UPDATE 1-Intralot 2008 net falls 55.3 pct, lags forecasts

* Says hit by writedowns and provisions of 40.8 mln euros

* Sales up 28.9 percent to 1.07 bln euros

* To propose 0.22 euro dividend per share

(Adds details)

ATHENS, March 30 (Reuters) - Greek lottery systems supplier Intralot (INLr.AT) said on Monday its 2008 net profit dropped 55.3 percent, below market expectations, as the firm took provisions for high start-up costs in new markets.

The world's second-largest lottery systems provider said net profit came in at 50.1 million euros versus an average forecast of 94.6 million euros in a recent Reuters poll.

Intralot said it booked writedowns and provisions of 40.8 million euros related to investments and new projects around the world.

Excluding the provisions, net profit dropped 19 percent to 90.9 million euros.

It said the bottom line was also hurt by the depreciation of local currencies in its markets due to the financial crisis.

The firm will propose a dividend of 0.22 euros a share and said it was closely looking into opportunities for mergers and acquisitions around the world as governments were trying to combat illegal betting and boost public revenues. Last year the company paid a dividend of 0.33 euros a share.

In a bid to capitalise on the liberalisation of world gaming markets, Intralot has started sports betting and lottery operations in Spain, Italy and the Australian state of Victoria in the last two years.

Sales rose 28.9 percent to 1.07 billion euros, thanks to expansion in Italy and robust sports betting business in Turkey, Bulgaria and Romania on the back of last summer's European Soccer Cup.

Intralot's shares trade 6 times estimated 2008 earnings, against a multiple of 14-times for Lottomatica (LTO.MI) and 15 times for Scientific Games (SGMS.O), data from Reuters Estimates showed.

Analysts are concerned a deepening global economic downturn will hit sports betting and pile on foreign-exchange losses this year as well.

The stock has gained 29 percent since the start of the year, outperforming the broader Greek market index .ATG, which has dropped 6.4 percent.

The share closed down 6.98 percent on Monday, before the results were announced, compared with a 2.52 percent fall by the Greek market index. (Reporting by Angeliki Koutantou; Editing by Hans Peters)