International edition
October 19, 2021

Slowdown as lockdowns end

Entain's online growth slows to 10% in Q3, BetMGM climbs amid DraftKings takeover bid

Entain's online growth slows to 10% in Q3, BetMGM climbs amid DraftKings takeover bid
Jette Nygaard-Andersen, Entain’s CEO.
United Kingdom | 10/12/2021

The UK gambling firm reported its 23rd consecutive quarter of double-digit online growth, but lower than its 26% in Q3 2020. Net gaming revenue was also up, at 4%, while retail grew 1%, with UK volumes recovering toward pre-pandemic levels. BetMGM, the company's US venture with MGM, drove growth in the period with a 23% market share. Overall revenues were partly weighed down by the new igaming licensing regime in Germany.

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ntain has posted a Q3 trading update, marking its 23rd consecutive quarter of double-digit online growth. The sports-betting and gaming entertainment group reported the results on Monday, showing strong performance throughout the period: net gaming revenue was up 4%, against a period of high growth in the prior year.

“These results demonstrate Entain’s continuing ability to deliver sustainable, consistent and diversified growth,” said Jette Nygaard-Andersen, Entain’s CEO. “Our powerful Entain platform provides customers with great products and experiences, which enables us to grow ahead of our markets.”

Online net gaming revenue was up 10% and, excluding Germany, all major markets delivered a strong performance, particularly Australia and Brazil. Retail net gaming revenue was up 1%, with UK volumes recovering toward pre-pandemic levels, and activity steadily rebuilding in Europe.

BetMGM, the company’s partnership with MGM Resorts International for sports-betting and iGaming in the US, “continues to deliver strong growth”, with a 23% market share across the country during the period. It is the “clear iGaming market leader” at a 32% market share, states a press release, with the platform now live in 16 jurisdictions.

“We are now challenging for the number one market position,” said Nygaard-Andersen. The CEO commented Entain’s total addressable market is expected to “more than triple” to over $160 billion, driven by the opportunity in the US, growth plans in other new and existing markets, and the company’s strategy of entering into “new areas of interactive entertainment.”

Fiscal Year 2021 Group EBITDA is expected to be in line with previous guidance of £850 million - £900 million. Uplift from strong Q3 trading performance offset by the previously announced impact of the licensing process in the Netherlands.

The British gambling firm, home to Ladbrokes and Coral betting shops as well as the bwin and partypoker online brands, has been recently the subject of a takeover proposal from US rival Draftkings.

The takeover offer is a $22 billion deal, double a bid rejected from joint venture partner MGM in January. It is part of ongoing deals and offers taking place in the US, as the country opens up to sports betting and more players seek to expand their operations there.

The positive results posted by Entain for the BetMGM brand throughout Q3 make DraftKings’ interest in the business a justified one: BetMGM’s accelerating growth makes a takeover particularly attractive.
Under British takeover rules, DraftKings has until October 19th to either make a firm bid or walk away, reports Reuters.

During an interview at G2E 2021, MGM Resorts’ CEO Bill Hornbuckle confirmed MGM's intention to secure majority control over BetMGM after the DraftKings proposal. MGM will pursue a majority takeover of BetMGM in the event that DraftKings successfully purchases Entain, with the goal of accessing the unit’s technology.

DraftKings has not yet commented publicly on whether or not it is angling to gain control of BetMGM. If it did so, it would likely be with the hopes of folding it into its existing iGaming and online sportsbook business.

MGM’s CEO remarked that the company has “50% now. I would like more. I would need more.” He also pointed out that there is also the possibility of licensing BetMGM’s technology from DraftKings.

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