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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Charlie Horner (00:30.657)
Entain has beaten expectations in H1 trading, benefiting from online growth across key markets and improved UK retail results. Leadership says the business is responding positively to the changed economic reality facing global gambling PLCs, yet the pressures remain clear as Entain's tax burden continues to rise sharply. So today on iGaming Daily we dissect a set of Entain results, which good news is tempered by market realities.
And we ask what comes next for the FTSE gambling giant. Welcome back to iGaming Daily, supported by Optimove, 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 our editor at large, Ted Manmuer, and SBC News editor Ted Orm Clay. Ted how are you?
ted (01:22.946)
surely. Pretty to check out the weekend with obtained results. Glad to be on the pod.
Charlie Horner (01:30.603)
Excellent. Ted L C, how are you?
Ted Orme-Claye (01:33.55)
Yeah, I'm pretty good too, thank you Charlie. It's a big one to round off what's been a pretty heavy results season hasn't it? We've had them all put in and out in the past couple of weeks. Yeah, yeah, the big one. And yeah, yeah, obviously pretty big company to finish off the week with.
ted (01:39.3)
Yeah.
ted (01:43.002)
Holy.
Charlie Horner (01:51.968)
Exactly, yeah. We we've we've highlighted flutter results, we've we've done evoke on the pod, and now it's the turn of Entain. and actually, I think looking through the report when it landed on on Thursday morning, compared to some of the other PLCs out there, I I looked upon the results and thought it's quite a a steady set of results, quite steady as she goes. Entain has delivered a more upbeat set of H1 results compared to some of its competitors.
Ted what what do you think the company's telling the market with that set of results?
ted (02:27.245)
Yeah, I agree with your outlook and leadership is essentially saying that the operational turnaround of Entain at a PLC level is working.
even though this financial clean up is far from finished. Overall Intend delivered an H1 net gaming revenue growth of 5 % on a constant currency basis which stands at 2.7 billion with online up 7 % and the company recording a marginal 1 % increase in UK retail. So these are good top line metrics. Operational Positives saw a beta stand at 480 million ahead of expectations and this is despite a much heavier UK gap.
yet the clouds on performance, there are lots of clouds on performance and Intend is effectively as of this period doubling up its tax exposure to around 70 million per interim. Loss is narrowed to 11.5 million. I think overall the kind of concern here is that the tax...
hit is huge on the bottom line of accounts and it kind of asks whether all this kind of growth and scale what is it for if the commercial net commercial engine is basically undone by economics
Charlie Horner (03:50.734)
Well, that's that's certainly right. And we've you know, we're this is the first real quarter where we're starting to see the impact of some of these tax rises. But as you say, Ted, losses of eleven point four million, but that I think has improved by about seventy five million or something like that. I think there's, you know, f foreign exchange rates that that are sort of primarily benefiting the company there and a few other financial instruments. But but yeah, that's a significant result there. Ted O. C. That
ted (04:06.093)
Mm-hmm.
Charlie Horner (04:19.521)
I think that is one of the key narratives from from the results is is those losses that that have narrowed so much. But also that there is online growth. how how do you think containing sort of achieving both, or do you think one is the result of the other?
ted (05:25.743)
Okay, here I think, or I view that you're gonna stand back and reflect on what the numbers say and what the narrative is. And then Tane is...
attracting higher player volumes on its online brands and leadership cites that this is being met with kind of sharper operations, right? A crucial period for trading was the World Cup betting activity and Entain improving its margins due to cost controls implemented as of 2025. This again helped NGR increase by 7%. Now, one of the things about Entain is that it doesn't help us kind of analyzing when they don't present kind of bottom line figures.
But...
The other thing that we're seeing is that we've got a management which is much more fixed on kind of cost controls and savings. Operationally, Enten is also being helped by the simplification of its business and the reduction in brands. We've started to see this with the sale of the CC unit of SDSS Poland, the Super Sports Croatia to Emma Capital. Now that disposal and the cash received from it will be used to primarily reduce the debt, which stands at about 3.6 billion.
and secure that from kind of 2026 to 2027 onwards. So we're see a significant increase or significant improvement on the balance sheet of Entain. It seems that this is a company that's transitioned from very much kind of bolt on acquisitions to much more of focus on margin protections and cashflow.
Charlie Horner (07:02.995)
It's a real strategic shift from from sort of eighteen months, two years ago, isn't it? Ted, did you want to just add on to something there?
Ted Orme-Claye (07:03.927)
I
ted (07:07.929)
Yeah.
Ted Orme-Claye (07:10.253)
Yeah, I I was gonna say I think you've you've you've just mentioned what I was gonna lead on to their show about this sort of big strategic shift I mean it's one that both Entain and a lot of other companies have been forced to adopt really isn't it's as a result of the market conditions the big ones always being obviously the tax situation Like keeping costs low as possible making sure things as efficient as possible
Yeah, really just gunning for return on investment and so on is just the big task of the day for all of these companies and think Entains results show that very well and they've obviously taken that.
Taking that in the stride, think they've made some the most difficult decisions. I know we'll get into retail a later, but things like closing shops, that's more of a lower level to the really big high level decisions of like what Ted was just talking about there, closing the Central and Eastern Europe Division, well, not closing, a phased sale of that to its joint venture partner is clearly driven by a desire to think like, right, is this worth the costs that we're doing?
They acquired some good brands by doing that but in the current circumstances that they're in, the current landscape that the industry is in, is it worth continuing? And they've decided that in the long run probably not and it's best to phase themselves out of it. think it's kind of, and yeah, just to round off, I it's very reflective of the conditions the industry is facing and the kind of decisions that a lot of people in leadership and management are going to have to make.
Charlie Horner (08:46.775)
Yeah, we're starting to paint a picture of some of the the consequences now of what what is happening in terms of regulation and tax. But that's that's the online side of things, Ted. I'll I'll stick with you for the time being whilst we go through what what's happening on the retail side of things because UK retail betting returned to marginal growth for NTAN during H one. I think it was about a one percent uptick. could you just tell us what's what's driving that improvement? Because from what we're led to believe, retail betting is
Struggling, but clearly not.
Ted Orme-Claye (09:19.969)
So, yeah, Entainer really confident in their retail proposition in the UK by the looks of it. That's obviously the impression we've got from the release on the results and from what Stella David and other leadership and management figures said to analysts in the aftermath of that.
You know if we look at a lot of previous quarters, I think even when Entains retail revenue has dipped It's never been by an insane, you know apocalyptic level. It's always been a Marginal decline I think and then obviously this cut this this half they've seen a marginal increase I think they've been they've been focusing on like revamping some of the shops getting getting the Self-service betting product the SSBT terminal on top
They obviously have closed some shops, obviously some other companies have done as well. We talked the other day about Evoke and how they've done that and that led to a decline in revenue for them, but a bit more of an improvement on profitability. Entain seems to, despite the shops have closed, retain a decent position. We just probably assigned the shops that they closed weren't bringing too much in anyway, so again that links to the whole cost optimization, cost cutting.
priority to maximise profit.
the
Ted Orme-Claye (11:13.387)
thing about UK retail at the moment, I know you guys talked about this on a podcast the other day, obviously the whole situation around Aim to Permit, something like that isn't really going to be bothering Entain too much I don't think because they are, at least in my opinion, they are not going to be focused on opening new shops, they've been closing them, they're focused on just maximising what they've got, maximising returns out of what they've got and erm...
and yeah, they won't be too bothered about expansion. They've got a huge retail estate, they don't need to expand more. The people who need to be worried about that are smaller UK retail companies or new entrants and so on who might be hoping to gain more real estate there, who might now be getting blocked by councils. So yeah, on that front, Entain probably aren't too fussed.
Charlie Horner (11:55.491)
Sure.
Charlie Horner (11:59.928)
Yeah, absolutely. Look well, I I said at the top of the show, Ted that, you know, pretty good set of results. I think people will will generally be happy amongst leadership with with the results that Entain have published during H1. But just before we go to a break, do you think it really is a time for for celebration amongst investors? particularly when Entain is a is a still a loss-making entity. I know that the the share price
Perform quite well in the aftermath of the results being published, but you know, in in the grand scheme of things it's still a loss making business. What what do you think?
ted (12:31.758)
Mm-hmm.
ted (12:39.759)
For intent investors, I think that there are signs of positivity there and there's an improvement, clear kind of visible improvement under the tenure of Stella David. I think that she is responding to kind of those or she is fixing those previous liabilities of former management.
Again, when we can point to the losses, we'll join the club in Tain. It's the same across the board. However, their kind of bottom line at 12 million is dramatically better than last year's deficit of 85 million.
And I think that there are kind of revisions there. One of the things that again, I want to kind of highlight is that the cash and debt management of Intain seems to be in a much better platform via the CEC unit to Emma Capital. And that's the project valued at two billion. So that's going to take down a heck of a lot of debt from the company. One of the things to watch out is that finance or management maintains
kind of this key target of generating 500 million from cash flow by 2028. I think that's a bit optimistic in terms of where the kind of current economies are for the global gambling sector that might be revised down. However, I think that the true judgment of Entain will come come 2027-2028. You know how competitive is it amongst
Global Gamings pack and how better off it is, is it for these changes it's undertaking at the moment. This is a long story and I think we're just at chapter one.
Charlie Horner (14:28.931)
Yeah, I I think it's it's it certainly is. I think it's a business that is has been on a journey, as you say, in terms of changing that strategy. It it felt like eighteen months, two years ago it was a business that didn't really know what it wanted to be with with that bolt on strategy, but it's now clearly a company that knows what it's good at and and is is sort of doubling down on those on those markets. And talking of markets, we'll go to a quick break and we'll come back and we'll bring some individual markets into play.
ted (14:39.864)
Thank
Charlie Horner (15:00.257)
Welcome back to iGaming Daily. We're putting Entain's H1 results under the spotlight today. Ted O. C., I said before the break that we'll bring in individual markets now. where do you think Entain is targeting its strongest growth and market share gains? We we know that it's probably not going to be the CE region, but but where will it be?
Ted Orme-Claye (15:21.997)
I mean obviously the boring answer to start with just because everyone knows this I guess is that you know the UK is always going to be a top one for them due to Ladbrokes and Correll's position here that goes without saying despite the tax increases it's always going to remain a big one it's just historically it's most important
So yeah, so they're just going to carry on looking at how they can retain what they see as their top position in retail there, continue carving out space in online, particularly, I guess, online betting, given that that's the one that doesn't have the same sort of tax burden online casino has. But if we look, I'm going to go a bit more internationally. think something I've had, I might have come to you on this one because you might be a bit more familiar with it, because you're more familiar with the Latin American markets than me. But it does seem like they're quite interested in Britain.
Brazil. That was mentioned a few times on their call. It was mentioned a bit in the report as well. I think that they see some really good prospects for the sporting bet brand there, which I do find quite interesting given the kind of changing circumstances in Brazil right now, you know, with the government looking at tightening regulations up. President Lula's administration is getting increasingly frustrated with betting and
ted (16:56.525)
Yeah.
Ted Orme-Claye (17:17.025)
the biggest overall. Both European brands, Entain is a big European company with a lot of experience of international operations so they're probably looking at applying that to Brazil and growing there. That was one of the ones I noticed and that was quite interesting.
ted (17:32.816)
Yeah, I mean, as always, a lot of chatter in Brazil. Leadership is kind of presenting that.
Entain has a very strong kind of secondary market presence and by that they you know, they pointed to Spain Getting a 28 % increase real kind of strong engage World Cup engagement there for for the B1 brand Australia was detailed has gotten very pleasing and it's a 13 % NGR of Neds and Nadbrokes and that's against the real kind of slowdown from competitors
Management is kind of viewing up kind of new market, new market entries. wouldn't necessarily put kind of Canada in this context, in this bracket. The one big one they're looking at and that's gonna come with a commitment to investment is New Zealand. That's in the pipeline when it launches this kind of online casino framework. Again,
Secondary markets are becoming more important to and part of the reason that is because they're seeing kind of a slowdown out of BetMGM, the joint venture that yeah, it's turning towards kind of profitability, but it's kind of not necessarily going to hit its top end guidance. And overall, this is actually quite a positive for Entain because in previous years, the narrative has been America and BetMGM
are the only kind of growth vertical of this business, whilst the rest has remained stagnant. There is a change there.
Charlie Horner (19:06.337)
Yeah, and it's it you know, it's it's a good de it's a
It's a good job that N Tane didn't invest so heavily at the time in BetMGM, considering, you know, some of the t the the slumps that we're seeing in the US. And I think competitors like Fanatics and Bet365 are are sort of very competitive with BetM GM in some of those US states now as well. Ted I'll I'll stick with you for for the moment. leadership does continue to invest in technology.
product development and some of those core brands that we're talking about. where are we starting to see those investments become visible within the the the H one report?
ted (19:52.332)
Okay, this is again underlined by leadership as a point of diversification.
We've seen kind of two years of what NTEN calls Project Roma, know, high investment over a hundred million. And this is in terms of integration of key platforms and the build out of key systems, primarily for sports betting and primarily focused at the bet MGM joint venture. However, I think as of 2026, it's being extended across the network and where it kind of saw gains was during kind of World Cup trading. So a lot of kind of those competencies were transferred to new brands in the European kind
roadmap there. So that was a gain for them. The other factor here is that with the sale of Entaince E to McAmperthal, some of those processes will be again focused on the advancement or rebuildable technology for its other brands, especially kind of in markets that are yet kind of under development. So think a sporting bear in Brazil will gain from that.
One thing that I think Entain is bringing to market is that it's got kind of much more clarity now than it did two years ago on its technology roadmap and what upgrades it wants to improve at. It's in terms of...
Very much so in terms of securing kind best ROI in marketing, improving kind of player retention. And actually another factor is that I don't, I think in previous years, there's a concern of Entain with such a big brand portfolio kind of cannibalizing its player base between brands. I don't think it's doing that anymore. It's a lot more kind of sensitive or sensible about how it applies resources and funds.
Charlie Horner (21:46.882)
Yeah, it goes back to to what I was saying just before the break. It seems like it's a it's a business that knows what it's doing now compared to maybe two or three years ago where it it it it didn't quite know what it wanted to do. we we've been quite positive about Entain so far on on on the programme and I don't want to I don't want to be, you know, bring the the s the clouds of doom onto the show, but you know
ted (21:54.637)
Yeah, yeah.
Ted Orme-Claye (22:09.684)
Ha
Charlie Horner (22:11.703)
We've got to remember that this is this is still a an industry in transition. We're dealing with a lot of challenges in in the in the industry right now. Ted O C what businesses or markets remain sort of problem areas for Entain and and where do you think management still has sort of work to do or progress to make?
Ted Orme-Claye (22:32.365)
Problem areas I don't want to keep bringing it back to the UK But we've got to remember that this new tax regime is very we're in the very early stages of it You know it only came into effect from April so they've got an entire court You know we would have spoken about entains Q1s and this podcast back in them
Well, it probably would have been about April time, wouldn't it? But those were not affected by this tax regime. The Q2s, obviously half of this H1 have been. I think it'll be interesting to see at the end of the year when we start seeing what Q3s are like and eventually next year when we see what the full year is like, just how big that impact will be. Obviously they seem to have ridden out well at the moment, but...
you know it's always just one to keep in mind that we've not fully seen the impact of it yet. You know in Brazil as well they do see some prospects there but
ted (23:38.958)
Yeah.
Ted Orme-Claye (24:03.971)
be a tough task to recoup that initial loss that they made this year there and then keep expanding but know fair play to them they seem to have a plan for it.
Charlie Horner (24:16.141)
Sure. Ted
Ted Orme-Claye (24:17.325)
In terms of other ones that decline, mean, we talked about Australia earlier. Again, that's been a really good one for them, undeniable. But we've got to remember as well the regulatory transitions that are taking place in Australia at the moment. And it's going to be a bit of a crossroads moment, I think, between whether this will be a good thing for Entain because all the companies there are going to be obviously subject to these same advertising restrictions. That could mean that if Entain is able to think outside the box a bit and they could look at how
to take share off the companies who are going to lose visibility, even if they're losing visibility themselves. It could also mean they risk becoming victims of someone else being able to pull that off. So Australia is going to be quite an interesting one to keep an eye on as well. Sorry, Charlie, carry on.
Charlie Horner (25:03.681)
No, no, not not a problem. It's good to get a an overview of where the challenges are as well as the the successes. no surprise to see the UK as, you know, Europe's problem child market there sh coming back to to bite us. let's bring things towards a close now. Ted I just wanna to to ask you really, because this is the third major PLC operator that we've mentioned on the podcast in the last week with Flutter and Evoke.
But there's been other companies that have reported their H ones and and Q twos as well. Where are you where are you positioning Entainer amongst global gambling's listed operators right now? What what do you think it's getting right and maybe getting wrong as well compared to some of its competitors acros across a lot of these global markets that we've been reporting on?
ted (25:53.136)
So, on reflection of H1 results across the board, and it's only fair to say that Entainer are on the same boat as everyone else in terms of its current exposures and the adjustments that it must undertake to see this period of significant headwinds through, but then...
There are, as you were saying, many positives. And, you know, one can argue that Entain, to a certain degree, is navigating these headwinds, you know, clearly better than other PLCs in terms of its UK performance, in terms of actually implementing effective kind of cost controls and, you know, lowering its debt.
This is going to be kind of a crucial period, crucial H2 period for Entain. I believe that what investors want to see is real kind of strengthening of its balance sheet. And again, it's kind of done that by like really narrowing on losses. If we can repeat the same trick for another quarter or two, I think that's a positive. It's been a
a period where, you know, as journalists, we try and like focus in and zoning on narratives. And I keep on going back of to the relationship between the investors and the management and the leadership. On a very big positive here is that I feel that coming off the call, coming off kind of these investigative analysis and these notes handed to us that the trust seems to be kind of reemerging.
and coming back under the tenure of Stella David, who is fixing these kind of long-standing liabilities. I think that, you know, many, many of these vets should keep their faith in Entain, but...
ted (28:00.112)
There is a lot to play for in a period of like changing times for PLCs and overall which company will change the current order of the PLC ranks beyond 2027. It's an exciting time, yeah.
Charlie Horner (28:19.819)
It is, yeah. I think so far so good. The the company's return to stability. But yeah, as you said earlier, Ted, I think there's a story that's far from over and we'll continue to monitor this over the next twelve months as we we we sort of see the scars of the the new tax regimes and and some of these regulations across markets and we'll we'll see how investors react to that. But for now, Ted, Ted, thanks ever so much for joining me today. Thanks to Optimove for supporting the show as always.
And to our listeners, thanks for tuning in to today's episode of our gaming daily and come back tomorrow to keep up to date with all the latest global