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Lottomatica project increased growth for 2023 after strong Q2

Italian lottery and gaming operator Lottomatica has increased its projected numbers for the rest of 2023 after recording promising numbers in the second quarter of this year. The first legal operator of Italy has the largest market share in the country’s regulated gambling market. A robust start to 2023 in Q1 for the operator was replicated in Q2 as they announced immense year-on-year (YoY) growth. Though the revenue has recorded a slight quarter-on-quarter (QoQ) decrease, the operator has posted cumulative revenue growth of €820 million for the first half of 2023. Due to the positive growth in the first half of 2023, Lottomatica has tweaked its expectations. The Italian operator now expects the annual revenue to reach almost €1.7 billion this year. The initial projection before the H1 2023 report was between €1.5 and €1.6 billion.

A flag on a cathedral.

Italian operator Lottomatica increases projected earnings for 2023 after strong Q2 results. ©Nicola Fittipaldi/Unsplash

Since 1993, Lottomatica has been active in the competitive gambling market of Italy. When the operator went live, it was the first licensed operator of the nation after being authorized by the Customs and Monopoly Agency and one of the major players in Europe. The operator is owned by Apollo Global Management, which in turn is owned in the majority by Gruppo De Agostini, which was founded in 1901 and is family-owned. Lottomatica is the sole concessionaire for the Italian Lotto game and also operates instant and traditional lottery games online and offline. Despite having a stronghold on lotteries, the Italian operator has not limited its operations to only one segment. The company also offers sports betting, gaming machines, and online casinos. Lottomatica is the leader in market share in the Italian gambling market. It accounts for nearly 20% of the country’s total gross gaming revenue (GGR). The Italian operator has established itself as one of the major players in the European gambling industry. Its presence and operations extend beyond Italy, contributing to its reputation as a significant player in the European market.

Over the years, Lottomatica has expanded its operations and diversified its offerings. It has focused on improving all its gambling segments to provide its customers with the best products. This diversification and upgradation have contributed to Lottomatica’s growth and market presence. In a world where many prefer online gambling over traditional gambling at brick-and-mortar casinos, it is extremely crucial to enter the digital market with an online casino that the players like. Lottomatica’s online casino segment flourished and eventually became the leading online casino in Italy earlier this year. This progress was primarily based on two key aspects – the first was Lottomatica’s credibility and reputation in the Italian market, and the other was the product that the operator delivered to the masses. Shortly after its online casino segment bloomed, Lottomatica announced plans to go public and float on the Milan Stock Exchange. The move signified the company’s steady growth and its intention to expand the existing operations further.

Recently, the Italian operator published the revenue report for the second quarter of the year. Despite recording a slight QoQ decrease, the revenue registered a significant YoY spike. The overall increased revenue of H1 2023 highlighted huge growth for the company. Owing to the robust growth, the Italian operator has increased its projected earnings for the year 2023 to €1.63 billion and €1.69 billion from an initial projection of €1.57 billion to €1.67 billion. Its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) are now projected to reach between €570 million and €590 million, as compared to an initial projection of €550 million to €570 million. iGaming, sports betting, and online casinos were the main highest-grossing segments that drove the revenue up in the first half of this year, with EBITDA up 28.3% YoY, iGaming revenue at €180.5 million, online casino revenue at €122.7 million, and sports betting revenue at €94.4 million. Despite the spurt, Lottomatica’s net loss in Q2 2023 was €17.2 million, compared to a net loss of €10.2 million in the corresponding quarter last year. The operator recorded a total revenue of €397.8 million, which is a 20.7% increase from last year. However, the revenue fell short of the operator’s record of €422. 2 million revenue which was recorded in the previous quarter of this year.

Lottomatica generated a record-high revenue in Q1 2023

The Italian operator made its all-time high revenue in the first quarter of this year with a total revenue of €422.2 million, which marked a YoY increase of 19.4%. The company’s net profit in the first three months of the year was €46.4 million, compared to €34.6 million a year earlier, while revenues rose to €424.8 million from €355.7 million. The company’s Q1 2023 results were driven by a consolidated betting volume of €7.3 billion, up 33% on 2022 comparatives of €5.5 billion. Lottomatica’s segments hit a new record during the same quarter, with online casino revenue hitting €124.0 million, an increase of 39.3% YoY. The company’s online sports betting offering accounted for €110.0 million of the total revenue, generating an 18.1% market share. The company’s gaming franchise revenue was €188.0 million for the period.

Lottomatica reiterated its forecasts for 2023 of revenues of between €1.57-1.7 billion, with adjusted earnings before interests, taxes, depreciation, and amortization (EBITDA) seen in a range of €550-570 million. The company also started selling €1.115 billion in bonds due 2028. The record figures for Q1 were responsible for strong growth in H1 2023 for the company. Lottomatica’s H1 2023 revenue increased by 15% compared to the same period in 2022, reaching €820.1 million. The company’s Q1 2023 results were lauded as a strong start to the year, laying the foundations for a solid performance in 2023. Based on its results to date, the group revised its expectations for the fiscal year 2023 upward, with revenues expected to be in the range of €1.63 to €1.69 billion from €1.57 to €1.67 billion.

Lottiomatica’s study finds Italians in favor of online gaming

Lottomatica recently published its second Lottomatica-Censis Report, entitled “Legal Gaming in Italy. The social and economic value of gaming”. The report studies the significance and functioning of the gaming industry in Italy. The study found that 23 million Italians, i.e., 47% of the total population, have indulged in gaming activities in the past 12 months. 56.4% of those who engaged in legal gaming over the past year did so remotely. It also concluded that 69.4% of Italians believe gambling is a human instinct. The study posted positive numbers for the Italian gaming market, with 77.4% of the population (and 82.7% of young people) believing that legal gaming is a form of entertainment.

88.6% of citizens are in favour of the regulation of the legal gaming sector being decided by the State. They believe that restricting the scope of legal gaming will broaden that of illegal gaming. The people of Italy also want uniform laws across the country. In 2022, the country reported increased revenues from taxation on regulated gaming, which amounted to €11.2 billion.

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Author: James Richardson