Q1 results 2021

Retail closures push revenue down 13% at Entain in Q1

| By Robert Fletcher
Gambling giant Entain has reported a 13% year-on-year in decline in net gaming revenue for its first quarter, mainly due to the closure of almost its entire retail estate during the period as a result of novel coronavirus (Covid-19) restrictions.

In a trading update, Entain said retail revenue was down 99% – covering its land-based operations in the UK, Italy, Belgium and the Republic of Ireland – while the number of sports wagers placed at these facilities also dropped 98%.

Each of these markets had in place measures preventing shops from opening for almost the entire quarter, as part of national efforts to combat further spread of Covid-19.

However, despite the significant decline in retail, Entain experienced growth in its online business, with revenue here rising 33% year-on-year – the 21st consecutive quarter of double-digit growth for this area of the group.

Revenue for Entain’s online sports betting division climbed 47% in Q1, helped by a 45% jump in the amount of sports bets place during the three months. Online gaming revenue also increased 23% in the period.

Entain said online growth was helped by the performance of BetMGM, its US-facing joint venture with MGM Resorts.

According to Entain, BetMGM has an overall market share of 19% in the states where it is active, and is also the leading igaming operator for the entire US, with a market share of 23%.

Entain chief executive Jette Nygaard-Andersen spoke positively about the overall performance in Q1, praising growth in the online business and highlighting that with Covid-19 restrictions being eased in its operating markets, this will allow its retail sites to reopen and recover in Q4.

“This has been another very successful and productive quarter with Entain making excellent progress across a number of our strategic priorities,” Nygaard-Andersen said. “This is testament to the hard work and dedication of our people across all aspects of our business.

“We saw excellent growth across all our major markets other than Germany where regulatory changes have impacted the market. BetMGM continues to exhibit outstanding momentum with impressive market share growth.

“With some easing of Covid restrictions, we are delighted to be welcoming customers back into our shops. While it has only been a handful of days since the re-opening in parts of the UK on the 12 April, we look forward to returning to more normal trading across our whole business.”

Nygaard-Andersen also highlighted the acquisitions of operators Enlabs AB and Bet.pt in Q1, saying these will support its strategic expansion into new regulated markets.

Entain finalised its acquisition of Baltic-based Enlabs in March after 94.6% of shareholders backed the deal, while Entain also completed the acquisition of Portuguese operator Bet.pt, having initially agreed a deal in October last year.

Other key developments for Entain in Q1 included launching new measures as part of its Advanced Responsibility and Care (ARC) initiative, which will be fully implemented in the market this summer.

New affordability checks will help the Ladbrokes and PartyGaming operator identify customers at risk of running into financial difficulty as a result of their gambling, and implement staking limits and tighter affordability checks.

“In line with our expectations, the momentum from the end of 2020 has carried into 2021,” Nygaard-Andersen said.

“Although Covid creates some near-term uncertainty, by maintaining our focus on the customer, providing them with great products and services, we remain confident and excited in our long-term prospects.”

Today, Entain also launched a share ownership plan that would allow its employees to acquire shares. Through the scheme, Entain staff can contribute between £5 and £100 per month and, after three years, can buy shares in Entain for 20% less than their market value.

“Entain has been one of the highest performing companies in the FTSE-100 over the past year, which is the result of hard work and efforts from teams across our international business,” Nygaard-Andersen said. “Building a strong customer-centric culture where everyone contributes and shares in our continuing success is really important, so this plan is designed to be attractive and accessible to all.”

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