Entain Faces Challenges in Q3 During Safer Gambling Measures and Slower Growth

Entain, a leading global betting and gaming company, has released a trading update for the third quarter, revealing challenges in its online net gaming revenue (NGR) due to slower growth, adverse sports results, and the impact of safer gambling measures.

While Entain still expects some growth in Q3 online NGR, it will likely be softer than anticipated, with a high single-digit percentage increase expected. The company attributes this slowdown to adverse sports results in September, slower-than-expected growth in Australia and Italy, the ongoing impact of safer gambling measures, and regulatory challenges, particularly in the UK.

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However, the company also highlighted positive growth drivers, including strong pro forma growth in active customers, a successful retail performance, and BetMGM’s positive performance in the US. Recent acquisitions, such as SuperSport in Croatia and Polish sportsbook operator STS Holding, have also contributed to Entain’s growth.

Despite the challenges in online NGR, Entain maintains its full-year EBITDA (earnings before interest, taxes, depreciation, and amortization) guidance of between £1.00 billion and £1.05 billion for 2023.

In addition to its Q3 update, Entain highlighted its significant strategic transformation over the past three years. The company has focused on improving the quality of its earnings and aligning its operations for long-term shareholder value.

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Entain plans to provide more details about this strategy during a longer trading update on November 2, which will include a comprehensive market review focusing on sustainable organic growth. The company aims to simplify its structures and operations, optimize capital allocation priorities, and achieve an online EBITDA margin of 30%.

Entain CEO Jette Nygaard-Andersen expressed confidence in the company’s ability to deliver on its growth opportunities and provide long-term returns to shareholders.

The Q3 update follows a record first half for Entain, which reported a 14% year-on-year increase in net gaming revenue to £2.40 billion. Online revenue led the way, reaching £1.68 billion, a 145% increase from the same period last year. The success was driven by strong trading, acquisitions, and a focus on recreational customers.

Retail revenue also saw an 11% increase to £709.3 million, partly attributed to the easing of Covid restrictions. In the US, BetMGM achieved $944.0 million in revenue, a 65% YoY growth, and is on track to reach full-year revenue between $1.80 billion and $2.00 billion.

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Entain disclosed that it has taken a £585 million provision for a deferred prosecution agreement (DPA) with the Crown Prosecution Service (CPS) related to its historical activities in Turkey. The company is awaiting judicial approval for the settlement, which is expected to be paid over a four-year period.

The company expects the HM Revenue and Customs (HMRC) to seek judicial approval for the settlement in Q4 2023.

The post Entain Faces Challenges in Q3 During Safer Gambling Measures and Slower Growth appeared first on iGaming.org.

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