Brightstar Cuts 2026 Revenue Outlook as Italy Lotto Charge and US Jackpots Weigh

The former IGT lottery business saw third-quarter revenue fall 4% as its new Italy Lotto licence fee ran through the top line and US jackpot sales slumped. It has taken about $80 million off the midpoint of its revenue range but kept its cash guidance.

• Brightstar Lottery reported third-quarter revenue of $607 million on 10 November, down from $629 million, and income from continuing operations of $45 million against $95 million
• Adjusted EBITDA slipped 2% to $289 million, while revenue from Italy fell 19% to $208 million as amortisation of the new Lotto licence fee rose to $99 million from $53 million
• Same-store sales of US multi-state jackpot games fell 30.6% after a 69.2% rise a year earlier
• The company lowered its 2026 revenue outlook to $2.435 billion to $2.455 billion, from $2.50 billion to $2.55 billion, and trimmed its adjusted EBITDA range, mainly on currency
• Net debt was $3.8 billion at 30 September, at 3.30 times leverage, after the final Lotto licence payment and a September refinancing of most of its 2028 notes

Italy Lotto Amortisation Takes the Top Line Lower

Brightstar Lottery PLC, listed in New York as BRSL, published its third-quarter results on 10 November. Revenue for the three months to 30 September was $607 million, down 4%, or 3% at constant currency. Income from continuing operations fell to $45 million from $95 million, of which $22 million, or $0.12 a diluted share, was attributable to Brightstar shareholders. Adjusted EBITDA was $289 million against $294 million, a margin of 47.5%. The release gives no operating income subtotal; adjusted EBIT, the company's own measure, fell 30% to $130 million.

The largest drag is accounting. The upfront fee for the new Italy Lotto licence is amortised against service revenue, and that charge rose to $99 million from $53 million, while Italian revenue fell 19% to $208 million. The release expects about $175 million of incremental Lotto amortisation to weigh on reported revenue in 2026. Italian same-store sales of instant ticket and draw games, which the release does not split between Lotto and the Gratta e Vinci scratch cards, fell 1.2% at constant currency after a 6.1% rise a year earlier.

US Jackpots Fall Away as Product Sales Climb

In the US, same-store sales of multi-state jackpot games fell 30.6% at constant currency, against a 69.2% rise a year earlier, and wager-based revenue from them fell 30% to $25 million. Product sales of retail hardware, software and instant tickets rose to $60 million from $25 million, other service revenue rose 11% to $121 million, and rest of world revenue rose 42% to $98 million. The release also cites a UK service contract transition, without detail. Chief Executive Vince Sadusky said revenue and profit were in line with expectations.

Guidance Lowered, Cash Outlook Held

The company now expects 2026 revenue of $2.435 billion to $2.455 billion and adjusted EBITDA of $1.14 billion to $1.16 billion. It attributes the revenue cut to lower second-half same-store sales expectations, the timing of Italian business-to-consumer expansion and currency, and the EBITDA cut mainly to currency, now assuming a euro at $1.15 for the year rather than $1.17. It kept its forecast of about $750 million of cash from operations before the final Lotto payment of €1.43 billion, or $1.67 billion.

Net debt rose to $3,842 million from $2,723 million at the end of 2025, which the release attributes to the final Lotto payment, and leverage was 3.30 times. The company paid $127 million of dividends and $62 million of buybacks in the nine months, says more than $200 million went to both through 9 November, and declared a $0.23 quarterly dividend payable on 8 December. The release carries no contract news; October brought a contract extension with Spain's ONCE on undisclosed terms.

The Lotto Licence Has Moved From the Balance Sheet to the Income Statement

Adjusted EBITDA excludes the amortisation charge, which is why it barely moved. Adjusted EPS does not, and fell to $0.10 from $0.36, so shareholders now see the cost of the concession quarter by quarter. Minority partners took $23 million of the $45 million of quarterly profit, having put $656 million of capital into Brightstar subsidiaries in the nine months, according to the cash flow statement.

The Guidance Cut Is Mostly Outside Management's Control

Jackpots and the euro account for most of the downgrade, and Brightstar is not alone: Bally's Intralot, reporting on the same day, said its legacy US lottery revenue fell 11% at constant currency over nine months, partly because the prior year had been boosted by record jackpots. The exception is the Italian business-to-consumer expansion, the one item Brightstar controls and describes only as timing.

Italy's Budget Could Ask for More Cash

A leaked draft of Italy's 2027 budget bill would extend Brightstar's Gratta e Vinci concession by 15 months for about €150 million paid in advance, according to Jamma, as iGT reported in October. Parliament can still amend the bill. Another upfront payment would land on a balance sheet at 3.30 times, a level Chief Financial Officer Max Chiara says is within the target range.

Strip out the licence accounting and Brightstar's quarter was close to flat. The guidance cut came mostly from jackpots and the euro, and Rome may yet want another cheque.