Entain understood to be considering sale of multiple assets

Originally reported in the Financial Times, Entain has hired Wall Street firm Moelis to advise on potential asset sales.

The news comes following its full-year 2023 net loss of £936.5m (€1.09bn/$1.19bn), announced on 7 March in its annual earnings report.

Entain is understandably keen to reduce its asset exposure given the cost of its extensive acquisition campaign. The STS acquisition in 2023, for example, incited a shareholder revolt from Eminence Capital at the time.

According to the Financial Times, those which are not directly integrated into the company’s platform will be given priority for sale. In total, these accounted for close to a third of net gaming revenues in the first half of last year.

If this is the case, those up for consideration will include the Netherlands-based BetCity, which was purchased for £398m in 2023, as well as Ladbrokes Australia, the Baltic-facing Enlabs and Georgia’s CrystalBet.

The sale of the above brands will enable Entain to return its focus on core markets, including the UK, and the US with BetMGM, which it launched in partnership with MGM Resorts in 2018.

Risky position for Entain

2023 was a tough year for Entain, with its heavily pursued strategy of sports betting mergers and acquisitions leading to questions over the company’s future, ultimately costing chief executive Jette Nygaard-Andersen her job.

Despite an 11.1% rise in net gaming revenue, Entain’s HMRC settlement led to a £936.5m net loss for the company.

Announced in November and finalised in December, the settlement set out that Entain must pay £585.0m. It will also make a charitable donation of £20.0m and contribute £10.0m to CPS and HMRC costs. All these costs were noted in its 2023 results as were other additional costs from across the business.

While the net loss made for grim reading, chairman Barry Gibson is upbeat about long-term growth prospects. Gibson said 2023 was a year of “necessary, but ultimately positive, transition” for Entain.

“We have significantly strengthened the quality of our revenue base, enhanced our board and delivered a resolution to a critical, historic regulatory issue,” Gibson said. 

Entain’s reasons to be positive

As well as 2023 net revenue reaching £4.83bn, group revenue also climbed 11.0% to £4.77bn. Entain previously noted that revenue was higher across all core business segments.

Breaking down the 2023 figures and Entain says that, overall, the group performed in line with expectations. 

The UK remains its core market with £1.95bn of all revenue. Italy revenue hit £517.4m and Australia and New Zealand £515.1m. A further £1.44bn came from the rest of Europe and £339.9m the rest of world.

Such was growth in the online business that total customers for the segment jumped 23.0% year-on-year to a record high.

In its 2023 financial results published last month, Entain also referenced the performance of BetMGM, its joint venture with MGM Resorts International. 

BetMGM published its 2023 results in February, with these revealing that revenue in 2023 fell just short of $2.00bn. Entain holds a 50% share in the BetMGM business, with this contributing to the overall revenue figure for 2023.

As noted in BetMGM’s results last month, key highlights from 2023 include securing a 14.0% share in sports betting and igaming markets where BetMGM operates. In H2 of 2023 the business also posted positive EBITDA for the first time.

However, there was something of a blip for Entain, with MGM choosing to roll out BetMGM in the UK without Entain. MGM instead partnered with LeoVegas for the launch, with the brand going live in August 2023.