Flutter Entertainment (NYSE: FLUT) is reportedly in discussions to acquire Playtech’s (LSE: PTEC) Snaitech business, a development that propelled shares of Playtech to significant highs during London trading. According to media reports, FanDuel, a subsidiary of Flutter, may offer up to $2.56 billion for Snaitech, a notable premium over Playtech’s market capitalization of approximately $2.12 billion.
Snaitech, founded in 1990 and branded as Snai, is a major player in Italy’s wagering scene, offering horse and sports betting services, as well as operating over 49,000 gaming and lottery devices across the country. Its comprehensive website, snai.it, provides a wide array of gaming and entertainment services including sports and horse racing betting, poker, skill games, casino games, virtual sports, and lotteries. The site is designed to be accessible on various devices through adaptive technology, and it also offers betting and casino apps.
Snaitech expanded its reach into Austria and Germany with the 2022 acquisition of Happybet. Following the news of Flutter’s interest, Playtech shares experienced a surge of up to 22%, marking their most significant one-day increase in nearly three years.
Although there is no detailed information regarding how far along the talks between Flutter and Playtech have progressed, Playtech has stated it is in exclusive negotiations. Playtech has a history of being involved in consolidation speculation without tangible outcomes. However, the sale of Snaitech might shift this narrative. In July 2023, Playtech attempted to acquire 888 Holdings Plc for $890 million but was unsuccessful. Previously, in October 2021, Playtech had agreed to a $2.8 billion deal with Aristocrat Technologies, although this deal collapsed when two other potential suitors retracted their bids.
Selling Snaitech would strategically position Playtech as a full business-to-business (B2B) entity in the European gaming market while minimizing its vulnerability to fluctuating consumer spending trends.
For Flutter, acquiring Snaitech aligns well with its strategic goals, enhancing its footprint in Italy, the third-largest economy in the Eurozone after Germany and France. In 2022, Flutter acquired the Italian lottery giant Sisal for $2.2 billion, and it already has significant market shares in Italy with its PokerStars and Betfair brands.
Italy represents Europe’s second-largest regulated gaming market, trailing only the UK. Despite a surge in online wagering penetration post-pandemic, Italy’s rates remain lower than comparable markets like Australia and the UK, indicating substantial growth potential. Thus, Flutter’s potential acquisition of Snaitech could offer long-term validation and expansion opportunities in Italy’s burgeoning online gaming sector.
