SBC News Voice of the Sports Betting Industry
Entain Plc’s trading momentum has dragged amid a tougher regulatory backdrop and a weaker macroeconomic environment reducing customer spend.
The bellwether for online gambling PLCs this morning published a snapshot interim 2022 trading update, which saw the FTSE100 group maintain NGR growth of 18%.
Group growth was attributed to robust retail trading as Ladbrokes Coral and Eurobet Italia units recorded a 243% NGR increase – continuing Entain’s post-COVID retail recovery by delivering results ‘above corporate expectations’.
Despite Entain’s positive retail results, concerns will be centred on the group’s enlarged online gambling division which registered a 7% NGR decline during the first half of year trading.
Entain, which had previously warned investors of ‘changing macro dynamics’ during its Q1 update, registered a like-for-like 7% NGR decline during Q2.
A breakdown of the group’s online segment’s H1 performance, saw Entain sports betting unit register a 6% decrease in NGR. A bleak H1 trading period was further compounded by a 7% NGR drop, registered by the group’s online gaming unit.
Entain cited several ongoing circumstances impacting its online momentum, including – “tough 2021 comparators driven by COVID lockdowns, closure in the Netherlands ahead of licensing and the implementation of tighter affordability measures in the UK”.
“The macro-economic outlook is uncertain, however the underlying performance of our business remains strong, “ said Group CEO Jette Nygaard-Andersen.
“With an increasingly recreational customer base and relatively resilient revenue, we remain confident that our customer focus, diversification and proven ability to grow both organically and through M&A will enable us to deliver further progress against our strategy.”
Facing continued headwinds impacting its headline performance, Entain cited that underlying group KPIs ‘remained strong‘ – as the business continues to broaden its customer base with record levels of activities recorded during Q2 (+60%).
Of further significance, Entain’s European online gambling portfolio will shortly be refreshed by the addition of BetCity.nl – the Netherlands regulated market’s current leading igaming operator – a new asset which is expected to be integrated during H2 trading.
In the US, its BetMGM joint-venture has rubber-stamped its position as the market’s second-biggest operator with 24% of market share (excluding New York).
Entain leadership maintains BetMGM’s hard targets of generating an FY2022 NGR of over $1.3bn, alongside the reiterated goal to declare positive EBITDA trading results during 2023
Closing its update, Entain detailed its 2022 full-year guidance, in which the group anticipates delivering ‘flat results’ on its online NGR based on current outlook and excluding the pending impacts of the UK government’s upcoming gambling review.
“I am very pleased to see that more customers are choosing to play with us, reflecting our focus on recreational players and putting the customer at the heart of everything we do,” Nygaard-Andersen concluded.
“We continue to expand our growth opportunities through complementary acquisitions with four transactions so far this year. Underpinned by the Entain Platform, BetMGM continues to demonstrate its leadership in the US with a 24%2,3 market share.”
