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Making a strategic move to dominate Europe's largest regulated gaming market, Flutter Entertainment has agreed to acquire Italian gaming operator Snaitech S.p.A (Snai) from Playtech for $2.56 billion. The deal, announced on September 17, 2024, is expected to close by the second quarter of 2025, solidifying Flutter's position as the leader in Italy's online gaming sector.
Peter Jackson, Flutter's CEO, emphasized the strategic and financial significance of the transaction, stating, "It fits perfectly within our strategy for value creating M&A and creates a significant opportunity to accelerate Snai's growth by providing them with access to Flutter's market leading products and capabilities both in the U.S. and globally."
The acquisition builds upon Flutter's previous entry into the Italian market with its 2022 purchase of Sisal for $2.07 billion. Once completed, the combined entity will command nearly 30% of Italy's online gaming market share, surpassing competitors in Europe's most lucrative regulated gaming landscape.
Snai's impressive growth trajectory factored heavily into Flutter's decision. The Italian operator reported compound growth rates of 26% in online revenue and 32% in Adjusted EBITDA from 2020 to 2023. In 2023, Snai generated $1 billion in revenue after tax deductions, with 50% derived from online operations.
Beyond its digital presence, Snai brings a robust retail network to Flutter's portfolio, including the second-highest market share in Italian sports betting (19%) and gaming (14%), along with ownership of race tracks and gaming machines. This diverse asset mix positions Flutter to capitalize on Italy's evolving gaming landscape, which generated $23.2 billion in gross gaming revenue in 2023.
Flutter projects $77.9 million in operating cost synergies over the first three years post-acquisition, primarily through technology and content integration. This efficiency is crucial as Flutter seeks to accelerate growth in a market with significant untapped potential – only 21% of Italy's gaming revenue came from online channels in 2023, compared to over 60% in mature markets like the UK and Australia.
The Snai deal follows Flutter's recent expansion into Brazil, where it acquired a 56% stake in Betnacional-owner NSX Group. These strategic moves align with Flutter's global growth strategy, which has fueled speculation about potential interest in US-based PENN Entertainment.
As Flutter continues its expansion, the company's stock saw a modest 2.5% increase in mid-day trading following the announcement. With its New York Stock Exchange listing earlier this year and a strong Q2 revenue report of $3.6 billion, Flutter appears well-positioned to leverage its growing international portfolio and cement its status as a global gaming powerhouse.
