International Game Technology (IGT) has reported a decline in revenue for the first quarter of 2025. Despite this financial hit, the company remains optimistic about its future prospects, particularly as a crucial decision approaches regarding the highly contested Italy lottery license, for which IGT has specifically allocated significant funds to support its bid.

IGT reported its results for the first quarter ending March 31, 2025. The report showed a 10% year-on-year decrease in group revenue, totalling €583 million. Revenue was lower across three of IGT’s four core operating segments and across all geographic markets. Italy saw the shortest decline, with revenue down just 3% to $246 million. Revenue in the US and Canada, the primary source of income, was $259 million, a 20% drop compared to the previous year, while rest of world revenue slipped 7% to $79 million.

Looking at the bottom line, net profit was $27 million after accounting for non-controlling interest, marking a drop of 204% from last year. Adjusted EBITDA fell 24% to $250 million. Pre-tax profit hit $8 million, down 93%. However, when including profit from discontinued operations, net profit saw a lesser 53% fall to $60 million. Operating costs remained level at $445 million, while non-operating expenses jumped 78% to $82 million.

IGT attributed the drop in group revenue primarily to lower instant ticket and draw-based revenue, a segment that dropped 3% to $500 million. The company also noted a 46% drop in US multi-state jackpot wager-based revenue. This was attributed to higher activity in the previous year, along with associated lottery management agreement incentives, multi-year central system software licenses, and terminal sales in 2024. Other revenue declined by 28% to $89 million. Service revenue fell 10% to $557 million, while product sales revenue was down significantly by 38% to $26 million.

Focus on Italy Lottery License

During the Q1 earnings call on Tuesday, May 13, 2025, IGT CEO Vince Sadusky provided insights into the provider’s preparations for the upcoming Italy lottery license decision. IGT views the Italian market as a significant opportunity, particularly concerning the potential to retain the lottery license. IGT has a long history of controlling the Italian lottery, having done so since 1993. However, it faces fierce competition to keep hold of the license after its current term concludes in November 2025, with companies including Novomatic, Allwyn, and Flutter reportedly among those also vying for the concession.

Sadusky stated, as reported by iGaming Times from the call, that the license process is “well under way.” Italian gaming authorities have informed participants that the economic proposals submitted in the concession tender will be opened on May 19, 2025, although news regarding the outcome is expected before that date. The expectation from IGT is that the evaluation of the technical proposals is already complete and the results will be announced before May 19. In preparation for potentially securing the license for another term, IGT has issued a new €1 billion term loan. Of this amount, €500 million has been used for debt repayment under existing credit facilities, while the other €500 million has been specifically allocated and will only be utilised if IGT is awarded the Italian lottery license for another term.

Macroeconomic Headwinds and Lottery Resilience

The Q1 update also addressed broader macroeconomic factors and their potential impact on IGT’s business. Issues discussed included the impact of tariffs and concerns that these could potentially lead to another recession. Tariff concerns were also addressed by Light & Wonder in their Q1 earnings call earlier in May. Sadusky stated, as reported by iGaming Times from the call, that while these wider issues fuel fears, IGT remains upbeat on its own performance and expects the provider to continue to succeed in two of its core markets - the US and Italy. He acknowledged, as reported by iGaming Times, that the “world is currently faced with significant macroeconomic and geopolitical uncertainty,” and IGT is “not immune to these challenges.” However, he stated that the company feels good about the things they can control and the long-term prospects for the business. Sadusky also observed, as reported by iGaming Times, that “history has shown that lottery sales in the US and Italy have proved to be resilient in both absolute and relative terms during recessions,” implying confidence in the stability of these segments even during economic downturns.

Asset Sale Progress and Future Outlook

During the call, Sadusky also provided an update on the pending sale of a significant portion of IGT’s business. The sale of its global gaming and digital assets to private equity giant Apollo Global was a deal struck last July (2024). According to Sadusky, as reported by iGaming Times, the transaction is on track to complete in the third quarter of this year (2025). He noted that should the sale go through as expected, IGT would primarily become a lottery-only business. Sadusky concluded his remarks by stating, as reported by iGaming Times, that while the world currently faces great uncertainty, IGT is “excited about the initiatives we are working on to drive sustainable, long-term growth and shareholder value.”

In conclusion, despite a notable hit to Q1 revenue, IGT is strategically focused on the critical upcoming decision regarding the Italian lottery license, having allocated substantial funds to support its bid. The CEO expresses confidence in the historical resilience of lottery sales in key markets amidst broader macroeconomic uncertainty, as the company navigates the challenges and prepares for the expected completion of its asset sale to Apollo Global, positioning IGT for a potentially more lottery-centric future.