Shares in Entain, owners of blue ribbon Ladbrokes Coral and co-owners of coming U.S. iGaming joint-venture BetMGM, hit the floor today, Tuesday, following the shock departure of new CEO Gavin Isaacs after only five-months in the job.
Gambling industry veteran Isaacs was only appointed as boss of the troubled, scandal-wracked gambling leviathan last September after an exhaustive search to replace Jette Nygaard-Andersen, who was defenestrated in a boardroom coup in December, 2023.
Shares in the FTSE100-listed owner of Sportingbet, bwin and partypoker, et al, plunged 11 percent to 665.20 GBX, representing a total one-third dive in value over the last 12-months.
Disruptive
Another leading gambling industry observer warned:
“Entain is at a critical point in its turnaround journey, so the timing of this is unfortunate and will likely cause investor concerns, particularly with an outstanding regulatory issue [in Australia].”
They were referring to an ongoing investigation of Entain Australia, launched in December by that nation’s financial crimes watchdog, probing suspected money laundering breaches.
And less than three-weeks-ago it was also announced that the U.K.’s Financial Reporting Council had decided to audit Entain’s 2022 accounts, which were conducted by Big Four accountants KPMG.
Scandal
In 2023–in perhaps the biggest-ever financial scandal to rock U.K. gambling–Entain was fined a massive £615 million (US$758m) for historic money laundering breaches by one of their Turkish affiliates when the company was known as GVC Holdings and being run by a troika, headed by the “legendary” Kenny Alexander.
Nygaard-Andersen–the first woman to head a major gambling firm–and then Isaacs were brought in to clean-up the mess and restore Entain to high reputation and financial success.
The turbulence seemed to have been quelled by an upbeat Financial Update this January, which indicated FY2024 Group EBITDA in excess of £1 billion, scheduled to be confirmed on March 7.
And only last week, in its 2024 annual accounts, Entain’s BetMGM U.S. iGaming and sportsbook joint-venture with MGM Resorts International was hailing the promise of going EBITDA-positive by this year’s end.
Affirmed BetMGM CEO Adam Greenblatt:
“With [our] renewed acceleration, we expect to achieve positive EBITDA in 2025, and our scaled podium position in the world’s largest gaming market underpins our confidence in our pathway to US$500 million EBITDA in the coming years [£398.88m].”
Crisis
Nevertheless, MGM Resorts has chosen to expand its BetMGM brand internationally, most recently in Scandinavia and the U.K. without assistance from Entain – perhaps not surprisingly, given the slew of scandals roiling the British omnichannel.
Once again Stella David, Entain’s Non-Executive Chair has been called to step into the crisis breach as Interim CEO, until a replacement for Isaacs can be found.
David remains adamant that: “Entain is making strong progress in delivering our strategic priorities.
“The Board and management remain aligned on the Group’s focus on operational excellence and maximising shareholder value. I look forward to leading the business as we continue to accelerate our performance.”
But it’s difficult to change a corporate narrative of a company stumbling from one disaster to the next.
And one wonders how soon it will be before the next duly appointed permanent CEO is leaving Entain “with immediate effect” by “mutual agreement”.
Watch this space.
