EGR Power 50 2021: 2. Entain
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2. Entain (3)
FINANCIALS: Online NGR climbed 27% YoY to £1.6bn in cc during the first half of 2021. Full-year EBITDA is guided at between £850m and £900m
STRATEGY & IMPACT: M&A is in Entain’s DNA, with bolt-on acquisitions used to enter new markets and verticals. The foray into esports betting, VR and casual gaming is an interesting play
GEOGRAPHIC REACH: A major operator in the UK, Australia, Italy, Germany and the US with BetMGM. It is the leader with Sportingbet in the regulating and potentially huge Brazilian market
INFLUENCE & LEADERSHIP: Few can match Entain for its portfolio of brands across all verticals. Jette Nygaard-Andersen has been more than just a safe pair of hands after Shay Segev’s exit
Consistent and annoyingly good. That would be one way of describing Entain after the London-listed operator took its run of double-digit online growth to 23 consecutive quarters as Q3 online NGR rose 10%.
Excluding Germany, NGR was up 18%. To save having to do the maths in your head, this incredible growth streak stretches all the way back to the beginning of 2016, around when the bwin.party purchase was completed.
At the time of last year’s Power 50, Shay Segev was at the helm following the rebrand from GVC and departure of Kenny Alexander. However, Segev suddenly resigned in January, just six months after his promotion to CEO. His chosen successor was Jette Nygaard-Andersen, at the time a non-executive director of the group, yet it was quite the baptism of fire for the Dane amid MGM Resorts, the other half of the BetMGM joint venture, seeking to buy Entain.
In the end, MGM abandoned its pursuit – for now – after its initial $11bn bid was rejected. Entain, however, ploughed ahead with its tried-and-tested M&A strategy, first with the bolt-on acquisition of Baltic operator Enlabs and, later in the year, with the purchase of Seattle-based esports betting platform Unikrn. Entain clearly sees esports betting having a huge runway for growth as the firm expands beyond the traditional bookmaking sphere.
What’s more, Nygaard-Andersen insists Entain’s TAM is set to triple to $160bn, primarily due to the US opportunity. Now live in 16 US jurisdictions, BetMGM has gone from strength to strength in the past 18 months and disrupted the hitherto sports betting duopoly. According to Entain, this prized asset stateside has seized a 26% share of sports betting and is the leader in igaming after cornering almost a third of the market in the three months to August.
Closer to home, Entain’s Eurobet and bwin brands have made gains in post-pandemic Italy, although struggles in the German market look set to be the new normal. Entain also forecasts an EBITDA hit of around £5m per month from being shut out of the Dutch market. This, combined with unusually high sportsbook margin of 12.8% in Q3, explains why the double-digit online growth streak is set to run out of steam in Q4. Furthermore, Entain was recently the subject of a proposed $22.4bn bid by DraftKings. Talks collapsed, so could MGM make another play for Entain? You can’t rule it out.