Online sports betting growth drives revenue up at Entain in Q3
In a trading update, Entain said online revenue was up by 7%, but when excluding Germany this increase was 18% year-on-year, and as such represented the 23rd consecutive quarter of double-digit growth for online.
The increase in online revenue was driven by a 12% rise in online sports betting revenue, with sports wagers up 1%, while online gaming revenue edged up 1%. Entain also noted all of its major markets delivered a strong online performance in Q3, singling out Australia and Brazil in particular.
Turning to retail, revenue here was down 1% year-on-year, as Entain noted UK volumes continued their recovery to pre-novel coronavirus (Covid-19) levels, while rebuilding was also ongoing in Europe. Retail sports bets also declined 15% in Q3.
In terms of its performance in the US, Entain said that its BetMGM joint venture with MGM Resorts continued to deliver strong growth, holding a 23% market share across the states in which it operates during the three months to August.
BetMGM is now live in 16 markets across the US, following recent launches in Arizona, Wyoming and South Dakota.
“These results demonstrate Entain’s continuing ability to deliver sustainable, consistent and diversified growth,” Entain chief executive Jette Nygaard-Andersen said. “Our powerful Entain platform provides customers with great products and experiences, which enables us to grow ahead of our markets as demonstrated by 23 consecutive quarters of double-digit online growth.
“We continue to lead our industry in the all-important area of player protection, and I am excited by the early results of our innovative ARC programme, which we firmly believe has the potential to transform player protection across the industry.”
Looking at the operator’s year-to-date performance, Entain said that in the nine months to the end of September, group revenue was up 8% year-on-year.
Online revenue increased 20% – helped by a 38% hike in online sports betting revenue and a 7% rise in online gaming revenue – but retail was down 23% on the back of the Covid-19 impact.
Entain said group earnings before interest, tax, depreciation and amortisation (EBITDA) for the full year remains in line with previous guidance of between £850m (€1.0bn/$1.16bn), with growth in Q3 set to be offset by the licensing process in the Netherlands.
The Dutch regulated market opened for business on 1 October, with only licensed operators now able to offer online gambling in the country.
“By offering customers ever more engaging products, while leveraging our scale and technology, we will drive the flywheel effects of secular growth dynamics that can triple the size of our business,” Nygaard-Andersen said. “As a result, we remain very confident in Entain’s future prospects.”
Last month, Entain confirmed it had received a takeover proposal from US betting giant DraftKings.
After an initial bid was rejected by Entain, DraftKings returned with a new proposal of £28.00 per share, which would comprise a cash portion of £6.30, with the rest made up of Class A common shares, and represented a 46.2% premium on Entain’s closing share price on 20 September.
Based on the 585,591,361 Entain shares in issue as of 30 June 2021, this would value the business at £16.40bn.