Domenico Ghilotti

Domenico Ghilotti asked for Brightstar's initial thoughts on the Italy iGaming launch and the potential tender for instant tickets in Italy in 2027, including interest in retail concessions. He also sought clarification on the building blocks of the 5% organic growth target for 2026, specifically the contribution from key geographies. Finally, he inquired about the expected cash leakage from financial charges, cash taxes, or working capital, given the 2026 operating cash flow guidance.

Answer

Vincent Sadusky (CEO) discussed the Italy digital opportunity via the My Lotteries app, noting good progress with minimal marketing, leveraging retail player interactions, and a 20%+ increase in iLottery wagers in 2025. He anticipates a similar tender process for scratch-and-win as Lotto, potentially by late 2026. Massimiliano Chiara (CFO) detailed the 2026 organic growth drivers: core retail same-store sales, iLottery, positive LMA, and Italy B2C, while acknowledging U.K. transition headwinds. For cash flow, Massimiliano Chiara expects optimized interest expense and significantly lower cash taxes (around $150 million) in 2026 due to amortization and other optimizations.

Domenico Gilotti of Equita inquired about Brightstar Lottery's initial thoughts on its iGaming launch in Italy, the potential 2027 tender for instant tickets, and interest in retail concessions in Italy. He also sought clarification on the building blocks of the 5% organic growth target for 2026, specifically the contribution from key geographies.

Answer

CEO Vincent Sadusky discussed the Italy digital opportunity via the MyLotteries app, noting progress with minimal marketing, a new digital gaming executive, and significant iLottery wager growth (up 20% in FY25) and market share gains (3 points). He anticipated a similar process for the scratch-and-win tender. CFO Massimiliano Chiara detailed the 2026 growth drivers: 2 points from core same-store sales, 1% from iLottery, positive LMA, and 1% from Italy B2C, while acknowledging the UK transition as a headwind. Mr. Sadusky added that Italy's FY25 same-store sales were up 2% (3% normalized). Mr. Chiara also clarified the operating cash flow guidance, explaining that interest expenses were optimized, and cash taxes are expected to decrease significantly in 2026 due to timing and amortization.

Asked for an update on the Texas lottery renewal and for clarification on the nature of the LMA incentive/shortfall impact expected in the first half of the year.

Answer

The Texas lottery bid has been submitted and a decision is expected in H1 2025. The negative LMA impact in H1 is a combination of a small shortfall and a significantly lower incentive compared to the prior year, based on a conservative view of jackpot activity.