Entain warns investors over Q3 revenues despite BetMGM strength

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Entain has issued a warning for investors that it anticipates a revenue slowdown in Q3 due to a series of headwinds encountered during the period. 

The London-listed global gambling group published an update on current trading in which it stated that its online NGR for Q3 would be down by a “high single-digit” figure on a pro-forma basis. 

This was attributed to a series of factors including adverse sporting results in which bettors won more than anticipated, group-wide implementation of safer gambling measures, and slower growth than expected in Australia and Italy.

In the US, Entain stated that BetMGM was “continuing to perform well” and remains on track to deliver profitability for H2 of 2023. 

With improvements being made to the BetMGM product – via the Angstrom Sports acquisition – throughout the NFL season and the implementation of single account single wallet, Entain noted that its US brand should deliver at the upper end of the $1.8bn – $2bn of revenue outlined for the entire year. 

Jette Nygaard-Andersen, CEO of Entain, commented: “We continue to see good underlying growth in our online business and are reiterating our EBITDA guidance for the year despite softer-than-expected revenue growth in Q3 and the ongoing roll-out of industry-leading safer gambling measures.  We continue to attract more customers than ever before to enjoy our products and services.  

“BetMGM remains on track to deliver positive EBITDA in H2 and a full-year NGR performance at the top end of our expectations, and we are particularly excited about the product improvements that we are rolling out over the NFL season.”

As Q3 has failed to deliver the expected results, Entain will set out its action plan to improve performance going forward when it next addresses investors in November. 

The group did hint at some actions, which will include a “comprehensive market review” indicating it could leave certain jurisdictions, and cost-cutting via structural changes in the company. 

Nygaard-Anderson continued: “We have made significant changes to the Group over the last three years.  Our focus now is on accelerating the actions we are taking to drive sustainable organic growth, expand our margins, capitalize on the US opportunity and deliver long-term returns for our shareholders.  We remain confident in our ability to deliver on the vast opportunities ahead of us, and look forward to sharing more detail about the changes that we are making alongside our Q3 trading update in November.”