It said it has been pursuing a deal to lead the Italian market “for some time”, further tapping into the country’s £16 billion gaming sector, which is the second largest regulated gambling market in Europe after the UK.
Sisal is the top online gaming group in Italy, with 300,000 average monthly online players and more than 9.5 million retail customers.
It employs around 2,500 people and is expected to post underlying earnings of £211 million for 2021.
Flutter said the deal is set to close in the second quarter of 2022.
Peter Jackson, Flutter chief executive, said the deal will give it a “gold medal position in the Italian market”.
He said: “For some time we have wanted to pursue this market opportunity via an omni-channel strategy and this acquisition will ideally position us to do so.”
Around 90% of Sisal’s annual earnings are made in Italy, with the remainder coming from regulated lottery operations in Turkey and Morocco.