutter applies its global capabilities in two key market strengths in Italy. Although the early results from Flutter are positive, it will be crucial to see if it can reverse the long-term decline in the SNAI market.

What’s Next for the Italian Market?

Jefferies' report suggests that Flutter doesn't need a new success in Italy, just to replicate with SNAI what it achieved with Sisal. With advertising restrictions favoring established businesses and the new concession reducing online licenses from 81 to 52, the stage is set for the consolidation of the largest operators.