STOCKS NEWS EUROPE-Lottomatica down on scratch card tender

Italian gaming company Lottomatica SpA (LTO.MI) shares are down 6 percent after a report on Friday that the government is putting out to tender the concession for Italy's scratch-and-win cards rather than reappoint holder Lottomatica.

There had been speculation that Lottomatica would keep the concession after its May 31, 2010 expiry after a recent top administrative court legal opinion giving scope for Italy's AAMS gaming regulator to award the concession without a new tender.

"The government most probably has decided for bidding. Before there was speculation of a renewal with Lottomatica without bidding. On top of that there will be the possibility of multiple operators," a broker says.

Lottomatica currently is earning a scratch card margin above the maximum proposed by the government for new operators, he says.

Citigroup maintains its "sell" rating on the stock saying "we think that investor appetite and upside for Lottomatica's stock might be somewhat capped" by the government's plan. For more double click on [ID:nLQ889209]

Reuters Messaging rm://nigel.tutt.reuters.com@reuters.net