Flutter acquires Italian online gambling operator Sisal for €1.9bn

Paddy Power owner Flutter Entertainment has acquired Italian online gaming operator Sisal for €1.9 billion, giving the company a bigger foothold in the Italian market.

The price is payable in cash on completion of the transaction, and includes full repayment of all Sisal's debt. Flutter will finance the deal through additional debt facilities agreed with Barclays Bank.

It is expected to complete in the second quarter of 2022, and is subject to merger control clearance and other approvals.

Milan-headquartered Sisal is a leading betting, gaming and lottery operator, employing about 2,500 people. Revenue for 2021 is expected to reach €694 million, with consolidated earnings before interest, tax, depreciation and amortisation of €248 million, with 90 per cent of that coming from its Italian operations. The remaining 10 per cent comes from regulated lottery operations in Turkey and Morocco.

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Italy is the second largest regulated gambling market in Europe after the UK, with a total estimated gross gaming revenue in 2019 of €19 billion. The Covid-19 pandemic has led to an increase in online operators' share of total Italian gross gaming revenue over the past two years, growing from 10 per cent in 2019 to about 20 per cent. The Italian online market is projected to be worth £3.6 billion (€4.3 million) by 2024; Sisal's online market share is currently 11.9 per cent, which when combined with Flutter's existing assets will bring the total to about 20 per cent.

Market opportunity

Flutter chief executive Peter Jackson said the company was looking to attain "a gold-medal position" in the Italian market.

“For some time we have wanted to pursue this market opportunity via an omnichannel strategy and this acquisition will ideally position us to do so,” he said. “Sisal has grown its online presence significantly in recent years, aided by its proprietary platform and commitment to innovation. I’m excited to see how Flutter can complement these capabilities through our scale, differentiated products and operational capabilities.”

The deal will also see Flutter’s recreational customer base grow by 300,000 online average monthly players and more than 9.5 million retail customers.

"Through our commitment to digital innovation, international expansion and safer gambling, we have achieved a leadership position in Italy's online gaming market and developed our global footprint by winning lottery tenders in Morocco and Turkey," said Francesco Durante, Sisal chief executive. "We are delighted to join Flutter and are convinced that through its scale and operational capabilities, we will be able to further strengthen our leadership in the markets we operate in."