Bowed And Bloodied But Entain Still Standing

There’s something deeply disquieting about witnessing the imminent humbling of a gambling industry giant that appears to have lost its way yet such seems to be the score with UK colossus Entain, bowed and bloodied but still standing despite a flurry of financial blows.

Even the prospect of achieving revenue of some US$2 billion (£1.58bn) by year’s end for its super hot US sportsbook BetMGM joint-venture with MGM Resorts International has failed to halt the slide of Entain shares on the London Stock Exchange.

Today (December 5)–following a positive BetMGM Trading Update in The States–Entain shares were sliding at 768.60 GBX, a fall of 28.20 GBX – or 3.54 percent; meaning that, year-on-year, Entain share value has plunged 43.65 percent.

MGM Resorts and Entain–the owner of storied UK brands Ladbrokes Coral, bwin, Sportingbet, PartyPoker, PartyCasino, et al–presented an upbeat financial overview that predicted BetMGM revenue of US$1.8 billion (£1.42bn) to US$2 billion for 2023 — compared to net gaming revenue of US$1.44 billion (£1.14bn) last year.

And the sportsbook, running third behind Flutter’s FanDuel and DraftKings in the US sports betting stakes, is now targeting EBITDA of US$500 million (£395.95m) by end 2026.

Buying The Best Of British

“Key enhancements in both digital sports and market-leading iGaming product [presents] the opportunity to invest competitively behind the brand, driving accelerated player acquisition and aiding player retention,” said Entain in a statement.

The FTSE-100 company, one of the Big Four UK gambling giants, along with bet365, 888 Holdings and Flutter, has been hammered by a tsunami of bad news of late, led by its agreement last week to pay a massive financial penalty of £585 million (US$742.03m), in the form of a so-called DPA, or Deferred Prosecution Agreement, to settle a historic bribery and money laundering scandal in Turkey – when it was operating as GVC Holdings.

The travails of Entain have been closely monitored in this publication, but throughout BetMGM has stood out as a bright shining plus in the saga.

Online US sports betting, further turbo-charged by the nascence of ESPN BET, is arguably the world’s most exciting, if not cut-throat, gambling market since it was effectively legalised in May, 2018.

Last month, Flutter–the world’s largest online betting company–became the first to turn a profit in the United States through its FanDuel offering.

With the US mega hitters–Disney, Caesars Entertainment, MGM Resorts–now fully charged by the vast, still relatively untapped, riches of digital gambling, UK leaders such as Entain and 888 Holdings have become prime takeover targets.

Reports of recent but aborted bids for the two national giants have recently surfaced in the media.

Beaten off for now. But the gambit to buy the best of British–and buy them cheaply, while they remain weakened by poor corporate governance–remains in play.

2024? It’s going to be a heck-of-a-year.

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