Lottomatica IPO: Everything you need to know about Lottomatica

What do we know about the Lottomatica IPO

Lottomatica debuted on the Milan stock exchange on Wednesday, 3 May. Shares for the Italian sportsbook company opened at €8.50, below the expected price of €9. By the afternoon, the price dropped to €8.20.

Despite opening below its targeted price range, the company considers the IPO successful. The group and its shareholder Apollo Global Management stated before listing that the aim of the IPO is to generate cash to pay off outstanding debt. Lottomatica raised just under €700 million by the time trading closed on Wednesday.

The Italian gambler is still majority owned by private equity company Apollo Global Management (APO.N), which acquired Lottomatica almost two years ago. Joint global coordinators for the listing included Barclays, Deutsche Bank, Goldman Sachs, JP Morgan and UniCredit. Bookrunners included Apollo Capital Solutions, Banca Akros, BNP Paribas and Mediobanca.

Turbulence in the banking sector following the collapse of Silicon Valley Bank has forced some companies to delay IPO plans, as well as the general financial downturn seen over the past two years. However, European equity markets have recovered most of the losses experienced in the stock market sell-off triggered by SVB.

The global IPO market has notably dried after a year of high interest rates and inflation brought about volatility. Before Lottomatica, only two companies have gone public in European markets: Italy’s EuroGroup Laminations market capitalisation has fallen 10% since its listing, and German web-hosting company Ionos has fallen 23%.

When is Lottomatica’s IPO?

Lottomatica debuted on the Milan stock exchange on Wednesday, 3 May 2023.

How much is Lottomatica worth?

Lottomatica is now worth €2.26 billion with its infusion of post-IPO cash. This is well below the initial expectation of €4.5 – €5 billion set by analysts in the beginning of 2023 and the more recent target of €2.7 billion set in April.

What is Lottomatica’s business model?

Lottomatica is an Italian gambling company that operates lotteries, sports betting and other gambling games. The company has the largest distributed gambling network in Italy with thousands of gaming halls and online sports betting entrances. It also owns physical gambling machines across the country.

Lottomatica breaks down its business into three arms: online betting, sports betting, and gaming. Online betting products incorporate a number of brands including the recently acquired Betflag on web and mobile apps. Sports betting covers three popular brands Better, GoldBet and Intralot which are all accessible in betting shops and corners. Gaming covers various independent machines installed in public places and competitor gaming halls throughout the country.

The gambling company made its first acquisition as a standalone business in December of 2022 of another online sports betting and casino operator, Betflag. Despite the late acquisition, the deal greatly helped boost operating profits for the year.

How does Lottomatica make money?

Lottomatica makes money through commissions, also known as vigorish or vig. Vig is the amount charged by a sports betting company, similar to the house edge at a casino. The vig is factored into a better’s listed odds and paid out as a surcharge for processing the bet.

Gambling machines and game apps operated by Lottomatica also produce revenue through a traditional house edge. Advertising and partnerships in all Lottomatica’s products also bring in money for the company.

Is Lottomatica profitable?

Yes, Lottomatica is profitable. The company reported a net profit of €73.0 million for the 2022 financial year and an EBITDA of €460.4 million. The period marked the first full year as a standalone company following its acquisition by Apollo from International Gaming Technology (IGT).

This was a significant increase from the previous year’s loss of €57.6 million. The change was bolstered by revenue growth in all three sectors: 93.3% growth in gaming, 17.5% in online betting, and 122.5% in sports betting.

Learn how to read a company’s earnings report.

In a trading update covering January and February of 2023, Lottomatica has stated it expects an EBITDA for the year of about €560 million. In the same two-month report, Lottomatica claimed revenue was up in all three sectors with 12% in gaming, 39% in online betting, and 19% in sports betting.

Lottomatica has announced it will pay dividends from 30% of its adjusted profits.

Who owns Lottomatica?

Lottomatica is owned by Apollo Global Management (APO.N), a US-based private equity firm which acquired Lottomatica from IGT in May 2021 for €950 million.

Who are Lottomatica’s competitors?

Some of Lottomatica’s competitors include British gambling companies operating in the Italian market such as Flutter (FLTRF.L), Entain (ENT.L), Playtech (PTEC.L) and 888 Holding (888.L). Currently these companies all have more global exposure than Lottomatica, but Lottomatica has the largest market share of domestic revenue at 19.6%, according to Statista in March 2023. Sisal, which was bought by Flutter in 2021, is second with 9.44%; Snai, an Italian owned and operated company, is third with 8.05%.

Lottomatica board of directors

Lottomatica’s current board of directors are listed below:

Andrea Moneta – Chairman
Guglielmo Angelozzi – CEO
John Paul Maurice Bowtell – Director
Catherine Guillouard – Director
Michele Rabà – Director
Michael Ian Saffer – Director
David Benjamin Sambur – Director
Yulia Shakhova – Director
Natalia Tsitoura – Director

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