Entain have released their1st quarter results for 2024 and there’s mixed news mainly depending on what part of their growing business that you examine.
When it came to total group net gaming revenue (NGR), there was a 3% increase. That figure includes the 50% share that they own in BetMGM. For a constant currency (CC) basis, group NRG was down 3%.
Gambling is a global business and it’s always interesting to see how results vary from area to area. Entain have shown considerable improvements in the Central and Eastern European part of their business.
Results were strong with NRG up 11% compared to 2023 with the pro-forma basis in use. One particularly good result was achieved in Croatia when SuperSport did well.
Online NGR (not including the US gambling market) saw a 9% rise using the CC basis from the results achieved in the same period last year. However, on a pro-forma basis there was a 2% fall.
That’s even though they achieved an 11% growth in the number of active customers with their sites. When it came to retail NRG, there was a fall of 5% in the year-to-year results, again on a pro-forma basis.
Entain’s largest market remains the UK and Ireland. Results saw a fall of 7% in total revenue but why was this the case? The company says that one of the reasons was regulatory changes and there are more of those on the way that are likely to affect their financial results.
September of this year will see a reduction in the maximum stake limits for online slots. This is something that campaigners have long been calling for due to the dangers of addiction.
There hasn’t been a comprehensive Gambling Act since 2005. The gambling industry has undergone tremendous change since then due to the arrival of the internet and improved mobile phone technology.
From September 2024, the maximum stake for those aged under 25 (an area of concern for politicians and campaigners) will be only £2. For those aged 25 and over, it will be £5. While this may help players, it’s not good news for gambling companies.
Previously, there was a reduction in the maximum stake for the fixed-odds machines seen in High Street bookmakers. This led to shop closures and redundancies taking place. These new restrictions on maximum stakes for online slots are again expected to hurt revenue. It’s not just the fact that the maximum stake will be reduced but the cost of changing the online slots to allow for the new limits. Other possible regulation changes include stricter affordability checks being introduced.
International NRG showed better results with an 8% increase using the CC basis. On the pro-forma basis though there was still a 2% fall compared to 2023.
Problem areas for Entain appear to be Australia, the Netherlands and Germany. The latter two of those countries have seen tougher regulation of the gambling industry in recent years. Australia is also keen to toughen the regulations they impose on gambling companies.
The South American region is becoming important for gambling companies. Entain will be pleased to see growth being achieved in Brazil. That had been struggling but operational enhancements took place last year with better results.
It was a good year for BetMGM, Entain’s joint venture in the expanding American gambling market. There was a 2% increase in NGR compared with 2023. A market share of 14% was achieved in the US sports betting and iGaming market. Last year also saw BetMGM launch in the UK. The brand joined a series of new casinos recently founded in the crowded UK gambling market.
It’s always important for gambling companies to maintain and increase their customer acquisition. Major events in the US such as the Super Bowl in US Football and Basketball’s March Madness saw strong growth achieved.
Another important trading tool is the quality of an app that a company has. Entain have made improvements in this area and they believe this is enhancing the experience that their players have.
Entain don’t seem to be too worried about the slight declines. They say that the Q1 performance is in line with their expectations. The interim CEO of Entain is Stella David. Her view of the Q1 results is that there is “growth reflecting both strong performances in many of our markets as well as known challenges in others.”
While accepting that “there is still more to do,” the interim CEO added that the company is “pleased with the progress being made against our plan to accelerate Entain’s operational performance.
They are “fully engaged” in continuing to build on the momentum they have achieved. This is especially the case in areas such as “delivering operational improvements, product enhancements, as well as greater organisational agility and efficiency.”
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