Bad News, Good News, Entain’s Annus Horribilis Ends On A Bum Note

Good news? Bad news? First the bad news: For Entain there is no good news.

After posting a loss, after tax, of £879 million (US$1.12bn), could it really have ended better, or even more fittingly, for UK gambling supergroup Entain following their disastrous year, which saw the defenestration of their CEO and a swingeing, £600 million (US$767.7m) payment to settle historic money laundering breaches.

And, indeed, there may even be worse to come, warned the LSE-listed brand–owners of Ladbrokes Coral, Sportingbet, bwin and partypoker–as they officially unveiled the full fiscal disaster of their FY2023 today (March 7), amid ongoing fears that new gambling regulations are going to even further hammer their potential profits.

Although Entain saw an 11 percent, year-on-year, increase in Net Gaming Revenue (NGR)–driven, in great part, by gaining 23 percent more iGaming customers–, its underlying EBITDA flatlined at £1 billion (US$1.27bn).

The only chink of light on the Entain horizon was the as-predicted performance of their BetMGM sportsbook and iGaming US joint venture with MGM Resorts International, which experienced 36 percent, year-on-year, financial growth and NGR of US$1.9 billion (£1.48bn).

Imbroglio

But that gaping, main body loss of £879 million–compared to the previous year’s profit of £32.9 million (US$42.02m)–devoured all hope of 2023 fiscal redemption.

The aforementioned hits–the sacking of CEO Jette Nygaard-Andersen (pictured, below) and the £600 million sanction agreed with UK financial authorities to settle an historic Turkish money laundering imbroglio, when Entain were operating as GVC Holdings–were key factors in the group’s Annus Horribilis, “Horrible Year”.

But so too were ill-thought-out attempts to buy the company out of trouble by paying way over the top for a string of Central and Eastern European operators, most notably Poland’s market-dominant STS Omnichannel, which Entain acquired for £750 million (US$958.29m) in June.

Quite naturally, Entain Chair Barry Gibson, sought to put a positive spin on his company’s dire performance, describing 2023 as: “A period of necessary, but ultimately positive, transition.

“We have significantly strengthened the quality of our revenue base, enhanced our board, and delivered a resolution to a critical, historic, regulatory issue,” he said.

Sharks Circling

While the UK gaming giant expands its search for a new permanent CEO, Interim CEO Stella David “continues to take appropriate actions to deliver changes to drive a better long term performance,” affirmed Gibson.

With Entain still beating against financial and market headwinds, and effectively lacking a clearly-definable course, it remains to be seen if corporate privateers will be repelled or welcomed aboard what many still consider a sinking ship.

As for David, she, too, continues to sail the party line:

“We are making commendable progress across various initiatives to refine our market portfolio, prioritise organic growth, increase our share in the US, and broaden our margins,” she said.

“With a laser focus on operational excellence and impeccable execution, we are confident that we are charting a course toward sustained growth.

“Our conviction in our continued, focused execution driving organic growth into 2025 and beyond remains unwavering.”

Maybe.

But the sharks are circling.

Entain shares were riding at 790.60 GBX today, down 4.79 percent.