SBC News Voice of the Sports Betting Industry
Playtech Plc has confirmed that it is in discussions with Flutter Entertainment Plc regarding the ‘potential sale’ of its Snaitech Italia business.
The FTSE250 technology group issued a short statement in response to media speculation on the potential sale of its Italian business to the NYSE-listed gambling group Flutter.
The statement confirmed that discussions are ongoing “regarding the potential sale of the Snaitech business for a value that could be about £2 billion.”
The board of Playtech has granted Flutter a period of exclusivity to complete due diligence and necessary terms to put forward a deal to investors.
As it stands, the board of Playtech has not sanctioned any approach by Flutter, and “there can be no certainty that any transaction regarding the potential sale of the Snaitech business will ultimately be agreed upon, or as to its terms. Further announcements will be made as and when appropriate.”
Snaitech serves as Playtech’s flagship B2C business, which in 2023 generated revenues of €950m (equivalent to 56% of corporate revenues) and an EBITDA contribution of €256m for the FTSE technology group.
Strategically, Flutter is eyeing opportunities in the Italian market to expand its International unit (non-US and UK), which in 2022 acquired Italian lotto and retail betting giant SISAL for €1.9bn.
The acquisition of Snaitech would be transformative for Italian gambling, merging the market’s second and third largest gambling groups under Flutter International’s domain.
Published yesterday, Flutter’s Q2 accounts registered International Unit revenues of $807m (+11%), combined with EBITDA results of $156m.
As noted by CEO Peter Jackson, leadership sees opportunities where the company can leverage its Flutter Edge technologies to outperform local competitors, as a key discipline of the International unit’s “consolidate and invest” strategy across new and existing markets.
Italy is recognised as Europe’s second-largest gambling market, with the ADM (Customs and Monopolies Agency) reporting a total gross gaming revenue (GGR) of €20bn in 2022.
Regulatory developments see the government of Italy undertaking a decree to “reorganise Italian gambling,” in which it will apply a new licensing framework, safer gambling protections, and increased compliance and franchise costs.
Changes are likely to favour gambling PLCs, as online gambling licences have been increased to €7m spanning a nine-year period.
Flutter has previously underscored the importance of Italian growth, as a market in which the Plc views a high transfer of customers from retail to online channels.
Meanwhile, Playtech initiated its Italian market activities in 2018, acquiring a 70% stake in Snaitech for €300m .
The deal is recognised as Playtech’s best M&A, as Snaitech has reported year-on-year revenue and EBITDA growth since Playtech’s original investment. In 2021, Playtech CEO Mor Weizer refuted speculation of a sale of Snaitech as Playtech became an M&A target of US and Hong Kong PE funds.
Last year, both Flutter and Playtech competed to acquire the Italian bookmaker SKS365. The betting group was acquired by Milan Borsa-listed Lottomatica, striking a deal to become Italian gambling’s outright leader.
