Entain, a leading online gaming company, has reported mixed online net gaming revenue (NGR) across the group in recent weeks. Despite expectations of growth during Q3, Entain anticipates softer growth than initially anticipated, with third-quarter online NGR projected to rise by a high single-digit percentage. However, on a pro forma basis, it is expected to decline by a high single-digit percentage. This is primarily due to adverse sports results impacting sports margins, slower growth in Australia and Italy, the impact of safer gambling measures, and ongoing regulatory challenges in the UK.
On the positive side, Entain highlights growth drivers within its online business, including strong pro forma growth in active customers, a robust performance in retail, and the continued success of BetMGM in the US. Recent acquisitions, such as SuperSport in Croatia and Polish sportsbook operator STS Holding, have also contributed to the company’s performance.
Despite the softer revenue growth in the online segment, Entain remains confident in achieving its EBITDA guidance for the full year of £1.00bn to £1.05bn. CEO Jette Nygaard-Andersen emphasizes the company’s good underlying growth in the online business and the ongoing implementation of safer gambling measures.
In an effort to drive sustainable organic growth and enhance margins, Entain is undergoing a significant strategic transformation. The company aims to simplify its structures and operations, optimize capital allocation, and achieve an online EBITDA margin of 30%. Further details on this strategy will be provided in a trading update on 2 November.
Entain has achieved record results in the first half of the year, with net gaming revenue reaching £2.40bn, driven by a record number of active online players in Q2. Online revenue amounted to £1.68bn, representing a significant increase compared to the previous year. Retail revenue also experienced growth, attributed in part to the lifting of Covid restrictions.
Alongside the H1 results, Entain disclosed a provision of £585m related to deferred prosecution agreement (DPA) negotiations with the Crown Prosecution Service (CPS) concerning its past activities in Turkey. The settlement amount is expected to be paid over a four-year period, pending judicial approval in Q4 2023.
