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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
It never rains, it pours. Oh, so it feels that way for Entain, who has had another share price blow this week after its third biggest shareholder announced it will be closing down. Eminence Capital holds 6.5 % of Entain's shares, but is looking to return cash to its shareholders by the summer, which sent Entain's stock tumbling. Having dipped 26 % in 2026 alone, what does the future hold for the Ladbrokes and Coral owner as it seeks to instil confidence back in the market?
Welcome back to iGaming Daily, supported by Optimu, the creator of positionless marketing and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner and today I'm joined by SBC News editor, Ted Orme-Clay and making his debut on the show, I'm joined by SBC News reporter, Patrick Killeen. Ted, how are you? Yeah, pretty good. Thank you, Charlie. Yeah, still quite buzzing after...
Luke Walters (01:27.726)
Well, But yeah, glad to be on this podcast for Patrick's debut. He's wrote a pretty solid article about this. Quite interesting news, so yeah, looking forward to getting into it.
Thanks for making your final appearance on the podcast, Ted. Patrick, it's good that you've joined us today. You'll be stepping in for Ted from now on. How's things? Yeah, they're good, mate. Yeah. Happy to be on here. And it's always good to have me editor to go toe to toe with for the first time being on here. Fantastic. Well, Patrick, you wrote about this story, as Ted mentioned. So how about you just give us the overview here? Who is Eminence Capital and what position do they hold in Entain?
Eminence have been an investor for the entirety of the 2000s. They were founded in 1999, built its reputation on long-short equity strategies and they were understood to hold roughly 6.5 % of Entain, which would make it the company's third largest shareholder.
Eminence announced over the weekend, think it was that they'd be winding down. It's founded by Ricky Sandler, who is a non-executive director at Entain and he's still listed as one on the Entain website. And it manages around reports between six to seven billion dollars worth of funds. So it's expected to return at least 75 % of investor capital by the end of the summer around June-ish. And it's announcing that
it was winding down has caused a bit of a tumble in Entain shares likely to be because of supply maybe out doing demand a little bit. Yeah, Ted Patrick's outline there the impact that it's having on Entain share price. I guess guess the follow up question to that is what why is Eminence closing down? Do we have any detail on that? And could you give us a bit of an overview of how much?
Luke Walters (03:31.067)
Entain's share price has dipped because of this move? Well yeah, obviously Patrick broke this yesterday. was from a, I believe it was a letter initially, seen by Bloomberg I think, for the first to come across it. Obviously Patrick broke it on our site. Like I said, Entain, I mean Entain, their shares have been up and down a lot lately because of various different factors. If I'm just gonna get their shares up now because of the...
I mean today they've actually kind of recovered by the looks of it which is good for them I guess. Yesterday they were down from, let me have a look, a peak of... I believe you actually... Can I start this again, sorry Charlie, because I've missed some of the key details here in my ramblings.
Where did you write this in the article? sorry. I'm part of it. They dipped to the mid-550s. Yeah, OK. Right. Found it. Thank you.
Luke Walters (04:34.483)
Right, yeah, as Patrick mentioned, this announcement did initially have a bit of an impact on Entain's shares. They were down as of midday yesterday. They were down 7 % to 557.4 pence on the LSE. The reasons for Eminescence closing, we didn't really delve into this too much. This is what we saw from some initial reporting by Bloomberg.
They are very interesting company though. I was kind of surprised to see this come in. Patrick came across it yesterday and obviously brought it across the desk. They're a company who, like he said, had quite an extensive strategy of investing in some really high profile firms over the years. Entain's one of them. They've got some other interests in gambling too. They've also had stakes in Amazon and Salesforce.
they're no strangers to the big hitters in a lot of different industries. So I think for a lot of people who follow the stock markets, this might have been a bit of a surprise. Maybe it wasn't for some more specialist people, maybe it is more for a layman like myself. But yeah, we initially saw this take a bit of an intense shares on the LSE, take a bit of a hit as we've said. Today they have rebounded a little as these things often tend to do.
like Patrick said, it's probably to do with the supply and demand side of things. This is far from doomsday for Entain, but I think it does paint a bit of a picture maybe of what we've been seeing so far this year and what we're probably going to see throughout the rest of it, which is a lot more volatility in the betting industry stock markets as a result of people...
sort of shifting strategy a lot given a lot of the regulatory conditions we've got and a lot of the financial conditions we've got across a number of different markets, many of which Entain is active in. Yeah, we'll do a much more of a deep dive into the financial and regulatory picture in the back half of the show. But Ted, we should probably talk a little bit about the history of Eminem's capital and its relationship with Entain because it's not always been smooth sailing. I think it's fair to say. Ricky Sandler, the lead of
Luke Walters (06:54.939)
Eminence Capital. As Patrick mentioned, an NED at Entain. At least he will be for foreseeable future until the business closes down. But we should remember that Eminence was quite a big critic of Entain a couple of years ago, particularly when it executed its &A for STS Group in Poland. I guess, you know, this is, it's significant that they're
winding down its investment in Entain because it's been quite an influential and vocal shareholder, hasn't it Ted? Yeah, I mean, obviously, to clarify that it's not just winding down its shares in Entain, it's winding down overall. And to correct myself from earlier, we have actually, we have got a bit of a glimpse into why they've done it. In Sandler's letter, sorry, I missed this in my notes, he just said that he felt that they've fallen short of our very high standard and their investors' expectations.
So there you are, sorry to our listeners there, I should have mentioned that earlier. We have got an idea of why they've decided to shut down. But yeah, you're right, Charlie. The STS development was quite an interesting one a couple of years ago, because that was at a time when Entain were really pushing globally, or globally, internationally, whichever way you want to put it. At that time, Central and Eastern Europe was quite a big one for them. mean, the acquisition of STS in Poland wasn't too long in the grand scheme of things, since they acquired Supersport in Croatia.
that obviously formed the foundation for what we now know as the Entain CEE division, which is a pretty significant part of the company. On the face of it, the acquisition of STS, what was a pretty, you could see it as being quite a smart decision because STS is the leading bookmaker in Poland, which is pretty big market in its own right. Obviously a country with a lot of sporting interests, big passion for football.
a growing economy, an increasingly significant economy in Europe. So acquiring the market leader in there would seem like a smart move. But I think a lot of stakeholders at the time, Eminescence, were, Eminescence, sorry, weren't entirely happy with the amount of money that had been spent on it and the impact this might have on the company's expenditure for that year. So that was quite a significant kind of
Luke Walters (09:18.941)
falling out of friction that Entain had between itself and some of its investors, headed up by these guys, in particular, there's one more vocal voices. So yeah, so you're not wrong, know, it's quite significant of the loss of this shareholder, one who has featured quite prominently in some of the headlines around Entain and our industry over the years. Sure. Patrick, we'll go back to your reporting now, if you don't mind. Ted said that...
Ted said that Eminence has... We've both done it. Ted said that Eminence has investments across the gambling sector. Could you just give us an idea of some of the other investments that it has in its portfolio and tell us a little bit about the size of those investments and whether they sort of level or equate to the investment in Entain. Yeah, so its investment in Entain, is reported to be around 6.5 %
is, I mean, is for that one of its biggest investments in gambling. However, this is, it's got a similar sort of stake in DraftKings in America. it's reports say that it has around 8.4 million shares in DraftKings, which equates to around $290 million worth of DraftKings. The difference between its stake in DraftKings and Entain is that DraftKings has
higher of a market cap than Entain. Entain's hovering around the three and a half billion mark at the moment, is one of the, whilst it's still on the FTSE 100, it's one of the lowest valued companies on the FTSE 100 at the moment. Whereas DraftKings is looking at around $11 billion worth of its market cap. That's how much its market capitalisation is. So there's a, that's not really
affected this announcement's not really affected DraftKings it's also reported to have a small investment in Flutter Entertainment albeit a lot smaller than its investments in Entain and in DraftKings so whilst you know its closure might have pointed towards a slight dip in those two it looks like Entain's taken the brunt of the hit for the PLCs which it's the gambling PLCs at least which it's invested in. Yeah significant
Luke Walters (11:46.183)
gambling investor that seems to be coming away from the market, might have a few concerns in the industry. But Ted, Patrick will take a quick break and then we'll break down what this might mean for the sector.
Welcome back to iGaming Daily. I think it's fair to say that it's been a tough year for gambling shares in 2026. Some of that is industry specific, some of that is much more macro. But Ted, how about we'll start off with you on this one. What picture can we paint of not just gambling as a business, but sort of investor confidence in gambling?
I think investor confidence has probably been shaken a bit this year because like you said, Charlie, it's been, I mean, God, only, you know, we're not even five months into it and it has been a tricky one. We always knew it was going to be a tricky one though. I mean, if we just look at companies like Entain, Entain really is a UK and Ireland facing business first and foremost, I think really, it's fair to say. That's obviously one of their core leading markets.
In the UK, we've got the topic we've talked to death on this podcast, but alas, we've always got to mention it. The tax increases in April, they're expected to have a huge impact on the market there. That's definitely going to shake some investor confidence in returns that can be got from the industry. Further afield, know, Brazil launched on the 1st of January, 2025. That market exploded in value as a lot of us expected it to do, but...
It's what wasn't expected was how quickly a political backlash would come against it and the political frustrations around it. That's led to a new tax framework coming into effect. It's not yet, I don't think, but by 2027, the rates there will have gone up. So you might have some investors looking at that and thinking, well, that's happened quicker than we thought it would. That's not going to look great for returns.
Luke Walters (13:50.843)
just regulatory conditions across the board, across a lot of different markets, clamping in on advertising, that's going to be expected to hit revenue. And then the other thing to factor in is, of course, the predictions in the US. you know, this was something that some speculation we've seen around Flutter's stock earlier in the year. There seemed to be a bit of a sense from some investors and analysts that they felt Flutter wasn't quick enough to get involved in the prediction space and maybe been beaten to the punch by some other companies, namely, Fanatics and
funnily enough DraftKings, obviously we've mentioned today as being someone who eminence of a stake in as well, quite a significant stake in. So yeah, so I think for a lot of investors, they're probably looking at it and thinking a safe bet, if you pardon the pun, would be not to get as heavily involved in it this year to look at other sectors. But we are seeing some people maybe looking at this as an opportunity to get in on some stocks while they're cheaper.
and see it as more of a long-term play. Something that Patrick and I have been monitoring a fair bit lately is some of the stuff going along with Flutter's shares. Kenneth Dart has increased his shareholding to become, think, Patrick Crick from Wrong on This, I think he's now the largest stakeholder in the company with something like well over 20 % of stock.
Parvis is it is that what they're part of us? Yeah, Parvis investors have also doubled their amount the amount the amount of stock they have in Flutter as well So even though I think across the board there might be a bit of uncertainty there's clearly some people who see this as a chance to get in on a sector which Will always be there in some form or another Patrick let's let's bring yourself in here. You know you've been reporting on this sector for for a few months now How are you what sort of sense are you getting about you know?
investor confidence in the sector? I think it's a bit of an anomaly really when you look at it compared to global markets. I mean, we've seen over the weekend in mainstream media that the Bank of England is warned about the fact that global markets are so high at the moment. But if you, I mean, just take the companies that Eminence was invested in, all of those are down significantly in the last 12 months. I mean, entailed by I think between five and 10 percent.
Luke Walters (16:10.791)
think flutters down by around 50 % in New York and DraftKings by about 30 on the New York NASDAQ exchange. And that's not dissimilar. mean, we've seen companies across Sweden like Regtech, Bettson, Evolution, despite, you know, maybe since they IPO'd have increased in the last 12 months or so with so many oncoming headwinds in the industry, the gambling industry seems to...
be the one that's become the fall guy really in the market. You know, we don't monitor everything as closely as we do with the gambling PLCs, but it always seems to be, it doesn't seem to be, well, these shirts are flying. You know, since I've come in and reported on it, there seems to have been a downturn in performance for gambling PLCs.
know, Evoke is the one that's kind of risen in the last few months after, you know, sale rumours, but I mean, you take that 50p per share offer from Bali's Intralot and their shares are still trading around the low 40s. So it does kind of signal a lack of confidence and, you know, it's all speculation, isn't it? But I'm not sure what there is to do to kind of, you know,
sway investors that these companies are going to be on the up in months and years to come. Yeah, I think we're certainly past the peak point of gambling stock prices as they were between 2021 and 2024, aren't we, Ted? you know, Patrick says that the stock markets are doing quite well generally, but we can't forget that there are significant macroeconomic happenings in the world right now, which
which might again shake investor confidence. Obviously we're not experts in global conflict or anything like that, are we Ted? do you think this is something that will continue to impact gambling as we move forward and not just conflict, but other economic trends? Let's take the UK for instance, national insurance rises and...
Luke Walters (18:36.711)
and things like that. Do you just think there is a sense of a lack of confidence amongst the investor base? Yeah, probably. mean, you you talk about national insurance and so on. Like if you just look at the taxation side of things, that's going to be in effect for a while. Maybe eventually some governments will reverse their decisions. Maybe there'll some changes in government. yeah, politicians will come in who are more favorable of low tax or something like that, which would obviously be...
better for the companies outlooks and so on and therefore investors but yeah for the long run it looks like these taxes are going to be set in. You've also got to look at the macroeconomic kind of condition that you've mentioned, the fact that times are tough for a lot of people and a lot of people don't have disposable income which is a sort of thing where you might be like, I've got a few quid spare, I'll put an accumulator on this weekend or we've got the money to go and have a day at the races or something like that.
Yeah, when you see the same impact on things like the hospitality industry where I've been reading a lot lately about how, especially in the UK, how much of a dire situation that is in. There's all these knock-on effects from the global conditions we've got at the moment. You've got a lot of countries that are looking like they're going to into recessions. It's not good for the general population. As a result of that, it's not good for businesses. I think in the long run, I guess the best thing that companies can do to prove to investors that they're...
that they're a good bet is to just grind it out in these conditions and show resilience. if you come across, if you come out of it in a decent position on the other side, people will look at you and go, okay, they've proven themselves. can be, they're a decent investment if they can get through all of this. But yeah, the macroeconomic conditions, like you said, I'm no geopolitics expert, I'm no economic expert, but.
You don't need to be that to see that things are difficult for a lot of people at the moment, whether that's the consumer or the company. Yeah, indeed. Let's bring things towards a close now because I think we've had a lot of doom and gloom there. But are there any positives that we can take for the global gambling sector right now? And as we're starting to see operators report their Q1s, are there any glimmers of hope that we can take as we move?
Luke Walters (20:57.295)
into this sort of new era for gaming. Ted, do want to take this one first? Yeah, I mean, you you've got you can have a few a few decent good examples for the industry. mean, you know, we talked earlier about how there was the big explosion in stock prices and so on a few years ago. think a lot of that was probably tied to the fact that at the time the US industry was new and flashy and growing a lot. That that that market, although set of markets, obviously now matured quite a bit and they've got the
the added dynamic of the predictions. But the US is still a pretty formidable sector and we're seeing more, we're seeing states continue to launch, we're seeing some companies finding their way there. Bet365 obviously continues to expand across the US. certainly for the American betting side of stuff, there's that. There's still a lot of talk about prospects in Latin America. Sure, Brazil might have hit a few stumbling blocks, but.
for a lot of European companies that have been struggling lately. Patrick actually wrote a very good article not long ago about how a lot of firms on the Stockholm exchange have been struggling lately. And we think that's because a lot of them are European focused, first and foremost. For a lot of those, looking at the Americas will provide a good bulwark against that. And then guess if we just look at some very specific sectors.
We've mentioned this on the podcast before, retail betting in the UK was excluded from those tax hikes. The ones this year have just been on online betting. The next year we'll see the increase in general betting duty. But again, the retail sector has been excluded from that. So that might provide a bit of relief for that space, which has been struggling for a few years now, obviously, particularly since the COVID lockdowns.
And then maybe some other examples would be like Finland launching next year. That's a new market for the industry with a quite, you know, a wealthy country with quite a strong passion for sports. There's a couple of uncertainties still around what the regulatory situation is going to be there and some things to do with advertising. But still, if that launch as well and that will provide, you know, a good boost for the sector. So we've got a few cases here and there. It's not all doom and gloom.
Luke Walters (23:13.587)
Great. Patrick, where do you see sort of the shoots of hope for the sector as we carry on through 2026? Yeah, I think mirroring really what Ted just said, especially with retail with the, you know, Ted, correct me if I'm wrong, but they are not subject to, retail is not subject to the same taxes as online betting. So, Entain
they're associated with labrooks and coral and you'd be hard pressed to find a high street, one in every two, one in every three high streets in the UK without a labrooks or a coral shop. Is there chance to leverage that and kind of revive retail betting? We know from statistics that it's slightly down year on year, but Entain's been resilient. I mean, even in its online performance, I think in the UK and Ireland was ahead of expectations.
in its Q1s, I think grew about 13%. know, Bally's have kind of a little bit of a track record already of turning these physical betting companies, you know, like the Star, turning them around a bit, trying to revive them. Can they do the same with Evoke and William Hill? So there's still a bit of optimism for the industry. I mean, you've got the World Cup coming up. That's going to absolutely, I don't think Ted mentioned that, but that's going to be...
know, massive for revenue at least, especially with the American markets as well when you've got the opportunity to introduce even one of the biggest, probably the biggest sport in the world to half of the globe. So there's opportunities definitely across the pond, there's opportunities for companies still here. it's not like, you know, we're not saying the gambling sector is absolutely on its knees, but there's...
there's still a chance with retail opportunities, with massive sporting events coming up for a little bit of a revival. yeah, don't... Entain's already shown resilience in his Q1s. Whether the UKs, know, whether it's fellow UK listed companies will do the same is yet to be seen. You we've got a lot of Q1s coming up. So maybe the sector will...
Luke Walters (25:38.675)
kind of surprise a few people by reporting some positive results and that would be some start to a year which while it's going to be burdened by tax increases across Europe, there's a lot of opportunity in 2026 with the amount of sporting things at least going on. Well it's nice to end on a positive note and we'll take that positivity with us throughout the rest of 2026.
Ted, thanks for joining me as always and Patrick, thanks for coming on and I'm looking forward to having you on the show again. Thanks to Optimu for supporting the show and to our audience. Thanks very much for tuning in to today's episode of iGaming Daily and come back tomorrow to keep up to date with all the latest global gambling news.