Entain is seeking to fold its online poker business as it has instructed bankers to prepare a sale of PartyPoker.
According to Sky News, Entain is working with Oakvale Capital on a prospective sale of PartyPoker, as it deems it a non-core part of its business.
Industry sources believe that the sale could fetch around £150 million which would be a much reduced figure compared to the £5 billion that PartyGaming, PartyPoker’s then parent, was valued at when it was floated on the London Stock Exchange in 2005.
PartyPoker was valued as high as £10 billion at its peak however its performance slumped after being forced to exit the U.S. following the passage of the UIGEA in October 2006.
It re-entered the U.S. market upon the legalization of online poker in New Jersey and Pennsylvania however it now sits outside the top 10 of global poker sites, as ranked by PokerScout. It currently averages a seven-day player base of 600.
PartyPoker may not be the only Entain asset up for sale. Other brands including Foxy, Eurobet and Crystalbet could be up for grabs amid a period of poor performance for the company.
Entain has been under fire in the last year over its M&A strategy which led to the appointment of Eminence Capital CEO Ricky Sandler to its board of directors.
In June 2023 Eminence Capital criticized Entain following its $957 million acquisition of Polish sportsbook operator STS, claiming it was not placing suitable value on BetMGM, a joint venture between Entain and MGM Resorts.
In 2023 BetMGM generated $2 billion in net revenue while other aspects of Entain’s business struggled due to regulatory issues.
Entain interim CEO Stella David acknowledged this was the case in a recent earnings call with investors.
“Being fully transparent, it took us…some time to realize just how quickly we needed to feed BetMGM with better product, better customer experiences and better, more focused, U.S.-tailored products,” she said on the earnings call,” she said.
Entain’s shares have dropped by more than 40% over the last year while its previous CEO, Jette Nygaard-Andersen, resigned late into 2023.
No contenders have emerged as potential buyers of the PartyPoker, however both MGM Resorts and DraftKings have been suggested as potential suitors.
MGM Resorts is already in partnership with Entain through its BetMGM partnership and this could provide the opportunity to acquire the technology powering PartyPoker. Meanwhile, DraftKings attempted to purchase the entirety of Entain in 2021 and therefore could potentially be interested in gaining part of the company.
