Lottomatica Group makes money through three distinct businesses in Italy's regulated gambling market: Online, Sports Franchise and Gaming Franchise. Online customers use digital betting and gaming services; sports franchises distribute betting through shops and corners; and the gaming network connects and manages amusement-with-prizes machines, video lottery terminals and gaming halls. The revenue mechanism and cost base are different in each case.
That distinction is more informative than the headline amount wagered. Lottomatica handled €44.670 billion in bets during 2025, but reported €2.247 billion in consolidated IFRS revenue. The difference is not a missing sum of money: it reflects the nature of wagering, payouts, taxes, distribution arrangements and accounting recognition. Nor does the group's large retail footprint mean that it owns every outlet.
This analysis uses Lottomatica Group S.p.A.'s FY2025 annual report, with the nine months ended 30 September 2026 used as a separate, more recent test of how the model behaves. The Lottomatica Group overview covers corporate identity, while this page focuses on the economics.
Business flow: customers place bets or use machines → winnings and regulatory charges affect the economics → the group recognises revenue under the applicable accounting rules → operating partners, suppliers and employees are paid → adjusted operating earnings remain before other corporate costs.
Three operating segments, three revenue models
The three segments serve overlapping categories of customers, but distribution and asset requirements vary substantially.
| Segment | Main offer and customer channel | How it is delivered | Principal economic dependencies |
|---|---|---|---|
| Online | Digital sports betting (iSports), casino-style gaming (iGaming) and other permitted games | Group-operated digital brands, customer accounts and online platforms, supported by external suppliers | Gaming margins, customer acquisition, product mix, technology and regulatory duties |
| Sports Franchise | Sports and horse-racing bets at retail shops and betting corners | A distribution network involving franchisees and other retail partners | Sports payouts, commissions to the network, shop economics and concessions |
| Gaming Franchise | Amusement-with-prizes machines (AWPs), video lottery terminals (VLTs) and gaming halls | Concession-based machine networks, external locations and some directly managed assets | Machine usage, operator remuneration, hardware, network costs, gaming levies and concessions |
Despite the segment names, Online is a digital proposition; Sports Franchise concerns retail betting; and Gaming Franchise includes machines, network connections and some directly operated halls. Network locations are not necessarily company-owned.
Selected B2B software, equipment and service activities also exist, but Lottomatica is not predominantly a B2B technology vendor.
Online: betting, gaming and account distribution
The Online segment combines internet sports betting, online gaming and other permitted digital products. Customers interact through websites or mobile interfaces associated with brands in the group's portfolio. The business must provide or procure account infrastructure, gaming content, trading capability, payment processing, risk controls and customer support. None of those functions is cost-free simply because the customer journey occurs on a screen.
Sports-betting stakes and the proportion returned in winnings both matter. More bets need not produce a matching increase in gross gaming revenue (GGR), or stakes less winnings. Online gaming has different payout dynamics.
Digital distribution can scale without new shops, but requires marketing, specialist staff, infrastructure and concessions. Lottomatica uses both internal capabilities and third-party games, odds and software; it did not necessarily create every component.
Lottomatica's portfolio includes consumer names such as Lottomatica, Better, GoldBet, Betflag and Planetwin365. Branding is not the same thing as an operating licence or the legal identity of the company handling a particular transaction. The brands and subsidiaries analysis separates those levels.
The physical network may also assist parts of the digital customer journey, including account-related support and distribution functions where authorised. That does not turn Online revenue into Sports Franchise revenue: the issuer reports its segment performance using defined accounting and management policies.
For FY2025, Online generated €954.506 million of reportable-segment revenue and €528.963 million of adjusted EBITDA. Its adjusted EBITDA margin, calculated using those company measures, was approximately 55.4%. The ratio is unusually important for interpreting the group: Online accounted for about 42.3% of reportable-segment revenue yet approximately 61.8% of group adjusted EBITDA. It was not, however, 61.8% of statutory net profit or cash flow.
Sports Franchise: shops and betting corners
Sports Franchise gives Lottomatica a physical route to customers placing sports and horse-racing bets. At 31 December 2025, the group reported 3,790 operating points of sale within this sports network. These include retail betting shops and corners, not 3,790 sites that can automatically be described as company-owned stores.
Independent outlets can distribute the group's products and receive remuneration while Lottomatica retains other responsibilities. Partner incentives differ from those of a wholly owned channel. The full amount staked at an outlet is not automatically group revenue.
Sports Franchise also has a specific exposure to sporting outcomes. If customers win a larger proportion of their bets, the amount left after winnings can narrow even while betting volumes increase. This is not simply a theoretical caveat. In the first nine months of 2026, Lottomatica reported Sports Franchise bets up approximately 11% against the equivalent 2025 period, while management-reported segment revenue was down approximately 1%. The company attributed performance to less favourable payout conditions; the result demonstrates why wagering growth cannot be treated as a direct sales-growth proxy.
In FY2025, Sports Franchise contributed €527.163 million of reportable-segment revenue and €141.798 million of adjusted EBITDA, an adjusted margin of approximately 26.9%. Distribution-partner compensation, the cost of maintaining a physical channel and varying sporting outcomes help explain why this is not directly comparable with Online. The segment belongs to retail betting economics, not to the AWP/VLT machine network discussed below.
Gaming Franchise: machines, networks and halls
Gaming Franchise operates around a different Italian retail-gaming system. AWP means an amusement-with-prizes machine; VLT means a video lottery terminal. These products are governed by specific technical, connection and concession arrangements. The group participates through regulated network activities and associated gaming operations, rather than merely lending its name to machines installed by others.
The FY2025 annual report provides a useful dated breakdown:
| Gaming network measure at 31 December 2025 | Reported number | What it means |
|---|---|---|
| Operative AWPs | 64,107 | Machines operating within the reported network; not all necessarily owned by Lottomatica |
| Owned AWPs | 49,831 | The specifically identified owned-machine subset |
| Operative VLTs | 18,284 | Connected terminals in operation |
| Directly managed gaming halls | 123 | A separately reported directly managed estate |
Machines are not shops, and halls can contain many machines. The broader 17,386 points of sale at year-end 2025 should not be labelled wholly owned premises.
On the operational side, electronic connections help track authorised machine activity and enable concession-related administration. The distribution chain can involve equipment makers, location operators, technology suppliers and the concession holder. The economics reflect winnings, levies, network remuneration, machine acquisition or maintenance costs and the right to operate in this regulated market.
In FY2025, Gaming Franchise reported €773.623 million of segment revenue and €185.398 million of adjusted EBITDA, giving an adjusted margin of approximately 24.0%. This was the second-largest segment by reportable revenue, but considerably smaller than Online in adjusted earnings. The distinction illustrates how equipment-intensive, partner-dependent distribution can generate substantial revenue without matching the digital segment's margin.
From stakes to recognised revenue
A corporation may disclose several seemingly contradictory totals that are all correct within their own definitions. Lottomatica's FY2025 numbers are a particularly clear example.
| FY2025 group measure | Amount | Correct interpretation |
|---|---|---|
| Bets | €44.670bn | Amounts wagered across reported activities, before winnings |
| Gross gaming revenue (GGR) | €4.735bn | Wagers less winnings under the issuer's gaming definition |
| Revenue for reportable segments | €2.255bn | Management/segment reporting perimeter |
| Consolidated IFRS revenue | €2.247bn | Revenue recognised in the audited consolidated income statement |
| Adjusted EBITDA | €856.159m | Issuer-defined adjusted earnings measure, not cash or statutory net profit |
The values are not a mechanical waterfall in which each row can be derived by subtracting the next row from the previous one. Wagering activity is substantially reduced by winnings before any question of gaming duties, concessions and different forms of operator participation arises. Segment reporting can include defined activities that are not treated identically in the consolidated IFRS presentation. Different product and distribution models also affect how transactions appear in the accounts.
The small difference between €2.255 billion of reportable-segment revenue and €2.247 billion of consolidated IFRS revenue is therefore not an unexplained loss. It arises from the reporting basis and requires the reconciliation provided in the issuer's notes. It would be equally misleading to call €4.735 billion GGR the company's IFRS turnover.
The more recent nine-month 2026 results reinforce the distinction: €35.204 billion of bets, €3.516 billion GGR, €1,717.781 million of management-reported revenue and €1,686.608 million of consolidated IFRS revenue. These are separate measures for the period ended 30 September 2026, not substitutes for audited FY2025 figures. Full accounting reconciliations belong in our financial results and debt report.
Why margins differ across channels
The FY2025 accounts allow a comparison of adjusted operating performance on the issuer's own common segment basis:
| FY2025 segment | Reportable revenue | Adjusted EBITDA | Adjusted EBITDA margin |
|---|---|---|---|
| Online | €954.506m | €528.963m | 55.4% |
| Sports Franchise | €527.163m | €141.798m | 26.9% |
| Gaming Franchise | €773.623m | €185.398m | 24.0% |
| Total reportable segments | €2,255.292m | €856.159m | 38.0% |
Source: Lottomatica Group FY2025 annual report, reportable-segment information. Margins are adjusted EBITDA divided by reportable-segment revenue, rounded to one decimal place.
Our reading is that Lottomatica's Online operation provides a disproportionately large share of adjusted operating earnings, while its franchise channels provide different forms of customer reach and asset exposure. That does not prove that every incremental online customer produces the same margin. Marketing, payout mix and acquisition economics can still change over time.
The financial statements also show the economic cost of the physical network. Distribution network compensation totalled €880.857 million in FY2025, up from €828.381 million in FY2024. This is a group-level cost category, not a line that should be assigned in full to any one segment. It underscores why an extensive franchise network is not costless distribution.
Adjusted EBITDA is not statutory profit: amortisation, financing costs, taxes and other items matter. A higher adjusted margin alone cannot establish stronger free cash flow or shareholder returns.
Technology, suppliers and ADM concessions
Lottomatica's value chain includes game and odds providers, software and infrastructure suppliers, gaming-machine manufacturers, operating partners, the group's regulated businesses and customers. Some technology and services are developed or supplied within the wider portfolio; other inputs come from third parties. Published supplier descriptions should not be converted into claims that every named supplier has a current exclusive partnership or that the group owns all intellectual property used across its channels.
Simplified chain: content, odds, hardware and technology suppliers → authorised group operators and concession/network infrastructure → digital platforms, franchise partners or gaming halls → customers.
Italian concession rights and operating requirements are another material part of the model. The Agenzia delle Dogane e dei Monopoli (ADM), Italy's customs and monopolies authority, oversees the relevant regulated activities. A concession is an operating right within a defined Italian regime; it is not the same as corporate ownership of a brand or a general software licence.
Technology also brings continuing costs: hosting, data security, equipment certification, monitoring, maintenance and upgrades. The machine network can require capital investment that an online channel does not incur in exactly the same way. Conversely, online gaming requires ongoing product and customer-acquisition spending. Our markets, operators and licences dossier addresses which entities hold particular authorisations. An Italian authorisation must not be mistaken for a UK Gambling Commission licence or proof that a service is available to British players.
What could change the model?
The principal variables are the balance between online and retail activity, the outcome of sports bets, changes to taxation and concessions, and the economics of distribution agreements. A shift towards Online could improve the reported adjusted earnings mix, but it would not remove regulatory, customer-acquisition or payout risk.
The proposed combination with CIRSA, announced in 2026, introduces a separate strategic possibility. As at 11 November 2026 it was not completed, and the intended second-quarter 2027 completion remained subject to required steps and approvals. CIRSA should not be added to Lottomatica's FY2025 or nine-month 2026 operating figures. See history and acquisitions and risks and prospects for the conditional transaction context.
Continue the Lottomatica dossier
- Group overview: company identity and the three-channel picture.
- Brands and subsidiaries: legal entities and consumer names.
- History and acquisitions: how the portfolio was assembled.
- Financials: statutory measures, cash flow and debt.
- People and ownership: management and shareholders.
- Risks and prospects: strategic and operating uncertainties.
- Markets and licences: entity-level authorisations.
- Shares and outlook: LTMC and market context.
Our conclusion: Lottomatica's advantage is not simply the volume of betting passing through its network. It is the combination of digital reach, retail distribution and regulated machine operations, each carrying different costs and risks. Online supplied most of FY2025 adjusted EBITDA, while franchise activity broadened distribution at lower reported margins. The accounting distinctions, regulatory rights and conditional CIRSA proposal are essential to understanding what this model actually earns.