Lottomatica Holds Guidance and Cirsa Timing but Won't Size Its Budget Bill Cost

Lottomatica and Cirsa have both reported growth weeks before shareholders vote on their merger, and neither has sized Italy's budget bill. Equita puts up to €30 million of Lottomatica's annual EBITDA at stake before mitigation.

• Lottomatica's adjusted EBITDA rose 8% to €665.5 million on revenue of €1.72 billion in the nine months to September, and it confirmed its 2026 guidance
• Its Italian online share reached 31.7% in the third quarter, up 0.9 points, with a record 32.4% in September
• Cirsa's third-quarter net revenue rose 12.0% to €628 million and adjusted EBITDA 11.1% to €203 million, with leverage at 2.66x
• Chief executive Guglielmo Angelozzi declined to discuss Italy's budget bill, which leaves online untouched but raises slot levies and concession costs
• The all-share merger still targets the second quarter of 2027, though Cirsa's vote has moved from 25 to 30 November

Online Carries Lottomatica Through Poor Sports Results

Lottomatica reported nine-month revenue of €1,717.8 million on 3 November, up 5%, and adjusted EBITDA of €665.5 million, up 8%, according to Teleborsa. On normalised payouts, it says, adjusted EBITDA reached €715.1 million, up 19%. Adjusted net profit rose 2% to €262.6 million, Il Sole 24 Ore reported, and the third quarter matched consensus.

Online revenue rose 13% to €780.8 million. Sports Franchise slipped 1% to €376.7 million and Gaming Franchise, the machine business, 2% to €560.3 million. Online share in Italy was 31.7% in the quarter, with iSports at 34.8% and iGaming at 31.2%, according to Agimeg. Net debt was €2,164 million, or 2.4x. The company expects normalised adjusted EBITDA in the upper part of its €940 million to €980 million range.

Cirsa Reports Double-Digit Growth and Moves Its Vote

Cirsa's third-quarter report, published on 4 November, shows organic revenue growth of 8.1% and net profit up 48.1% to €33.6 million. Online turnover rose 32.5%, though customer-friendly sports results cost about €10 million of EBITDA. Cirsa expects the high end of its guidance and says the merger is "progressing as expected".

Its extraordinary meeting is now on 30 November, with a second call on 1 December, instead of 25 and 26 November, because of when the merger documents were notified in Spain's commercial registry gazette, it says. Lottomatica votes on 23 November. The terms agreed on 2 September are 0.668 new Lottomatica shares per Cirsa share, a €1.56 extraordinary dividend, about €262 million, and a €744 million capital return proposed afterwards.

Filings are in for competition clearance in Italy, Spain, Mexico and Morocco, foreign investment approval in Italy and Spain, and the EU Foreign Subsidies Regulation; gaming approvals are also a condition. Angelozzi told analysts approvals were in progress and financing secured. The merger must take effect by 10 December 2027.

Lottomatica Leaves the Budget Bill to the Brokers

The bill before Parliament would raise the PREU levy from 24% to 25% on AWP slots and from 8.6% to 9.6% on VLTs from January, according to Jamma's account of the certified text, with a 20% rate for AWPs paying out at least 70%. Concessions would run to 2029 for €14,250 a year per betting shop, €8,550 per corner, and a one-off €150 per AWP and €7,500 per VLT. It contains no standalone online measure.

"We do not like to comment on budget laws, proposals at this stage, as everything is open," Angelozzi told analysts, according to Investing.com's transcript. He said the concession increase exceeds inflation, but "there is also three years of extension, which is a positive". Cirsa's results documents do not mention the bill.

Equita estimates €20 million of EBITDA on VLTs, up to €10 million on AWPs and €27 million more annual capex than in 2026, Milano Finanza reported. Banca Akros puts the sector's annual cost at €300 million to €315 million, about 30% of it Lottomatica's. Intermonte expects a limited impact, noting that online was about 65% of first-half adjusted EBITDA.

The Bill Misses the Part of Lottomatica That Is Growing

Equita's €30 million is about 3% of the guidance range, and online's exemption matters more than any point of levy. The estimates are unsettled, however: Akros's share implies €90 million or more on our arithmetic, though that spans all measures and Equita's figure only the levies. With the Treasury itself doubtful about higher levies and Parliament free to amend, shareholders vote without a company figure.

Cirsa's Italian Slots Show How Thin the Margin Is

Cirsa's Slots Italy unit, with 15,391 machines, paid €234.7 million of gaming taxes in nine months and earned €23.0 million of EBITDA. One point on a 24% levy is a 4.2% rise: on our arithmetic, about €10 million on that line, more than 40% of the unit's EBITDA, before supply-chain sharing or payout changes. The unit is small, but it would become Lottomatica's exposure.

The Delay Is Procedural; the Cash Calendar Is Not

The merger terms are unchanged. But the 2.7x completion leverage forecast predates the bill, against a 2.0x to 2.5x target, and concession instalments would start in March 2027, just before the dividend and capital return. The sums are small beside the deal but fall in the same months.

The bill looks like a cost for Lottomatica, not a threat to the merger. A company asking shareholders to approve that merger should still say what the cost is.