Growth in Central and Eastern Europe and International Markets Offsets UK and Ireland Decline for Entain in H1
Date: 2024-08-09 Author: Robert Beloved Categories: PAYMENT SOLUTIONS
The company’s NGR reached £2.56 billion (€2.97 billion/$3.25 billion) in the first half of the year. This excludes operations in the US, where the company owns a 50% stake in BetMGM, a joint venture with MGM Resorts International.
Of this, £1.79 billion came from online operations, up 9% year-on-year. The company also reported a modest increase in retail revenue, up 1% to £735.6 million. This revenue came from operations in the UK, Italy, Belgium, Croatia, New Zealand and Ireland.
However, when comparing the results in constant currency, online NGR increased by just 1%, while retail sales decreased by 4%. Despite this, the figures were an improvement on the first quarter, when they decreased by 2% and 5% respectively.
Impact of regulation on revenues in the UK and Ireland
In the UK and Ireland, NGR decreased by 6% to £1.00 billion. Gaming NGR decreased by 7% to £611.2 million, while sports betting decreased by 5% to £393.5 million, driven by a 10% drop in bets. The main decline in bets was seen in online sports betting, which fell by 17%, while retail betting decreased by 3%.
The company noted that the decline in revenue was due to changes in gambling regulation in the UK following the review of the gambling law. This particularly affected online activity in the region, where revenues fell by 8%. Last year, Entain forecast that its impact on overall group NGR in 2024 would be less than 1%.
Despite this, the company is confident of achieving online NGR growth by the end of the year, thanks to an improved user experience and a new management team.
Growth in CEE and international markets
In Central and Eastern Europe, Entain’s joint venture with Czech investors Emma Capital delivered positive results thanks to M&A. Revenues in the first half of the year grew 126% to £240.9 million, driven by the acquisitions of STS in Poland and SuperSport in Croatia in 2023.
Sports betting was the main focus in CEE, with revenues up 213% to £181.5 million, while gaming revenues grew 22%. Online revenues increased 130%, while retail revenues increased 107%.
International Markets
International markets saw NGR increase by 7% to £1.29 billion, with Brazil standing out, where revenues grew by 28%, driven by improved customer acquisition and retention, as well as higher deposit and withdrawal volumes. While revenues fell in Italy and New Zealand, the Baltics and Nordics saw growth, and revenues were flat in Australia.
Outlook and new CEO
Despite the overall loss, the improved operating results have led to an increase in 2024 guidance. Entain expects online NGR growth to be in the low single digits on an ongoing basis, with EBITDA in the range of £1.04 billion to £1.09 billion.
New CEO Gavin Isaacs, who takes over in September, will continue the operational improvements laid out by interim CEO Stella David, who will become chair at the end of September.
