Entain expects next month’s FIFA World Cup in Qatar to boost its digital sales during the final quarter of this year.
The Ladbrokes owner has struggled to boost online revenues over the past year as the loosening of Covid-related restrictions encourages punters to return to their local bookmakers.
For the three months ending September, the group revealed its digital net gaming revenues (NGR) rose by just 1 per cent, despite record customer activity, compared to a 10 per cent increase in retail NGR.
© Provided by This Is Money Difficulties: Ladbrokes and Coral owner Entain has struggled to boost online revenues over the past year due to the loosening of Covid-related restrictions
Turnover was negatively impacted by the firm’s temporary exit from the Netherlands ahead of the country’s legalisation of internet gambling and the introduction of a new licensing regime.
By the end of 2022, Entain expects to restart operations within the Netherlands and complete its acquisition of Amsterdam-based BetCity.
It anticipates this will provide a significant uplift to online trade, along with the staging of the FIFA World Cup between 20 November and 18 December, where England and Wales will both be competing.
‘We have healthy momentum across the business and look forward to a strong finish to the year which includes the World Cup,’ said Jette Nygaard-Andersen, the group’s chief executive.
Further growth is set to derive from finalising its purchase of Supersport, the largest betting provider in Croatia, and the creation of Entain CEE, a joint venture with Czech investment manager EMMA Capital.
Entain has snapped up a host of gambling companies this year, including Avid Gaming, the owner of Canada’s leading online gaming brand Sports Interaction, Polish bookmaker Totolotek and Latvian casino operator Klondaika.
The FTSE 100 firm, whose other brands include Foxy Bingo, Coral and PartyPoker, is the UK’s second-biggest betting business by revenue, behind Paddy Power owner Flutter Entertainment.
But its BetMGM arm, a joint venture with Las Vegas-based entertainment giant MGM, remains the most prominent gaming provider in the US, with a 31 per cent market share.
© Provided by This Is Money Big player: Entain’s BetMGM arm, a joint venture with entertainment giant MGM, remains the most prominent gaming provider in the United States, with a 31 per cent market share
Third-quarter revenues expanded by around 90 per cent from the previous year to more than $400million on account of a ‘successful start’ to the latest National Football League (NFL) season.
Entain forecasts net gaming revenues from this division will climb by over half to $1.3billion this year and achieve ‘sustainable positive’ underlying earnings in 2023.
‘Looking ahead, we remain vigilant of the economic backdrop,’ added Nygaard-Andersen.
‘However, our diversified revenue base and robust business model enable us to remain confident in our ability to deliver on our growth and sustainability strategy.’
By contrast, Rank Group offered a less optimistic outlook on Wednesday, with the Mecca Bingo owner highlighting added cost pressures on its business and consumers.
Even with the UK Government’s Energy Bill Relief Scheme, the firm expects its annual energy bills to rise by about half to £34million this financial year.
Costs have already gone up for food, staff salaries and supply chain issues, while the company is also unable to benefit from any furlough payments or business rates relief as it did during lockdown.
The warning was made alongside results showing Rank’s net gaming revenues grew by only 2 per cent in the first quarter, due to weak trade at its Grosvenor casinos outside London.
Rank Group shares tumbled by 9.2 per cent to 58p this morning, making it the worst faller on the London markets. In comparison, Entain shares were the top riser on the FTSE 100 Index, jumping 4.4 per cent to £11.32.
Russ Mould, the investment director at online platform AJ Bell, said: ‘There’s a saying that during tough times our appetite for betting increases.
‘People feeling the pinch of a higher cost of living or gloomier economic conditions are often prepared to bet the remaining cash in their pocket in the hope of winning big on the horses, football or other sports or games.
‘Thus, faced with the current miserable backdrop, one might expect gambling firms to be raking it in. The evidence suggests it’s not that clear cut.’