Company Presentation

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Company Presentation Tokyo, October 7,
2008 Italian Investor Conference
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Safe Harbour Statement
Disclaimer This presentation contains
forward-looking statements regarding future
events and the future results of Lottomatica that
are based on current expectations, estimates,
forecasts, and projections about the industries
in which Lottomatica operates, and the beliefs
and assumptions of the management of Lottomatica.
In particular, among other statements, certain
statements with regard to management objectives,
trends in results of operations, margins, costs,
return on equity, risk management and competition
are forward-looking in nature. Words such as
expects, anticipates, targets, goals,
projects, intends, plans, believes,
seeks, and estimates, variations of such
words, and similar expressions, are intended to
identify such forward-looking statements. These
forward-looking statements are only predictions
and are subject to risks, uncertainties, and
assumptions that are difficult to predict because
they relate to events and depend on circumstances
that will occur in the future. Therefore,
Lottomaticas actual results may differ
materially and adversely from those expressed or
implied in any forward-looking statements.
Factors that might cause or contribute to such
differences include, but are not limited to,
economic conditions globally, the impact of
competition, political and economic developments
in the countries in which Lottomatica operates,
and regulatory developments in Italy and
internationally. Any forward-looking statements
made by or on behalf of Lottomatica speak only as
of the date they are made. Lottomatica does not
undertake to update forward-looking statements to
reflect any changes in Lottomaticas expectations
with regard thereto or any changes in events,
conditions or circumstances on which any such
statement is based.
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Agenda

• Group Overview
• Strategy
• Market Environment
• Financials 1H08 and Guidance
• Backup BP 2008-2010

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Group Overview
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Mission
Lottomatica Group will be the leading commercial
operator and provider of technology in the
regulated worldwide gaming markets by delivering
best-in-class products and services, with a
commitment to highest levels of integrity,
responsibility, and shareholder value creation.
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The Group Value Chain
Lottomatica Group is a leading player in the
government-sponsored gaming value chain

SYSTEM INSTALLATION SUPPORT
INFRASTRUCTURE DEVELOPMENT
SOFTWARE DESIGN
CONTENT DEVELOPMENT/ MARKET RESEARCH
GAMING OPERATIONS

• System Architecture
• Master system coding and data warehousing

• Implementation of large-scale systems
• Ongoing maintenance

• Full Suite of Terminals
• Networking

Integration in key areas provides platformfor
substantial growth opportunities
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Global Player in the Gaming Industry
B2B GTECH COMPANIES
B2C LOTTOMATICA BRANDS
MARKET SEGMENT
Traditional Lottery (online) Instant
Lottery Gaming Solutions Sports
Betting Interactive Channels Commercial
Services
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Lottomatica Group strengths

• Global Market Leadership and Balanced portfolio
  of international contracts
• 59 worldwide lottery market share
• Conduct business in over 50 countries
• Diversified revenues 49 Italy, 30 US, 21
  other countries (FY07)
• Sustainable high-margin business combined to a
  growing market
• 2007 EBITDA margin of 42
• Outstanding historical hit rates in the
  re-bidding process
• Strong Management Team

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2007 Revenues Breakdown

• A well-balanced and diversified revenue
  portfolio, by geography and by market segment
• Stable, recurring core lottery business with
  predictable revenues (2007 1,661M)

• Lotteries Italy Lottomatica manages Lotto and
  Instant Lotteries businesses
• Lotteries USA GTECH is the service provider of
  26 of the 43 online lottery authorities
• Lotteries Rest of World GTECH provides services
  to 53 non-US online lotteries in the world
• SB and Interactive In 2007, Lottomatica began
  operating fixed-odds sports betting in Italy
• Gaming Solutions Italy, broader role to become
  gaming operator International, gaming and
  technology machines provider

Sports Betting and Interactive
40 - 2
Commercial Services
97 - 6
Gaming Solutions
101 - 6
Figures in M
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Strategy
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Lottomatica Group Strategy
Leading systems capabilities and strong cash flow
support opportunities in four areas
B2B GTECH
MARKET SEGMENT
B2C LOTTOMATICA
Continue to build and accelerate same store sales
growth
Traditional and Instant Lottery (77)1
Win new jurisdictions
Grow instant ticket printing capabilities
Pursue Gratta e Vinci model in other European
countries
Leverage technology capabilities in VLT and
traditional carriers
Play a relevant role in Consolidation of Italian
market
Refresh/expand Atronic content offerings
Gaming Solutions (9)1
Utilize server-based gaming (SBG) capabilities
Leverage on Better experience to build a
presence as Operator in other European countries
Grow presence in this fast-expanding market as
Service Provider
Sports Betting (8)1
Provide platforms and services to operators in
fast-growing market segment
Exploit full potential of interactive channels in
Italy according to new regulation
Interactive (2)1
(1) Weight as a of Group consolidated revenue
in 1H2008 Commercial services revenue weight
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Interactive Strategy
Strategic Rationale

• BOSS MEDIA
• Leading OEM network provider gives GTECH
  immediate access to a Top 10 poker network (IPN)
  and the potential to leverage technology,
  services and liquidity to provide
  Multi-Jurisdictional Network Games, i.e., Poker,
  Bingo
• Domain expertise and credibility within
  Interactive space, specifically Poker, Casino and
  other P2P games
• Strong, scalable presence in WLA market as well
  as Commercial market
• Expands Bosss reach into emerging customer bases
  through access to GTECH/WLA relationships and
  Finsoft
• Potential for synergies through content
  development/RD
• ST. MINVER
• Leading provider of White-Label gaming services
  to blue-chip media brands
• Close affiliation with Boss Media through
  provision of network services and SW platform(s)
  creates opportunity for significant synergies
• Domain expertise and credibility within
  Interactive space across all target markets (WLA,
  Commercial OGOs, Media Brands)

up to 100
White-Label Proposition
Revenue share of rake in commercial market
1-5
10-20
up to 40
up to 60

• Technology
• Player account
• Gaming control
• Risk/event management
• ERM/CRM

• Marketing Support
• Affiliates / Channels

• Advanced Service
• Player liquidity
• Event/risk management
• Responsible gaming
• Fraud Collusion
• ERM/CRM
• Sports services
• Information Services

• Games
• Lotto/number games
• Poker
• Bingo
• Casino
• Instant games
• Sports betting
• Live Betting

• Operator
• Operations
• Licensing
• Brand
• Marketing
• Customer ownership

Value chain
GTECH at present
Some WLA-member operators at present
GTECH
Finsoft
Boss Media
St Minver
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Market Environment
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The Gaming Industry

• Attractive Fundamentals
• Constant growth in global gaming market and
  lottery sales
• Substantial opportunities to be captured
  Approximately 65 of worlds addressable
  population not currently served by online
  lottery(1)
• Insulated from negative economic conditions
  Governments increase marketing and introduce new
  products/games to balance budgets in weaker
  economic times
• Strong Barriers to Entry
• Long-term government/customer relationships
• Licensing/disclosure requirements
• Technical conversion risk

(1) Management estimates
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GTECHS Core Business Provides Stable Cash Flow

• Recurring annual lottery service revenue of
  approximately 600M
• Stable and visible revenues
• Weighted average lottery contract length of
  approximately 6.0 years(2)
• Approximately 90 of total service revenues under
  contract for more than two years
• Approximately 60 of aggregate revenues under
  contract for at least four years
• Strong Government reliance on lottery proceeds
• Approximately 30 of every wager goes directly to
  Governments

Service Revenues by Renewal Date
(1) Figures represent proportion of historical
revenues for which the underlying contracts are
expected to expire within the periods stated.
(2) Analysis assumes all extension options are
exercised. GTECHs revenues converted at the
CY08 Outlook exchange rate USD/EUR of 1.50.
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Significant Opportunity for Growth in US Lottery
Markets

• Opportunity for Best Practices drive per capita
  growth
• Massachusetts leads the US in per capita sales,
  fueled by high percentage payouts and retail
  distribution
• Georgia and New York are second and third in per
  capita sales due to a strong game portfolio,
  retail distribution and a well-balanced payout
  percentage
• Adoption of Best Practices by GTECH customers
  could drive substantial growth similar to GA and
  NY

Potential Additional GTECH Annual Revenue (Based
upon Average of GA and NY Best Practices)
2007 Weekly Per Capita Sales
M
9-10BN
4-5BN
1-3BN
110-130
100-120
15-20
Incremental gross sales potential
Source GTECH Lottery Marketing Database
GTECHs US customers have significant room to
drive growth, based upon execution of best
practices and other factors
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Interactive Gaming Markets
High-Growth Interactive Gaming Segment
Global Interactive Gaming Market GGY 1998 to 2012E
CAGR 11.1
28.2

• Interactive Lottery market expected to double in
  five years
• Fast-growing Multiplayer games
• Europe and Asia critical to scale and growth,
  given regulatory issues in the US
• Our core customer segment (lotteries) expected to
  be significant growth driver of interactive gaming

16.6
6.7
5-Year CAGRs (2007-12)
7.1
14.6
Lotteries Poker Casino Bingo Skill games
Source GBGC (Oct 2007)
Our strategic investments in new acquisitions
position us well to take advantage of the
fast-growing interactive gaming market
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China Opportunity
Substantial opportunity to participate in growing
Chinese lottery market

• Lottery highly regulated under Ministry of
  Finance two national bodies
• China Welfare Lottery Issuance Centre (CWLC)
• China Sports Lottery Administration Centre (CSLA)
• Retail market substantially under-penetrated
  150K POS among 1.4 billion individuals
• Assuming 1 POS per 2,000 persons, potential POS
  penetration of 700K plus 550K
• Market expected to grow at healthy pace driven by
  expanding sales network and the introduction of
  new games
• Substantial opportunity to convert non-regulated
  market to regulated
• Current GTECH market position
• Online systems in Beijing and Guangdong
• Recent joint venture with China LotSynergy for
  development of nationwide KENO system for CWLC

CHINA LOTTERY MARKET
0710 CAGR
31.7
39.5
26.6
Source IDC (Jan. 2007)
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Italian Regulatory Model
Licenses for game operations based on two
competitive models with regulatory oversight
focused on gaming rules and market monitoring
EXCLUSIVE CONCESSIONAIRE (Lotteries)
MULTI-PROVIDER CONCESSIONAIRE (Other Games)
Lotto Instant lotteries SuperEnalotto
Sports Betting and Pools Horse-race Betting and
Pools Gaming machines Bingo
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Growing Italian Market
2001 2007 Wagers Trend
Key Market Drivers

• Exceptional market growth mainly driven by
  innovation and portfolio expansion
• Gaming Machines wagers reached 18.8B due to
  legalization process
• Scratch and Win continued increase in consumer
  penetration 8B wagers
• Sports Betting grew by 29 (CAGR) in last two
  years
• Numerical Lotteries maintained their positions

Source AAMS / Lottomatica
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The Italian Gaming Market in Europe

• Italy is one of the most penetrated gaming
  markets in Europe, representing a unique balance
  between a regulated model and a
  highly-transparent, competitive environment
• More than 100 authorized concessionaires
• Nine major international players
• 25M consumers

Lottery - avg spend per capita
Betting - avg spend per capita
/year
/year
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Italy ScratchWin and Lotto
Gratta e Vinci today is the most popular game in
Italy (more than 14M consumers) and the first
Instant Lottery in the world (8BN wagers) Lotto
is among the top-performing Numerical Lotteries
in the world, despite the strong growth of Gratta
e Vinci and other emerging games
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Italy Betting and Gaming Machines
Sports Betting Lottomatica quickly reached
overall a solid second position in this growing
market, while being the largest operator in the
new network Gaming Machines in 2007 started an
aggressive growth plan to play a leading role
in this
market consolidation process
June 2008 Betting Total Market
Gaming Machines Wagers and Market Share
June 2008 Betting New Network
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Financials 1H08 and
Guidance
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Financial Highlights 1H08
Revenues
EBITDA
16
10
11
5
Margin 45.6 43.0
43.0

• Top line growth in Italy of 27 driven by Sports
  betting, Gaming solutions and Scratch Win
• B2B Lottery same store revenue growth of 4,
  strategic extensions in California and Ireland
• Steady 43 EBITDA margin reflects fast-growing
  businesses contribution

Note / FX average 1.33 in 1H07 1.54 in
1H08
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Cash Position 1H08

• Healthy unlevered free cash flow before
  acquisitions of 90M, increasing 16M versus
  comparable 2007 data
• Solid cash position of 155M having already
  completed the majority of the acquisition plan
  for 08, paid dividends, taxes and repurchased
  shares for 1.4 of outstanding capital

• 2.1M shares
• 18.24 avg. price

(1)

• Net Financial Position as of June 30 of 2,670M
  (2,229 as of December 31, 2007) includes
  completed acquisitions of 205M and Atronic debt
  consolidation of 135M

Figures in M
Note (1) Net of the escrow payment of 40
million for Totosi acquisition
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Gross Long-Term Debt

• 2.5x Net Debt/EBITDA Ratio Target in 2010
  (adjusted for Hybrid, Net Debt / EBITDA Ratio
  1.75)
• Group committed to maintaining financial
  discipline (SP BBB- stable, Moodys Baa3 stable)

Figures in M
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Key Financial Policies

• Capital structure
• Maintain investment grade rating
• Preserve optimal weighted average cost of capital
• Maintain sufficient financial flexibility to
  pursue growth
• Free cash flow deployment priorities
• Investments in existing business
• Scheduled debt repayments
• Dividend policy
• Share repurchase program
• Disciplined approach to capital allocation
• Investments must be consistent with Corporate
  Strategy of maximizing value
• Acceptable level of return risk adjusted hurdle
  rate spread

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2008 -2010 Guidance
Figures in M

• FCF unlevered pre-acquisitions, pre-dividends and
  pre-debt amortization. 2007 pre-Polcard proceeds
• Pro-forma

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Contacts
Lottomatica Group web site http//www.gruppolottom
atica.it/eng/index.htm Investor Relations
Office ir_at_lottomatica.it Lottomatica
S.p.A Viale del Campo Boario, 56d 00154
Roma Italy
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Backup BP 2008-2010
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Key Assumptions
Lottomatica Drivers
GTECH Drivers

• Lottery
• Lotto steady
• SW low single-digit growth
• Sports Betting
• Maintain market share in a growing market
• Gaming Solutions
• Wagers to top 3.5BN by 2010
• Commercial Services
• Approximately 80M by 2010

• Lottery
• Same store sales growth of 56
• Maintain existing contracts one new small
  contract, one medium
• Gaming Solutions
• Expansion in participation markets. Peak of
  replacement cycle in North America in 2010.
• Interactive and Sports Betting
• Growing to 90M by 2010

Other Drivers

• Capex
• Maintenance capital approximately 5 of annual
  revenues
• Growth capital approximately 3 of annual
  revenues
• Maintain competitive dividend policy
• 1 1.50

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USD Sensitivity

• 2007-2010 Business Plan _at_ USD/ 1.50

• Approximately 30 of USD denominated Revenues
• Depreciation of USD has a positive impact on Net
  Income

US/ Revenues EBITDA Net Income 1.55 -1.1
-0.9 1.3 1.60 -2.1 -1.8 2.6
Note change compared to 2008 base case _at_ USD/
1.50
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2007 - 2010 Revenue Targeted Growth

• Revenue CAGR between 9 and 11 leveraging organic
  growth and new business development opportunities

2,400 - 2,500
200 230
350 - 420
1,850
Reported 1,661M Acquisitions 211M
Disposals (22)M --------- 1,850M
Note Includes 216 M aggregated 07 revenues
(of which 5M already consolidated in 07 by
LTO) from newly-acquired companies (Finsoft,
Atronic, Boss Media, St Minver)
Figures in million
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2007 - 2010 Solid EBITDA Profitability

• EBITDA CAGR between 8 and 10, maintaining high
  margins in traditional markets and developing new
  business
• Limited price pressure and costs streamlining

65 75
900 - 935
120 - 145
716
Reported 702M Acquisitions 25M Disposals
(11)M --------- 716M
Note Includes 25M aggregated 07 EBITDA from
newly-acquired companies (Finsoft, Atronic, Boss
Media, St Minver)
Figures in million
36
2008 2010 Cash Flow
Plan focused on allocating cash flows to
selected investment opportunities and create
return to shareholders
Figures in million
1,950 2,000
900 - 950
Including 250-300M Acquisitions
470 - 580
520 - 530
OCF
Capex
Net interest
Levered Cash Flow
Note OCF, Operating Cash Flow after change in
NWC Acquisitions newly-acquired companies
(Finsoft, Atronic, Boss Media, St Minver)