SBC News Voice of the Sports Betting Industry
Entain Plc remains focused on accelerating operational efficiency, aiming to return its business to growth by 2025.
Publishing its Q1 2024 trading update, the FTSE100 gambling group stated that its “performance aligned with expectations,” with leadership prioritising operational performance improvements to drive organic growth.
Period trading saw group net gaming revenues (NGR), including the BetMGM JV, increase by 6% on a constant currency basis. However, Q1 NGR results declined by 3% on a proforma context.
Further headline results saw group proforma online NGR (excluding BetMGM) decrease by 2%, despite an 11% growth in active customers during the period.
A regional breakdown revealed mixed results across key operating markets such as the UK & Ireland, Western Europe, Central Eastern Europe (CEE), South America, and Australia.
The FTSE firm’s home market of the UK & Ireland continues to underperform, with NGR decreasing by 7% due to regulatory changes affecting both online and retail sectors.
Despite no home comforts, Entain maintains an optimistic view of UK growth, citing stabilisation in response to regulatory adjustments.
The international segment registered an 8% increase in Net Gaming Revenue (NGR), but a 2% decline on a proforma basis, with the overall positive performance being mitigated by continued challenges in Australia, the Netherlands, and Germany.
However, Entain’s international outlook is improved by Brazil, which experienced significant growth due to operational improvements, while growth in Italy was constrained by customer-friendly sports margins.
Excluding US results, Entain underscored the performance of its CEE unit, which achieved an 11% NGR increase, reflecting strong growth in Croatia.
In US trading, BetMGM netted a 2% increase in NGR, as Entain claims “a 14% market share in sports betting and iGaming, in the markets where it operates”.
Entain detailed that BetMGM’s growth was “impacted by customer-friendly win margins. Adjusting for sports margin impacts, NGR could have shown a high single-digit increase”.
BetMGM achieved significant growth in customer acquisition, propelled by major events like the Super Bowl and March Madness, and focused on enhancing the player experience and product capabilities.
Interim CEO Stella David stated management was satisfied with Q1 results, effectively addressing its challenges.
“Our Q1 performance was in line with our expectations, with growth reflecting both strong performances in many of our markets as well as known challenges in others. We are particularly encouraged by the level of customer engagement in the US following a successful Super Bowl and March Madness, as well as our return to growth in Brazil following the changes we implemented.”
“There is more to be done, yet the team is fully committed to delivering operational improvements and product enhancements, while increasing organisational agility and efficiency. We look forward to building on this momentum as we focus on our strategic priorities of organic revenue growth, margin expansion, and winning in the U.S. We remain confident that our continued focused execution will drive organic growth into 2025 and beyond.”
Further developments will see Entain enter a transformative period, as the board has established a Capital Allocation Committee (CAC) to evaluate the FTSE100 firm’s brand portfolio, corporate funding, and operating structures.
To conclude Q1 trading, the FTSE100 group announced that Chairman Barry Gibson will resign from all corporate governance duties by the end of September 2024.
