Entain's online business hit by weaker macro-economic conditions in H1; sees record customer base growth

Entain issued Thursday a trading update for the second quarter and first half of the year. Group net gaming revenue grew 18% in H1 year-over-year, with Q2 up 8%, while online revenues dropped 7% for both periods.

The company explained that the performance continues to reflect "tough" 2021 comparators driven by Covid lockdowns, closure in Netherlands ahead of licencing and the implementation of tighter affordability measures in the UK. "A weaker macro-economic environment is reducing customers’ rate of spend, moderating overall Online growth versus our previous expectations," the owner of Ladbrokes and bwin noted.

Its updated guidance of full year Online NGR is flat year-on-year based on the current outlook, excluding impacts from the upcoming UK Gambling Act Review, which could now be affected by the resignation of Prime Minister Boris Johnson and his Gambling Minister Chris Philp on Thursday.

As for retail trading, it is ahead of Entain's expectations, with volumes in Q2 ahead of pre-Covid levels driven by gaming and self-service betting terminals.

Entain's new offices in Stratford, London

Furthermore, Entain reported a continued broadening of the customer base with record level of actives in Q2, up 60% versus the same period in pre-pandemic 2019 (pre-Covid).

In the Netherlands, Entain's acquisition of BetCity announced last month is expected to complete in H2, which the company hopes it will drive strategic growth in the newly regulated Dutch market. According to the company, BetCity’s offering is "highly complementary" to Entain’s bwin and Party brands, which are awaiting approval for a license to operate in the Netherlands – now expected during the latter part of this year.

Entain's U.S. venture with MGM, BetMGM, "continues to perform strongly, in line with expectations." It is the number two operator with 24% market share where BetMGM operates, excluding New York. In the iGaming vertical, it has a 29% market share. It has recently announced exclusive partnerships with Carnival Corporation to offer BetMGM on board cruise ships, as well as with Sony Pictures and IGT for a Wheel of Fortune branded gaming experience, and is on track for FY22 NGR of over $1.3 billion.

Jette Nygaard-Andersen, Entain’s CEO, commented: “I am very pleased to see that more customers are choosing to play with us, reflecting our focus on recreational players and putting the customer at the heart of everything we do. We continue to expand our growth opportunities through complementary acquisitions with four transactions so far this year. Underpinned by the Entain Platform, BetMGM continues to demonstrate its leadership in the US with a 24% market share."

"Our leadership in responsibility and sustainability has seen us implement further player safety measures alongside ARCTM, particularly in the UK, as well as respond to regulatory changes as markets implement regulation," she added. "The macro-economic outlook is uncertain, however the underlying performance of our business remains strong. With an increasingly recreational customer base and relatively resilient revenue, we remain confident that our customer focus, diversification and proven ability to grow both organically and through M&A will enable us to deliver further progress against our strategy."