European lottery groups combine stable, cash flow-generative core operations with a structural online growth opportunity, as digital penetration increases in both lottery products and broader gaming products, Barclays notes in its analysis of Allwyn and Bally's Intralot.
As it explains, mergers and acquisitions (M&A) and sector consolidation are accelerating this shift toward faster-growing B2C online gaming, as demonstrated by Allwyn’s acquisition of PrizePicks and BYLOT’s acquisition of Evoke.
European lotteries and regulated betting benefit from protection through licenses, established retail distribution networks, highly trusted brands, and extensive compliance requirements. These characteristics strengthen the positions of incumbent players and limit competition from unlicensed and small-scale providers.
Bally’s Intralot: Initiation of coverage with OW, target price €1.40
Bally's Intralot is a large-scale, omnichannel platform that combines a defensive B2B/B2G lottery technology business with a high-margin B2C online business, following the acquisition of Bally's International Interactive (BII) in October 2025.
The B2B business offers quality characteristics — revenue with long contractual duration, with a historical renewal rate of around 89%, which is strengthened by the extension of the contract with the Irish National Lottery until November 2034 and the new shared-services contract in British Columbia — while BII adds structurally faster growth and an EBITDA margin of around 40% (before the impact of the tax increase in the United Kingdom).
Net leverage, at 4x pro forma in H1 2026 (before the Evoke deal), is at the upper end of our coverage in the gaming sector and we believe the market is pricing in the leverage while overlooking the cash flow generation potential.
Our target price of €1.40, based on DCF, implies 30% upside, supporting our Overweight rating. Key risks are delays in integration, lower-than-expected synergy realization, further tax increases, and a slower deleveraging path.
The proposed acquisition of Evoke would position BYLOT as a large-scale online operator and, in our view, as the fastest-growing company in the sector. This forms the basis for our upside scenario for BYLOT. Near-term catalysts would include court and regulatory approval of the Evoke deal, publication of the synergy realization timeline, signs of mitigation of the tax burden in the United Kingdom, and progress in refinancing.
Allwyn: Initiation of coverage with EW, target price €14.00
Allwyn is, in our view, one of the highest-quality lottery businesses in Europe. It has a diversified portfolio, defensive cash flow generation, and an established digital growth outlook, with the online channel representing around 49% of pro forma NGR.
We forecast CAGR of around 5% for net revenue and around 9% for adjusted EPS in the 2026–30E period, a gradual increase in distributed dividends, and gradual deleveraging, the analysts write.
However, we see limited near-term catalysts: the UK National Lottery margin recovery is driven by investments, while renewals in Austria and Illinois create headwinds ahead of their resolution in 2027.
The concession for the core games in Greece is the main valuation volatility factor, contributing around 30–35% of the group’s adjusted EBITDA. Our reverse DCF indicates that the market is pricing in a 55% probability of renewal on unchanged terms, leaving the risk/reward relationship broadly balanced.
Our target price of €14.00 implies upside of around 15%, supporting our Equal Weight rating relative to the rest of our coverage.