The bookmaker behind Sky Bet and Paddy Power has swooped an contender to run the National Lottery, handing it an outside chance of snaring the UK’s most lucrative public sector contract.  

Flutter Entertainment agreed to buy Italian group Sisal in a deal worth £1.6bn from CVC Partners, the private equity firm that owns stakes in Premiership rugby, the Six Nations and previously Formula 1.

Sisal is one of four operators in the running for the next National Lottery licence. The Gambling Commission will announce the victor in the spring.

The 10-year licence, which begins in 2024, could generate revenue of up to £100bn.

However, the Flutter boss, Peter Jackson, sought to play down Sisal’s chances of beating incumbent Camelot or Czech oligarch Karel Komarek – the two favourites – to the prize.

“We are definitely obtaining new capabilities in the Lottery,” he said. “But [Sisal’s] bid for the National Lottery is not part of the rationale for this deal. It is not something that we have spent a lot of time trying to assess. It wasn’t a consideration really.”

A spokesman for Sisal said: “We absolutely remain committed to our participation in the competition for the fourth National Lottery licence.”

Flutter’s deal to buy Sisal is the second acquisition in a matter of weeks after buying bingo operator Tombola for £402m last month.

Mr Jackson is under pressure to arrest a fall in Flutter’s share price. The stock has lost a quarter of its value this year as a legal row with Rupert Murdoch’s Fox Bet threatens to overshadow its market leading position in the US.

The spat centres on the price that Mr Murdoch is entitled to pay to buy a fifth of FanDuel, Flutter’s American brand.

Mr Jackson had hoped to float a minority stake in FanDuel earlier this year in the US, but has since delayed the plans until 2022. He has insisted that the row with Mr Murdoch has had no bearing on the delay of FanDuel’s float.