Entain’s £585mn settlement with UK authorities to end a probe into alleged bribery at the gambling group’s former Turkish division was hailed by chair Barry Gibson as “the final step in a process that has hung over our business” since the investigation was launched four years ago.

But other problems are hanging over the gambling group and its chief executive Jette Nygaard-Andersen, who is facing a languishing share price, rising regulatory pressure, the arrival of activist shareholders and mounting internal discontent over her leadership.

The Financial Times has interviewed more than 20 current and former Entain executives, advisers and investors who have described growing dissatisfaction with the current leadership.

A polished figure who has helped redefine Entain’s reputation for poor compliance, Nygaard-Andersen has struggled with the day-to-day operations of a bookmaker, especially as revenue growth slowed and regulatory pressures mounted, they said. Some have also called Gibson’s oversight into question.

At stake are the fortunes of the UK-based gambling giant, whose 40 per cent share price slump since August has slashed its market capitalisation to £5.1bn, well below the value of two thwarted takeover bids in 2021.

Over the past two years, the owner of Ladbrokes and Coral, which operates in more than 40 territories including the US, the world’s biggest betting market, has ranked fourth-worst in the FTSE 100 for shareholder returns. This is despite agreeing 11 bolt-on acquisitions at a total cost of more than £2bn during Nygaard-Andersen’s almost three-year tenure.

Three US activist hedge funds, now among its top 20 shareholders, are sensing an opportunity: Eminence Capital, Sachem Head Capital Management and Dendur Capital. Another, P Schoenfeld Asset Management, has a smaller stake. All the activists declined to comment.

One top-20 institutional investor said that Nygaard-Andersen’s “headlong rush into nonstop M&A” as the core business struggled “showed a lack of awareness and general understanding of the economics of the business and shareholder sentiment”. Entain expects the value of its bolt-on acquisitions to double to more than £4bn over the next five years.

Nygaard-Andersen, previously a non-executive director at the company, became one of a handful of female FTSE 100 chief executives when she was appointed to lead Entain in January 2021 after her predecessor quit six months into the job.

The board, believing Entain had a bright future as an independent company, had just rejected an £8.1bn bid from MGM aimed at seizing control of their BetMGM US joint venture, arguing that the offer significantly undervalued the UK group.

Later that year, when Boston-based peer DraftKings proposed a £16.2bn cash-and-stock offer for Entain, a condition for the UK gambling group to entertain a full-blown bid was that Gibson be appointed vice-chair of the joint company and Nygaard-Andersen, a former media executive with minimal experience in the gambling sector, be made chief executive.

DraftKings CEO Jason Robins subsequently walked away from making a formal bid, according to four people familiar with discussions.

Gibson told the FT there was never any formal offer from DraftKings and “there was no discussion about how the company would be run”.

But he had taken the view that as Entain would be the biggest financial contributor to the tie-up, “if we didn’t sort out the . . . key management positions, the thing would never be able to be sold to our shareholders”. He concluded that DraftKings management “were not capable of running the joint company”. DraftKings declined to comment.

A pandemic surge in online betting boosted Entain at the start of Nygaard-Andersen’s tenure but came to an abrupt end in 2022 and was followed by a sales warning in September this year. It does not expect revenue growth to return until the second half of 2024.

Entain has broken from its previous cost discipline. Nygaard-Andersen, who earned £1.9mn last year, lives in Copenhagen at the weekend and travels for work during the week. During the pandemic she and Gibson began using private jets to travel to board meetings in Gibraltar.

As the pandemic receded Nygaard-Andersen continued to use private aircraft, something rarely done under previous management. On several occasions she used a private jet to visit the US, according to three company insiders. Some staff within the finance and audit teams have nicknamed her “Private Jette”.

Entain said she had used private air travel seven times in the past three years for “business-critical reasons” or in the absence of commercial flights to Gibraltar during the pandemic.

UK companies are not required to disclose their leadership’s use of private jets, unlike in the US where businesses on the S&P 500 last year spent an average of $82,698 on private flights for executives, according to data compiled by ISS Corporate Solutions.

Nygaard-Andersen has attended several Grands Prix this year. Entain’s marketing executives late last year recommended that its Partypoker brand cancel its £3.5mn sponsorship of McLaren Racing because it was delivering little return on investment. Following the review Entain itself began sponsoring McLaren. Entain said it would decide at the end of the three-year deal whether to renew it.

Under Nygaard-Andersen, Entain has also leaned heavily on advice from management consultants including Boston Consulting Group, Deloitte and PwC.

Entain’s corporate costs almost doubled between 2019 and 2022 to £91mn. The company pinned the increase on factors including enhanced corporate compliance procedures, a rising wage bill for junior corporate staff and a jump in costs associated with a fast-growing business.

Gibson said Entain under Nygaard-Andersen had “executed a fundamental strategic shift towards regulated or regulating markets, overhauled its governance, refocused its operations and significantly improved its customer offering”.

To refresh Entain’s image, Nygaard-Andersen has pulled the business out of unregulated markets and sought to diversify beyond gambling into other media assets. But investors have accused her of overpaying for acquisitions that she has failed to integrate.

Entain last month closed two businesses it took over in 2021 — US esports platform Unikrn, which it bought for £50mn, and Polish betting brand Totolotek, which was acquired for about £5mn. Other purchases including live score provider 365Scores, bought in April for £120mn, have also struggled under Entain’s ownership.

To fund other deals, Entain in June raised £600mn of equity at a significantly lower price than the 2021 takeover bids. In a public letter, Eminence attacked the “value-destructive” move that had knocked 10 per cent off Entain’s share price. A person close to one of the activists said the board had been “some part naive, some part asleep”.

The company has culled staff. Roughly 300 jobs have gone in the digital operations division in a recent restructuring, with more positions cut across the business. At the end of last year, Entain employed nearly 12,000 people across its online business. Management postponed this year’s annual staff satisfaction survey until the new year because a reorganisation was under way in some parts of the business.

“It’s organisational chaos,” said one high-ranking executive. “Every three months, we’ve had not small re-orgs but big re-orgs . . . we don’t have anybody who knows how to operate — forget about gambling — just how to run an operation.”

Following lacklustre third-quarter results last month, Nygaard-Andersen called a meeting with more than 50 senior managers aimed at calming the restive workforce. But several participants said her performance did little to reassure them.

With its share price languishing at three-year lows — in contrast to its UK rival Flutter which is up more than a third since the start of 2021 — and with MGM playing down the likelihood of new deal talks, Entain is fighting to revive its fortunes.

The company is clamping down on costs and this summer imposed a ban on all but essential travel.

In a sign of their belief in Entain’s turnaround efforts, Nygaard-Andersen picked up £325,000 worth of shares last month, doubling her shareholding, and Gibson bought £870,000 worth of extra stock.

Gibson pointed to Nygaard-Andersen’s role in “overseeing the resolution of the HMRC investigation into the company’s legacy Turkish-facing business, as well as tirelessly navigating the company through a period of huge regulatory change in some of its largest markets” as a testament to her success. But a €3mn Dutch fine last week for newly acquired BetCity shows regulatory problems continue to nag the company.

As the group undergoes a board refresh, disagreements have flared between the activists and the company over the three remaining vacancies, according to four people familiar with discussions.

Several mainstream investors have backed the idea of Eminence founder Ricky Sandler joining the board. “It would lead to enhanced scrutiny and an awareness that management and the rest of the board are under the microscope,” said Julian McManus, a portfolio manager at Janus Henderson, Entain’s fourth-largest shareholder.

Some shareholders argue that Entain’s stock is undervalued. One top-15 investor said the shares were “very cheap for a company that is capable of high single-digit growth and is going to become more profitable as acquisitions are integrated”. They added that “BetMGM is a tremendous asset and Entain remains a potential takeover target for MGM”.

However, tensions between MGM and Entain are emerging over their joint venture, which has recently lost market share. Hornbuckle sees Gibson as an obstacle to a deal, according to people familiar with the relationship.

The MGM boss said the companies had invested “significant capital, effort, and energy” in the joint venture, to which his group was “fully committed”.

Looming large over Entain’s troubles and the activist pressure is the question of whether management changes are needed to rejuvenate the company and tempt back suitors.

Nygaard-Andersen was “only asking for time”, said one top-10 shareholder. “She isn’t actually offering a solution.”