Entain pledges UKI return to growth as BetMGM undertakes Romer upgrades

Entain Plc views an accelerated return to online growth for its UK & Ireland business as a core objective in the FTSE100 gambling group’s financial recovery.

This morning, the board of Entain issued a ‘strategic update’ on H2 trading, as new CEO Gavin Isaacs takes leadership of the FTSE firm, with the corporate objective of returning the company to growth, stability, and shareholder value.

During this leadership transition, Interim CEO Stella David will work alongside Isaacs until the planned departure of Barry Gibson as Entain Chairman on 30 September 2024.

September is seen as a critical month for its ‘Project Romer’ tech directives, as the US joint venture BetMGM will launch its new sports betting offering ahead of the 2024 NFL season.

In the US, the BetMGM JV will provide a “new sportsbook experience” with “enhanced parlay and player prop offerings powered by Angstrom.” These tech upgrades aim to differentiate BetMGM’s market pricing capabilities, as well as introduce new streamlined live betting and bet slip features.

A strengthened outlook is provided for BetMGM as “the first sports betting app to offer Nevada bettors seamless, nationwide connectivity through a single digital wallet.”

At home, Entain cites that its “focused execution is bearing fruit across our operational performances,” turning around the stagnant financial performance of its UKI online business.

Unsatisfactory H1 results saw Entain’s UKI online unit register an 8% decline in revenues to £466m, alongside a 25% drop in underlying EBITDA to £87m. Citing continued adjustments to the “UK player journeys,” Entain noted matching 8% revenue declines in UKI online casino and sports betting, as the segment recorded no growth across financial metrics.

Leadership notes that retail performance remains in line with expectations; however, UK & Ireland online performance has been prioritised as a segment that must return to growth.

Early H2 trading indicates that “UK & Ireland Online returned to YoY growth earlier than expected,” with Entain brands tracking an “accelerated recovery across gaming and sports, with sports NGR benefiting from both stronger volumes and margins.”

Elsewhere, strengthen by the combination of SuperSport and STS Group, Entain’s International and CEE unit continue to perform above expectations.

Despite stunted UKI growth, Entain maintains its upgrade its full-year EBITDA guidance, expected to be in the range of £1,040m-£1,090m.

Gavin Isaacs has yet to provide his first statement as CEO. Entain will provide details on the period’s trading performance and outlook for the year Q3 update on 17 October 2024.