Brightstar Lottery’s post-Italy cash-flow inflection, digital growth, and defensive contracts create a potentially mispriced leveraged pure-play opportunity.
Overview
Brightstar Lottery, formerly IGT before its July 2025 restructuring, is now a pure-play lottery technology and operations company serving nearly 90 customers across six continents. Its government-linked contracts, secure infrastructure, and 5–15-year terms create a defensible, subscription-like model, with approximately 80% of revenue recurring. **The central investment opportunity is a cash-flow inflection:** the $1.03 billion share of the final Italy Lotto license payment has been made, positioning normalized annual free cash flow above $400 million. Q2 2026 revenue declined 7% to $584 million because of $47 million of Italy license amortization and the U.K. contract transition, but adjusted EBITDA rose 4% to $286 million and margin expanded to 48.9%. Digital wagers grew 22% globally, including 29% in U.S. iLottery and 23% in Italy. Management reaffirmed 2026 revenue guidance of $2.50–$2.55 billion and adjusted EBITDA guidance of $1.16–$1.19 billion. **Valuation remains depressed:** the stock trades near $11.05, versus a $27.09 DCF value, $45.83 probability-weighted five-year value, and average analyst target of $16.03. Catalysts include debt reduction, OPtiMa savings, digital expansion, and Brazil launches.