Tumbling Dice, Entain Shares Fall As Supergroup Issues Revenue Warning

Shares in Entain plunged by nearly 12 percent in early morning trading Monday–the biggest faller in the FTSE-100–, as the UK-headquartered supergroup, in a bid to get ahead of worsening news, issued a financial warning over softening revenues.

The owner of Ladbrokes Coral, bwin, Sportingbet, PartyPoker, and US joint-venture BetMGM, announced that it expects to miss its Full Year revenue guidance. But Entain also emphasised that, nevertheless, its overall earnings for 2023 remain on target.

Despite a big push into the Central and Eastern European market, the strong reforming hand of CEO Jette Nygaard-Andersen on the corporate tiller, and a determination to concentrate only on regulated betting markets, 2023 has not been kind to the Isle of Man-headquartered Omnichannel.

Historic corruption and money laundering charges in Turkey, when Entain was trading as GVC, continue to haunt the company, leading it in H1 just gone to set aside an estimated £585 million (US$715.74m) for potential upcoming fines and reparations.

And only last month it was announced that MGM Resorts International, Entain’s partner in the US-facing BetMGM iGaming joint-venture, was planning to launch the brand in the UK and European market with LeoVegas–not Entain–as its platform and software provider.

The value of Entain shares has fallen by some 30 percent on the FTSE-100 since the start of the year.

Citing “poor” sporting results, the impact, both growing and anticipated, of safer UK gambling measures and slow growth in Australia and Italy, Entain warned stakeholders and the market that revenue this summer had been “softer than expected”.

Hail Mary

And the company didn’t rule out possible job cuts among its 24,000-plus international workforce.

“We have made significant changes to the group over the last three years,” mitigated CEO Nygaard-Andersen.

“Our focus now is on accelerating the actions we are taking to drive sustainable organic growth, expand our margins, capitalise on the US opportunity and deliver long-term returns for our shareholders.

“We remain confident in our ability to deliver on the vast opportunities ahead of us.”

Today Entain shares are hovering around the 920p mark on the London stock exchange.

The company’s online NGR is now expected to grow by only single digit margins for the third-quarter, ending September 30.

But full year EBITDA is expected to be maintained, as previously estimated, in the region of £1 billion (US$1.22bn).

Added Nygaard-Andersen: “We continue to attract more customers than ever before to enjoy our products and services.

“BetMGM remains on track to deliver positive EBITDA in H2 and a full year NGR performance at the top end of our expectations. We are particularly excited about the product improvements that we are rolling out over the NFL season.”

Some observers, eagerly awaiting Entain’s upcoming Q3, may call it: “A Hail Mary”.

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