Entain has published its second quarter trading update, reporting that while group net gaming revenue (NGR) is up year-over-year in Q2 and the first half of the year, online NGR is down due to a “weaker macro-economic environment” and regulatory changes.
The firm also provided an update on BetMGM, its joint US venture with MGM Resorts, stating it “continues to perform strongly,” adding that it is the established number two operator in markets where it operates (excluding New York) with a leading igaming market share.
Updating its investors, Entain has reported that its NGR in H1 is up 18%, while in Q2 it grew by 8%, ahead of Q1.
Most of this growth was caused by returns in the retail sector, which saw its NGR improve by 243% in H1 and 79% in Q2, trading ahead of expectations and driven by gaming and self-service betting terminals.
However, online NGR is down by 7% in H1, falling by 7% in Q2 due to “tough 2021 comparators driven by Covid lockdowns, closure in the Netherlands ahead of licensing, the implementation of tighter affordability measures in the UK, and a weaker macro-economic environment is reducing customers’ rate of spend, moderating overall online growth versus our previous expectations”.
Despite drops in online NGR, the firm states that its underlying performance remains strong, as it continued to broaden its customer base with a record level of activities in Q2, up 60% versus the same period in 2019. Online NGR three-year CAGR up 13% cc for H1.
Entain also reported on the progress of BetMGM, which it says “continues to perform strongly, in line with expectations”. The firm stated the operator is the established number two operator in the markets where it operates (excluding New York) with a 24% share and the leader in igaming with a 29% market share.
BetMGM’s partnerships with Carnival Corporation to offer BetMGM on board cruise ships and Sony Pictures and IGT for a Wheel of Fortune branded gaming experience were also highlighted.
Entain states BetMGM is on track for FY22 NGR of over $1.3bn, reiterating its expectation to reach positive EBITDA during 2023.
Jette Nygaard-Andersen, Entain’s CEO, commented: “I am very pleased to see that more customers are choosing to play with us, reflecting our focus on recreational players and putting the customer at the heart of everything we do.
“We continue to expand our growth opportunities through complementary acquisitions with four transactions so far this year. Underpinned by the Entain Platform, BetMGM continues to demonstrate its leadership in the US with a 24% market share.”
In Europe, Entain notes that BetCity.nl – the Netherlands regulated market’s current leading igaming operator – is expected to be added to its online gambling portfolio during H2. It was also awarded GamCare’s Advanced Safer Gambling Standard for the highest standards of player protection and social responsibility for its UK activities.
The firm also continued ESG leadership and further progress delivering across its sustainability charter, launched the Pitching-In Volunteer Hub for the Trident Leagues, and appointed Rahul Welde as an independent Non-Executive Director.
Closing its update, Entain detailed its 2022 full-year guidance, in which the group anticipates delivering ‘flat results’ on its online NGR based on the current outlook and excluding the pending impacts of the UK government’s upcoming gambling review.
Nygaard-Andersen continued: “Our leadership in responsibility and sustainability has seen us implement further player safety measures alongside ARC, particularly in the UK, as well as respond to regulatory changes as markets implement regulation.
“The macro-economic outlook is uncertain, however, the underlying performance of our business remains strong.
“With an increasingly recreational customer base and relatively resilient revenue, we remain confident that our customer focus, diversification, and proven ability to grow both organically and through M&A will enable us to deliver further progress against our strategy.”
