Entain expects uplift to online trade from FIFA World Cup and return to Netherlands
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Entain expects next month’s FIFA World Cup in Qatar to boost digital sales in the last quarter of this year.
The owner of Ladbrokes has struggled to increase online revenue for the past year as the easing of Covid-related restrictions encourages gamblers to return to their local bookmakers.
For the three months ended September, the group revealed that its digital net gaming revenue (NGR) is up just 1 percent despite record customer activity, compared to a 10 percent increase in retail NGR.
Difficulties: Ladbrokes and Coral owner Entain has struggled to increase online revenue for the past year due to easing of Covid-related restrictions
Sales were negatively impacted by the company’s temporary departure from the Netherlands, in the run-up to the legalization of internet gambling in the country and the introduction of a new licensing regime.
By the end of 2022, Entain expects to restart operations in the Netherlands and complete the acquisition of Amsterdam-based BetCity.
It expects this to significantly improve online commerce, along with the hosting of the FIFA World Cup between November 20 and December 18, where England and Wales will both compete.
“We have healthy momentum across the company and look forward to a strong end to the year, including the World Cup,” said Jette Nygaard-Andersen, the group’s CEO.
Further growth will result from the completion of the acquisition of Supersport, the largest gambling provider in Croatia, and the establishment of Entain CEE, a joint venture with Czech investment manager EMMA Capital.
Entain has picked up a host of gambling companies this year, including Avid Gaming, the owner of Canada’s leading online gaming brand Sports Interaction, Polish bookmaker Totolotek and Latvian casino operator Klondaika.
FTSE 100, whose other brands are Foxy Bingo, Coral and PartyPoker, is the UK’s second largest gambling company by revenue, after Paddy Power owner Flutter Entertainment.
But the BetMGM arm, a joint venture with Las Vegas-based entertainment giant MGM, remains the most prominent gaming provider in the US, with a market share of 31 percent.
Major player: The BetMGM arm of Entain, a joint venture with entertainment giant MGM, remains the most prominent gaming provider in the United States, with a market share of 31 percent
Third quarter revenues were up about 90 percent year-over-year to more than $400 million thanks to a “successful start” to the National Football League (NFL)’s final season.
Entain forecasts that this division’s net gaming revenue will grow by more than half this year to $1.3 billion and deliver a “sustainable positive” underlying in 2023.
“Looking ahead, we remain vigilant about the economic backdrop,” Nygaard-Andersen adds.
“However, our diversified revenue base and robust business model allows us to maintain confidence in our ability to deliver on our growth and sustainability strategy.”
By contrast, Rank Group offered a less optimistic outlook on Wednesday, with the owner of Mecca Bingo emphasizing additional cost pressures on his business and consumers.
Even with the UK government’s Energy Bill Relief Scheme, the company expects its annual energy bill to increase by about half this financial year to £34 million.
Costs for food, staff salaries and supply chain issues have already risen, while the company is also unable to take advantage of leave payments or corporate rates like during the lockdown.
The warning was issued alongside results showing Rank’s net gaming revenue grew just 2 percent in the first quarter, due to weak trading at Grosvenor casinos outside of London.
Rank Group Shares fell 9.2 percent this morning to 58 pence, making it the worst decliner in London’s markets. In comparison, Entain shares were the top risers on the FTSE 100 Index, jumping 4.4 percent to £11.32.
Russ Mold, the investment director at online platform AJ Bell, said, “There’s a saying that when times are tough, our appetite for betting grows.
“People who suffer from a higher cost of living or bleak economic conditions are often willing to bet the remaining money in their pocket in hopes of winning big with the horses, football or other sports or games.
“So, given the current miserable background, you’d expect betting firms to bring it in. The evidence suggests it’s not that clear.”
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