Entain's current success: Overseas revenue growth offsets UK decline

Entain experienced a 6% growth in net gaming revenue (NGR) during the first half of the year, driven by increases in Central and Eastern Europe (CEE) and international markets, which compensated for declines in the UK and Ireland. The company's NGR for the period reached £2.56 billion (€2.97 billion/$3.25 billion), excluding revenues from its US operations, which pertain to its 50% ownership in BetMGM, a joint venture with MGM Resorts International. Of the total, £1.79 billion was generated from online operations, reflecting a 9% year-on-year increase. Additionally, retail revenues from operations in the UK, Italy, Belgium, Croatia, New Zealand, and Ireland saw a slight rise of 1%, totalling £735.6 million. "The results from the first half demonstrate that our efforts to enhance the group's operating performance are yielding positive results," stated acting CEO Stella David.

Legislation changes hit Entain NGR in UK and Ireland

Starting with the UK and Ireland, NGR decreased by 6% to £1.00 billion. Gambling revenue declined by 7% to £611.2 million, and sports betting revenue dropped by 5% to £393.5 million, accompanied by a 10% reduction in wagers. Entain attributed this decline to changes in UK legislation last year, following the review of the Gambling Act, especially impacting the online sector where revenues fell by 8%. The company previously indicated that this sector would likely represent less than 1% of total group NGR in 2024. 

Nevertheless, the group expressed confidence in achieving online NGR growth by year-end, driven by enhancements to the bookmaker user experience and a new management team. Retail revenues also saw a 3% decline, which Entain noted was within expectations and related to the timing of its rebranding efforts, set to complete in the third quarter.

Central and Eastern Europe generated 126% more revenue

Expanding into continental Europe, Entain's joint venture in Central and Eastern Europe with Czech investors Emma Capital has significantly boosted the company's overall growth through mergers and acquisitions. In the first half of the year, revenue reached £240.9 million, marking a remarkable 126% increase compared to the previous year. This impressive revenue performance was bolstered by the acquisitions of STS in Poland and Croatia's SuperSport in 2023.

Sports betting remains Entain's primary focus in the CEE region, with revenue soaring by 213% to £181.5 million, while gaming revenue also saw a 22% increase. Online betting revenue surged by 130%, and retail revenue rose by 107%.

Breaking down the results by country, Entain highlighted the positive effects of its new live-streaming app and statistics centre in Croatia, where Supersport is based. Furthermore, the company has introduced new self-service betting terminals (SSBTs) and launched the SuperSpin rewards tool.

In Poland, Entain expressed satisfaction with the progress of STS, especially in light of the intensifying competition in the market.

Brazil stands out in international business Entain

In its international operations, NGR rose by 7% to £1.29 billion, driven by growth in both sports betting and gaming sectors. Entain also reported revenue increases in both online and retail channels.

The group demonstrated a solid underlying performance across all major markets except for Italy, where NGR fell as customer results only partially mitigated the declines in both online and retail. Additionally, revenue in New Zealand, where Entain runs Tab NZ under a long-term agreement, as well as in the Netherlands , experienced decreases.

With the launch of the regulated market in Brazil, Entain's activities in the country are picking up steam. Notable improvements in customer acquisition and retention, coupled with higher deposit and withdrawal volumes, resulted in a year-on-year NGR growth of 28%. In other regions, the Baltics and Nordics also reported year-on-year NGR increases, while Australia remained stable. In Georgia, where the operator plans to divest its Crystalbet business, revenue saw an uptick in the first half of the year.

BetMGM: first half of the year results

Entain did not report revenue from its stake in BetMGM as part of its results. However, it did note that BetMGM’s net revenue “accelerated” in the first half of the year, with market share at 13%.

BetMGM reported its results separately last week. The company said net revenue was $1 billion, driven by Angstrom’s product capabilities and the use of omnichannel capabilities across MGM.

“We are pleased to see our investment and customer experience at BetMGM gain momentum, giving us confidence in improving year-over-year revenue growth in the second half of 2024 and into 2025,” Entain said in its half-year results.

“BetMGM has a number of exciting opportunities ahead, reinforcing our confidence in BetMGM’s strong future.”

Net loss and Turkish debts

In summary, Entain experienced a higher cost of sales in the first half of the year, leading to an operating profit of £120.7 million— a notable recovery from last year's £377.9 million loss. This improvement was largely attributed to a £585 million provision established to address a dispute with HM Revenue and Customs regarding its Turkish operations. However, Entain's investments in joint ventures and affiliated companies, including BetMGM and Entain CEE, recorded a loss of £57.3 million, reducing the operating profit to £63.4 million. After factoring in non-operating items, the loss before tax stood at £27.6 million, a marked improvement from the previous year's £448.1 million loss. The company paid £19.3 million in taxes, resulting in a net loss of £46.9 million, compared to £506.2 million the year before, while group EBITDA increased by 5% to £524.0 million.

High hopes for fiscal year 2024

On the bottom line, Entain's cost of sales was higher in the first half of the year, resulting in an operating profit of £120.7m, a significant improvement on the £377.9m loss last year. This was due to a £585m provision set aside to resolve a dispute with HM Revenue and Customs over its operations in Turkey. Entain's stake in joint ventures and associated companies such as BetMGM and Entain CEE made a loss of £57.3 million, leaving operating profit down to £63.4 million. After deducting non-operating items, the loss before tax was £27.6 million, again an improvement on the £448.1 million loss last year. Entain paid £19.3 million in tax, leaving a net loss of £46.9 million, down from £506.2 million last year, while group EBITDA also rose 5% to £524.0 million.

Entain is waiting for Isaacs

Stella David seized the opportunity to introduce Gavin Isaacs as the newly appointed CEO of Entain. Isaacs, who took on the role last month, will officially step into the position at the start of September. He brings a wealth of experience from the industry, having held prominent positions such as President and CEO of Scientific Games, as well as serving on the board of DraftKings and as Chairman of SBTech. 

David has been acting as interim CEO since Jett Nygaard-Andersen's departure late last year. "I am eager to welcome Gavin Isaacs as our new CEO and to support him as we strive to enhance the operational momentum of the group," stated David. In response to Entain's results, the market has reacted positively, with shares climbing 8.9% this morning in London to reach 570.00 pence per share.