Entain Reports Strong Q3 After UK ‘Tax Raid’ Scare
Online gambling giant Entain [LON: ENT] upped its earnings guidance following a better-than-expected Q3. It’s a silver lining in a week when the company’s shares took a big hit over news that the UK government was planning a “tax raid” on the industry.
Entain’s new CEO Gavin Isaacs, above, described the company as “a very good business operating in a highly attractive global industry,” but warned that a possible tax hike by the UK government would cost jobs. (Image: Entain)
The Ladbrokes parent, which jointly owns BetMGM in the US with MGM Resorts, said in an earnings call on Thursday that group EBITDA (earnings before interest, taxation, depreciation, and amortization) for the year was now expected to be toward the top of the £1.04 billion to £1.09 billion range.
BetMGM’s net gaming revenues were up 18%, with “good double-digit” growth in both online gaming and sports betting, with the latter vertical growing faster.
In the UK, Entain saw 6% growth in its online operations, which was driven by casino gaming. Sportsbetting was flat, the company said.
Other highlights included strong growth in international markets, including Brazil. Total group net gaming revenues were up 8%.
Turbulent Times
“My first few weeks as CEO of Entain have reaffirmed my view that this is a very good business operating in a highly attractive global industry,” said Entain’s new CEO Gavin Isaacs.
“Entain has great brands, an enviably diverse global portfolio, and is bursting with talent, ambition, and opportunities,” he added. “Entain is already on a path of strategic and operational improvement, with the strong Q3 performance demonstrating the progress achieved so far.”
Isaacs was brought in to steady the ship at Entain, which has seen a turbulent couple of years culminating in the resignation of previous CEO Jette Nygaard-Anderson in December 2023.
Anderson’s tenure toward the end was beleaguered by internal unrest as activist investors increasingly took positions in the company and criticized its strategic direction.
Investors Wait for Clarity
While analysts at Davy described the latest update as “positive,” with shares rising nearly 5% on Thursday, they stressed that investors will probably prefer to wait for some “clarity” from the UK budget, which is due October 30.
Entain’s shares fell as much as 14% on Monday over news that Britain’s new Labour government was contemplating raising taxes on the industry to plug a £22 billion (US$28.7 billion) hole in the nation’s finances.
One option on the table involves extracting an extra £900 million (US$1.2 billion) to £3 billion (US$3.9 billion) in taxation from the gambling sector, according to The Guardian.
“Punitive tax increases would have a materially detrimental impact on the economic contribution of the wider industry, putting at risk thousands of jobs [and] funding for sports and racing, as well as benefitting the black market,” Isaacs said.
The post Entain Reports Strong Q3 After UK ‘Tax Raid’ Scare appeared first on Casino.org.
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