Flutter Entertainment, the parent company of Paddy Power and FanDuel, has taken a decisive step to bolster its international footprint by purchasing Italian gaming operator Snaitech for €2.3 billion ($2.6 billion). This acquisition, expected to conclude by the second quarter of 2025, marks a crucial move for Flutter as it aims to capture a lion's share of the burgeoning Italian market.

Snaitech, currently a subsidiary of Playtech, stands as Italy's third-largest business-to-consumer operator with a market share just shy of 10% and 291,000 average monthly players. Featuring a blend of online and retail presence, Snaitech reported adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) of €256 million for the 2023 financial year on revenues of €947 million. This acquisition will propel Flutter to command almost 30% of the online gambling share in Italy, Europe's largest regulated gaming market.

“This transaction is compelling strategically and financially. 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 US and globally,” remarked Peter Jackson, CEO of Flutter Entertainment.

Moreover, the deal is expected to deliver operating cost synergies amounting to €70 million or more, enhancing Flutter's operational efficiency. Italy's online gambling penetration remains below 21%, substantially lower than mature markets like the UK and Australia, where rates exceed 60%. This gap offers Flutter a ripe opportunity for digital expansion, with online market growth anticipated to reach 10% over the next three years.

In addition to its online prowess, Snaitech boasts over 2,000 retail gaming shops across Italy, securing the second-highest market share in retail sports betting and gaming. This strategic acquisition adds to Flutter's previous Italian investments, including the purchase of Sisal in 2022 for $2.07 billion, further solidifying its presence in the competitive Italian market.

“I look forward to welcoming the Snai team to the Flutter Group and working with them to maximize the growth opportunity for our combined businesses,” added Jackson. This sentiment echoes the company's earlier strategic move into Brazil where it acquired a 56% stake in Betnacional-owned NSX Group for $350 million, establishing a formidable presence in another lucrative market.

Flutter's aggressive expansion strategy is underscored by its recent listing on the New York Stock Exchange and its continued interest in acquiring more gaming entities. Notably, the company is reportedly eyeing a deal with U.S. gaming giant PENN Entertainment.

By leveraging its diverse portfolio of brands—including FanDuel, Paddy Power, Betfair, and Skybet—Flutter is well-positioned to capitalize on emerging market opportunities and navigate the complex regulatory landscapes of international gaming markets.

Snaitech's robust brand awareness in Italy, combined with Flutter's innovative product offerings and scale, promises a synergistic approach that could yield substantial future growth. As regulatory landscapes evolve and digital penetration increases, Flutter's strategic acquisitions highlight its commitment to maintaining a leading edge in the global gaming industry.