International Game Technology (NYSE: IGT) could see potential upside from upcoming developments in the Italian lottery market, where the company has maintained operations for over 30 years.

Italy's gaming regulator recently published request for proposal (RFP) documents, which Stifel analyst Jeffrey Stantial views as "modestly favorable" for IGT. The analyst maintains a "buy" rating with a $26 price target, suggesting over 50% potential upside.

Key Financial Impact:

• The Italian lottery contract generates €477M in consolidated revenues
• Contributes €386M in adjusted EBITDA
• Represents ~30% of Global Lottery revenues
• Accounts for ~20% of adjusted EBITDA
• IGT holds 61.5% economics in the operating joint venture with Allwyn

Competition Landscape:

• Flutter Entertainment (NYSE: FLUT) emerges as main competitor
• Flutter already maintains Italian presence through:
  • Pending Playtech's Snaitech acquisition
  • $2.2 billion Sisal acquisition (2022)
  • Existing PokerStars and Betfair operations

IGT's Competitive Advantages:

• Incumbent operator status
• Extensive lottery operator experience
• Technological ownership
• Favorable RFP timeline (March 17 deadline)
• Improved technical weighting in scoring matrix (50/50 vs. previous 70/30)

The Italian market represents an attractive opportunity as Europe's largest wagering market outside the UK and the Eurozone's third-largest economy. The March 17 submission deadline could favor IGT as incumbent, potentially limiting competitors' ability to develop comprehensive alternative proposals.

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