Tuesday, January 17, 2006

Lottery management concentration Running lotteries is a very profitable business. That's why Italian lottery company Lottomatica acquired US electronic lottery management firm Gtech in a $4.6 billion deal. Lottomatica is a closely-held firm that runs Italy's state lottery, one of the world' biggest. Gtech, which has been a publicly traded company, is the world's largest manager of lotteries, and has a number of contracts with 25 US states and with 54 foreign governments. Gtech also is involved in money transfer and debit card businesses. The combined company will have revenue of $1.9 billion and will become by far the larges lottery-oriented company. Interestingly enough, Lottomatica has until recently a 30% share in US firm Scientific Games, one of Gtech's biggest rivals. Though it specializes especially in scratch-off cards and racetrack betting systems, Scientific Games has branched out into electronic lottery management as well, and the two companies are major competitors for many contracts. (And Gtech has moved into the scratch-off lottery card line as well.) Third-place player in the field is International Lottery & Totalizator Systems, another US firm. It is far smaller in size than either Gtech or Scientific Games, who now have the market virtually sewn up, both in the US and internationally. Virtually every state lottery contract now awarded is a contest between the two. 7:50:43 PM

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