Prospects Brighten for IGT Amid Italian Lottery Contract Developments

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International Game Technology’s (NYSE: IGT) shares have declined by 33% year-to-date; however, recent developments regarding Italy’s lottery could provide much-needed momentum for their stock. Italy’s gaming authority unveiled their Request For Proposal documents last Friday which may portend good things for IGT according to industry analysts.

Stifel analyst Jeffrey Stantial considers IGT’s chances in response to RFP documents slightly favorable, and has recommended it with an upward target price target of $26 in 12 months – suggesting an over 50% jump versus its current value. His analysis highlighted their cooperation in running Italy Lotto as being significant contributors towards IGT’s adjusted EBITDA; according to him it accounted for some 30% of Global Lottery revenues as well as 30% adjusted EBITDA adjusted results.

Challenges and Competition for IGT in Securing Italian Lottery Contract

Since 1987, International Game Technology (IGT) has overseen Italy’s lottery operation – making them one of the frontrunners to secure another term as it faces stiff competition from Flutter Entertainment (NYSE: FLUT), who have extensive operations there and recently expanded their footprint with strategic acquisitions.

Flutter Entertainment does not prioritize lottery operations as part of its business plan; however, Flutter’s contract in Italy provides cross-sell opportunities with online sports betting/casino platforms, making the contract highly attractive. Italy stands as Europe’s second-largest gambling market outside the UK as well as an economic power within Eurozone; both factors emphasize how important an Italian lottery contract could be both for IGT as an incumbent provider as well as any competitors they might encounter down the road.

Potential Advantages for IGT

Flutter could also compete for Italy’s lottery contract; however, IGT may gain the upper hand due to their longstanding operational experience and technical know-how in this sector. According to Stantial’s RFP scoring matrix, aspects where IGT excels may give them an edge in maintaining it as their bid for retention of this contract gains strength.

IGT may benefit from an application deadline of March 17 that leaves little time for its competitors to prepare proposals, with IGT already having established itself and built relationships within Italy through their lotto partnership.

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