Brightstar Lottery (BRSL) Status Update summary

Italian Lotto license renewal and strategic update

• Awarded a new nine-year Italian Lotto license, extending operations through November 2034 with a €2.23 billion upfront fee, payable in three installments.

• Plans to drive revenue and cash flow growth by investing in iLottery, launching a B2C digital iCasino and sports betting platform, and enhancing the retail network.

• Received the maximum technical score in the tender, reflecting technology leadership and a strong innovation pipeline for new and add-on games.

• My Lotteries app, now Italy's top gaming app, is central to digital expansion, aiming to increase iLottery penetration to European benchmarks and boost profit margins.

• Digital expansion leverages a 20 million player base and 35,000 POS outlets, with cross-selling opportunities between lottery, iCasino, and sports betting.

Financial terms and capital allocation

• Lotto concession rate remains at 6%, while new B2C digital licenses earn an 8% gross fee on wagers, before bonuses.

• €150 million in CapEx for Lotto infrastructure upgrades and €30 million for digital distribution, mostly in 2025-2026, included in prior CapEx guidance.

• Consortium partners, including Allwyn, will contribute pro-rata to fees and CapEx; IGT consolidates 100% of the business.

• IRR for the new license is projected in line with historical lottery returns, supported by incremental profit growth and digital expansion.

• Share repurchase authorization increased to 15% of outstanding capital in anticipation of Voyager closing and capital return plans.

Digital and retail growth strategy

• Coordinated digital and land-based launches, enhanced terminal capabilities, and new player touchpoints are expected to drive sales and engagement.

• iLottery wagers in Italy have grown at a 26% CAGR over five years, but penetration remains below other markets, presenting significant upside.

• Digital business expected to deliver higher margins due to incremental distribution fees and cross-sell opportunities.

• Technology investments, automation, and AI are targeted to deliver €10–20 million in annual cost savings.

• No exclusivity for iLottery distribution; other operators can link to the platform, but retail distribution remains exclusive.