Lottomatica delivered a resilient first-quarter performance, with modest yet steady growth underpinned by strong digital momentum. Despite adverse sports results compressing margins in its betting segment, the group maintained positive topline and profitability trends. Online operations emerged as the clear growth engine, offsetting weakness in sports betting and stagnation in gaming. Revenue and EBITDA both advanced year-on-year, reflecting operational discipline and strategic positioning in high-growth digital channels. Management remains confident in achieving the upper band of its full-year guidance, while dismissing competitive threats from prediction markets, citing regulatory barriers and limited consumer appetite in its core Italian market.

Steady Growth Anchored by Digital Strength

Lottomatica’s first-quarter results reflect a business navigating operational headwinds while capitalizing on structural growth drivers. The group reported a gross gaming revenue (GGR) increase of 2% year-on-year to €1.25 million, signaling modest expansion despite volatility in certain verticals.

Revenue performance followed a similar trajectory, with total revenue rising 3% to €602 million, demonstrating stability in a complex operating environment. Profitability metrics, however, outpaced topline growth. Adjusted EBITDA climbed 7% to €236 million, underscoring the company’s ability to manage costs effectively while leveraging higher-margin segments.

The primary driver behind this performance was Lottomatica’s online business, which continues to gain traction across its addressable markets. The segment delivered double-digit growth, with revenue increasing 10% to €264.7 million, reinforcing the company’s strategic emphasis on digital transformation.

This strong online momentum effectively compensated for weaker contributions from other segments, highlighting the structural shift underway in the group’s revenue mix.

Sports Betting Segment Impacted by Low Hold Dynamics

While overall performance remained positive, Lottomatica’s sports betting division faced notable pressure during the quarter. Revenue declined 5% year-on-year to €142.4 million, down from €150.4 million in the comparable period.

The decline was not driven by demand weakness. On the contrary, betting activity increased significantly. Total betting volume rose 11% to €12.4 million, reflecting robust customer engagement and sustained interest in sports wagering.

However, profitability in betting is highly sensitive to outcome volatility, and the quarter was marked by unfavourable sports results, leading to a lower hold ratio. In essence, customer wins exceeded expectations, compressing operator margins despite higher betting volumes.

This dynamic illustrates a critical feature of the betting industry: revenue growth is not solely volume-driven but heavily dependent on margin realization. Even in periods of strong demand, adverse sporting outcomes can materially impact financial performance.

Balanced Portfolio Offsets Segment Volatility

Lottomatica’s diversified business model played a crucial role in mitigating the impact of sports betting weakness.

The online segment’s double-digit expansion acted as a stabilizing force, while the gaming division delivered a flat performance, neither contributing significantly to growth nor detracting from overall results.

This balance underscores the strategic importance of maintaining exposure across multiple verticals. The company’s ability to absorb volatility in one segment through strength in another reflects a well-calibrated portfolio approach.

Importantly, the shift toward online channels not only supports revenue growth but also enhances margin quality, given the typically higher profitability associated with digital operations compared to retail-based betting.

Management Signals Confidence in Full-Year Outlook

Despite the temporary headwinds in sports betting, Lottomatica’s leadership remains optimistic about the company’s trajectory.

Chairman and CEO Guglielmo Angelozzi highlighted the group’s sustained momentum across its core markets, expressing confidence in achieving the upper end of its full-year guidance. The company continues to target an adjusted EBITDA range of €940 million to €980 million for FY2026.

This guidance implies continued operational leverage and sustained growth in high-performing segments, particularly online. It also suggests that management views the first-quarter betting margin compression as cyclical rather than structural.

The reaffirmation of ambitious targets signals confidence in both market conditions and the company’s execution capabilities.

Prediction Markets Viewed as Non-Threat in Core Markets

Beyond financial performance, Lottomatica addressed emerging competitive dynamics, particularly the rise of prediction markets.

These platforms, which have gained traction in the United States, are increasingly drawing regulatory scrutiny in Europe. Authorities across several jurisdictions have taken decisive action. France’s l’Autorité Nationale des Jeux blocked a major operator, while countries such as Germany, Belgium, and Italy have also implemented restrictions.

In Italy specifically, prediction markets were effectively blocked in October 2025, reinforcing the regulatory barriers facing such models.

Lottomatica dismissed these platforms as a “non-issue”, citing two primary factors: their illegality in Italy and limited consumer demand for the types of bets they offer, particularly single-event and pre-match wagers.

This perspective suggests that, at least in its core market, Lottomatica does not view prediction markets as a credible competitive threat in the near to medium term.