Nygaard-Andersen steps down as CEO of Entain

Nygaard-Andersen has led Entain as CEO since January 2021, having previously served as a non-executive director. She joined the business from Modern Times Group, replacing Shay Segev after he left to join sports streaming platform Dazn.

Stella David, who is currently a non-executive director, becomes CEO on an interim basis while Entain seeks a permanent replacement. David will start the role immediately.

Stella David: “An intensely commercial leader”

Entain chairman Barry Gibson paid tribute to the outgoing Nygaard-Andersen and her time in charge.

“Under Jette’s leadership, Entain has executed a fundamental strategic shift towards regulated or regulating markets, overhauled its governance, transformed its operations and significantly improved its customer offering,” Gibson said.

“In Stella David we are hugely fortunate to have an intensely commercial leader with a long track record of success across multiple industries. I am confident that she will quickly help to set us on the path to achieving our strategic aims while we conduct a rigorous search for a permanent CEO.”

David holds board positions across a number of retail and entertainment businesses including Vue Cinemas, Bacardi, Domino’s Pizza and Norwegian Cruise Line Holdings.

Departure comes after Entain closes Turkish case

Nygaard-Andersen’s decision to exit comes just days after Entain resolved a long-running case with the Crown Prosecution Service (CPS). This relates to historic activities in Turkey.

Entain last week reached a final deferred prosecution agreement (DPA) with the CPS over the matter.

Terms of the DPA, announced on 24 November, state Entain must pay a financial penalty and disgorgement of profits to a total of £585.5m. The business will also make a £20m charitable donation and contribute £10m to HMRC and CPS costs.

These will be paid in instalments and will run for a period of four years. The commencement date will follow from the final court approval.

Nygaard-Andersen played a major role in reaching the settlement during her time with the business, Gibson said. He praised his former colleague’s “exceptional leadership” in what was a “difficult” time for the group.

“She has offered exceptional leadership during what has been a hugely challenging period,” Gibson said. “It is no exaggeration to say that the HMRC investigation posed a number of threats to our group.  

“As the court last week recognised in approving a DPA, had the matter not been resolved by way of a DPA, the consequences to the company and all of its stakeholders could have been disproportionate. The overhaul of the business model, strategy and culture of the group in recent years was vital to securing the successful conclusion of a DPA process.

“We are all indebted to Jette for her dedication to steering the company through such a difficult time. She has also led the executive team in devising a new commercial strategy that I am confident will lead to stronger organic growth and a more profitable Entain. On a personal note, I am sorry to see Jette leave the business.”

Nygaard-Andersen: I leave Entain in a “safe, stable and sustainable” position 

“The past three years have been rewarding and challenging in equal measure,” Nygaard-Andersen commented. “The resolution of the HMRC investigation into the legacy business, which was sold by a former management team in 2017, offers a clean inflection point for me and for Entain.  

“The group is now safe, stable and sustainable. I believe that this is the right time to move on to other business and career opportunities.”

What will the impact be for Entain?

Nygaard-Andersen helped steady something of an uncertain ship at Entain while the CPS case hung over the group.

However, this has only been part of the concern for the business. This month, investment bank and financial services giant Goldman Sachs downgraded Entain to sell from buy. This was amid concerns over business growth, particularly within its online division. 

While highlighting “regulatory headwinds” in its report, the wider focus was on present issues of growth. Goldman Sachs forecasted Entain’s pro-forma online growth to be negative in Q4 of 2023 and H1 of 2024. The group, it added, is not expected to return to growth until the second half of next year.

Goldman Sachs also cut earnings per share estimates for 2024 and 2025. The bank says this will be approximately 30% lower than previously stated, adding that free cash flow has also deteriorated.

Mixed news in the US

Entain has placed a major focus on the US during recent years and, while the BetMGM joint venture has proved successful, recent updates suggest a mixed outlook. This was picked up by Goldman Sachs.

In its Q3 update, Entain said BetMGM held an 18% market share in US states. This was level with Q2 and only slightly ahead of 17% during the first quarter. 

BetMGM this month also set out its aim of reaching 25% market share in the US by 2026, as well as delivering $500.0m in positive EBITDA.

Loss of confidence in Entain?

BetMGM also recently expanded into the UK – but without Entain. Instead, MGM is working with LeoVegas, with the international platform utilising LeoVegas’ technology and platform. LeoVegas was acquired by MGM Resorts last year for $604m.

While Entain reported a record H1 2023, its Q3 update showed online net gaming revenue growth had slowed to single figures.

Not long after this, chairman Gibson and Nygaard-Andersen significantly increased their shareholdings. The chair’s spouse, Brenda Gibson, also increased her holding in Entain from 41,902 shares to 57,434. Chair Gibson has since purchased more shares in the group.

Under the microscope

In the time leading up to her departure, Nygaard-Andersen has received criticism for her conduct – both by the industry and within Entain itself.

Last week, a report in the Financial Times revealed contention within the group. Criticism from previous and current executives and investors centered around Nygaard-Andersen struggling with slow revenue growth at Entain, as well as the ever-increasing regulatory obligations.

The period leading up to Nygaard-Andersen’s resignation was also marked by a flurry of M&A activity at Entain. She took the forefront as the spokesperson on these, in contrast to Gibson taking the lead on the CPS front.

In June, Entain agreed to acquire Polish sportsbook operator STS Holding for £750m. At the time, Nygaard-Andersen commented on the positives of acquising one of Poland’s leading sports betting operators, calling the country a “hugely exciting and fast-growing market”. The acquisition closed in August after receiving 99.3% shareholder backing.

In October, Entain also finalised its acquisition of Angstrom Sports. Nygaard-Andersen was decisive on how the deal would benefit BetMGM – its sports betting joint venture with MGM Resorts – in the US.