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Betting group Entain has upgraded its full-year revenue forecast after a boost from the Euro 2024 football tournament and delays to implementation of tougher gambling rules in several markets.
In results published on Thursday, the owner of brands including Ladbrokes and Coral said it expected group core profit in the range of £1.04bn to £1.09bn, compared with analysts’ consensus of £1.02bn, according to S&P Capital IQ.
It also forecast low single-digit growth in net online gaming revenue, against a previous forecast of a low single-digit fall in sales, driven by bets on the Euros and delays to new gambling rules in Brazil and the Netherlands. Shares in the company were up more than 7 per cent by mid-afternoon in London.
In addition to operations in the UK and Europe, Entain has a 50/50 online gaming and sports betting joint venture in the US with MGM Resorts. The JV, called BetMGM, is lossmaking.
Stella David, Entain’s interim chief executive, told the Financial Times that online sports betting in the US was “very much a work in progress for us, because it is very competitive, and we have lost market share”.
In sports betting, the company faces stiff competition from US market leaders DraftKings and Flutter-owned FanDuel. Last week, BetMGM changed its profitability target — it now expects to generate $500mn in core profit in “the coming years”, rather than 2026.
BetMGM also said last week that it planned to increase its spending on marketing for online gaming. It added that this additional spending would be the main driver of a forecast loss of about $240mn for the full year.
BetMGM currently had a “high single-digit market share” in sports betting, David said on Thursday. Investing in attracting new customers was “strategically the right thing to do,” she added.
BetMGM, which was launched in 2018, did not have products that were fully “market ready” for the US, said Entain chief financial officer Rob Wood.
Sports such as American football and baseball — which are not so popular in Europe — had massive fan bases and “it’s taken some time to build [products]” Wood said.
But with the National Football League season starting next month, Entain was expecting to see benefits from its £203mn acquisition of data firm Angstrom Sports last year, he said.
“We’re really excited to see how our new [US] sports betting products will engage with customers, and we’re investing behind it. That is really where the losses come from,” Wood added.
Entain said on Thursday that it had a 13 per cent market share of the combined online gaming and sports betting markets.
The upgraded forecast is a piece of good news for Entain. The business has previously struggled with investor discontent over an acquisition spree under Jette Nygaard-Andersen — chief executive between 2021 and 2023 — at a time when a number of countries were bringing in tougher rules on gambling.
It also had to deal with historic compliance failings at a Turkish subsidiary that it has since sold. The company’s shares are down almost 60 per cent in the past year.
“Overall, this is a positive update from Entain, with the group delivering a welcome beat versus expectations,” said David Brohan, an analyst at Goodbody. “Given the stock has been under significant pressure lately, today’s update should be well received.”
