Lottery and gaming operator Allwyn reported a 27% increase in second-quarter net revenue to 1.246 billion euros, driven by strong digital growth and the addition of North American platform PrizePicks.
The group's adjusted EBITDA rose 29% to 458 million euros, with its profit margin increasing to 36.8% from 36.3%. Allwyn maintained its 2026 forecast for net revenue growth of more than 25% and an EBITDA margin of around 37%.
Allwyn is a multinational lottery and gaming operator, formerly known in the Greek market primarily through its stake in OPAP. The group has recently expanded into a larger, more digital enterprise with a significant footprint in the United States and higher associated borrowing.
Underlying growth and adjustments
While reported net revenue grew 27%, underlying net revenue increased by 5% when excluding PrizePicks and correcting for the negative impact of higher Austrian gaming taxes.
Gross gaming revenue rose 6% to 2.286 billion euros. However, gaming taxes and community contributions fell from 1.262 billion to 1.130 billion euros, dropping from 58.6% of gross gaming revenue to 49.4%. This allowed a 131 million euro increase in gross revenue to translate into a 267 million euro rise in net revenue.
The company's adjusted EBITDA of 458 million euros included 97 million euros of adjustments compared to its operating EBITDA of 361 million euros. These consisted of 61 million euros at the corporate level, largely for the global brand and transactions, and 33 million euros in North America for transaction costs, staff incentives, and legal settlements.
Compared to the 355 million euros in EBITDA recorded in the second quarter of 2025, higher Austrian taxes cost 13 million euros, while increased amortization for the renewed LottoItalia license cost 9 million euros. Other operations added 31 million euros of organic growth, or about 9%, while PrizePicks contributed 94 million euros.
Digital shift and North America
Online operations now account for more than half of Allwyn's gaming revenue. Online net gaming revenue jumped 81% to 596 million euros, up from 330 million euros.
Online play now represents 52% of total gaming net revenue, compared to 37% a year earlier. In segments where digital play is an option, online participation increased to 58% from 44%.
In North America, PrizePicks saw total wagers rise more than 35%, with active users in June increasing by 18% and prediction market volumes up over 30% quarter-on-quarter.
Despite the volume increases, PrizePicks net revenue grew only 3% in constant currency, as the operator faced a tough comparison with favorable sports results in the previous year.
Allwyn increased its marketing spend in North America by 25 million euros. World Cup-related participation exceeded 26 million euros across June and July.
Including PrizePicks in both periods on a comparable basis, North American adjusted EBITDA fell 26% to 104 million euros from 141 million euros, shrinking the margin to 35.4% from 48.8%. EBITDA after capital expenditure fell from 136 million to 94 million euros. The company expects an easier year-on-year comparison for sports results in the second half of the year, alongside the start of the NFL, NHL, and NBA seasons.
UK turnaround and Continental Europe
In the United Kingdom, Allwyn reported that the 450 million pounds invested in the National Lottery's technological transformation is beginning to show returns.
UK net revenue rose 2% to 236 million euros, and gross gaming revenue fell 16%. However, adjusted EBITDA jumped from 6 million to 23 million euros, pushing the margin from 2.6% to 9.7%. EBITDA minus capital expenditure swung from a negative 31 million euros to a positive 10 million euros over twelve months.
UK capital expenditure dropped 65% to 13 million euros from 37 million euros. Allwyn stated that UK growth for 2026 will come in below its initial mid-to-high single-digit forecast, following the 2% growth in the first half. The July launch of Powerball in the UK has attracted more than 2.5 million players.
Continental Europe remains Allwyn's largest EBITDA generator. Net revenue increased 4% to 731 million euros, a figure the company said would have been 6% without the higher Austrian gaming taxes.
Adjusted EBITDA in the region fell 3% to 293 million euros, with the margin dropping to 40.1% from 43.2%, impacted by the Austrian taxes and the LottoItalia license amortization. Excluding those factors, Allwyn estimated a 4% increase in EBITDA. The second quarter was the final period in which the Austrian tax changes will affect the year-on-year comparison.
Betano continued to generate significant cash. On a 100% basis, Betano's revenue rose 26% to 972 million euros, and operating EBITDA increased 24% to 257 million euros. Allwyn's share of Betano's net profit dipped to 61 million from 63 million euros, affected by an exceptional charge and a tough year-on-year comparison. Betano distributed 351 million euros in the second quarter, of which 129 million went to Allwyn. First-half total distributions reached 551 million euros, a 57% increase.
Cash flow, debt and shares
Allwyn generated 398 million euros in free cash flow, up from 23 million euros a year earlier. The change included a 35 million euro addition from working capital, compared to a 261 million euro subtraction the previous year. Adjusted operating cash flows before working capital changes rose 14.5% to 411 million euros. Total capital expenditure fell 39%, while adjusted EBITDA after capital expenditure rose 43% to 420 million euros.
The quarter also saw major cash outflows, including 545 million euros for licenses and capital contributions, 583 million euros to shareholders, 456 million euros for exit rights, and 31 million euros for share buybacks. Total cash flows before new borrowing were a negative 1.257 billion euros.
Net borrowing, including leases, rose to 6.658 billion euros from 5.354 billion at the end of March. That equals 3.5 times the pro forma last-twelve-months adjusted EBITDA of 1.879 billion euros. The increased debt pushed adjusted financial expenses up 83% to 97 million euros, with interest paid nearly doubling to 71 million from 38 million euros.
The company maintains 1.114 billion euros in undrawn committed lines, an interest coverage ratio of 6.4 times, and an average debt maturity of 4.7 years. The company estimates second-half funding needs will be much lower, including about 150 million euros for an interim distribution and up to 119 million euros for the remaining buyback program.
Adjusted earnings per share were 0.24 euros, compared to a reported 0.07 euros. The adjusted figure is down 23% from 0.31 euros in the second quarter of 2025, though the comparison is skewed by the weighted average number of shares increasing from 358.6 million to 774.2 million following combination activities.
By August 21, Allwyn had repurchased 6,538,301 shares for 89 million euros at an average price of roughly 13.61 euros. The buyback program is capped at 150 million euros. The company's policy sets a minimum annual distribution of 1 euro per share, and it estimates total 2026 capital returns of 1.19 euros per share including buybacks.
Allwyn's market capitalization currently stands near 11.5 billion euros. Technical analysis from Apostolos Manthos suggests the stock must break through resistance at 14.42 euros to open a path toward 16.00 to 16.30 euros.
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