By Joe Hoppe
Entain, the sports-betting and gambling entertainment group, announced that its net gaming revenue has increased by 7% in the third quarter on a reported basis. However, on a pro forma basis, the revenue slipped by 6%. Despite this, the company has reaffirmed its full-year earnings and revenue expectations.
Q3 Results
In the period under review, net gaming revenue for Entain's online business rose by 9%, while it increased by 4% across retail sites. However, when considering pro forma figures, online revenue fell by 6% and retail revenue declined by 4%. These negative trends were primarily driven by setbacks in online sports betting and regulatory effects.
Positive First Half of 2023
For the first half of 2023, Entain's net gaming revenue experienced a significant increase of 19%, reaching £2.40 billion ($2.92 billion).
Outlook and Expectations
Entain announced that October volumes were in line with expectations. However, due to customer-friendly results, sports margins will impact earnings before interest, taxes, depreciation, and amortization (EBITDA) by approximately £45 million. The company clarified that this impact will not affect its expectations beyond the fourth quarter.
Furthermore, Entain provided guidance for the full year, stating that it is on track to meet the upper end of its total net gaming revenue range of $1.88 billion to $2.00 billion. It also expects to achieve full-year EBITDA in the range of £1.00 billion to £1.05 billion. These figures do not include the acquisition of TAB NZ.
Looking ahead to 2024, Entain anticipates low single-digit growth in its online net gaming revenue.
CEO's Strategy
Jette Nygaard-Andersen, Chief Executive of Entain, outlined the company's plan moving forward. The strategy entails focusing the portfolio on organic growth, increasing market share in the U.S., improving operational leverage, and boosting EBITDA margins.
Initiatives Underway
Entain has several initiatives in progress to achieve its goals. The company plans to prioritize high-growth, high-return markets such as the U.S. and Brazil. Additionally, it aims to drive profitable growth in core markets like the U.K. and Australia while exiting smaller non-core operations.
