Shares of the global gambling group Entain (ENT.L) popped more than 7% after posting record-breaking trading results for the first quarter.
Entain’s standalone Group Net Gaming Revenue (NGR) increased 11%. Including its 50% share of legal sports betting operator BetMGM, Entain’s overall NGR was up 17% over the same period last year.
BetMGM doing heavy lifting
Entain is a diversified gambling firm, operating both online and retail establishments. Entain is a global company, but only operates in regulating or regulated markets. Its popular brands include online betting sites Ladbrokes, Coral, Partypoker, and Sportingbet. Entain also has a 50% stake in BetMGM, which is taking advantage of the growth in US sports betting.
Entain closed out 2022 with a strong quarter. There were questions, however, whether the global gambling concern could keep pace, given some of the regulatory headwinds in Germany and the UK. But Entain CEO Jette Nygaard-Andersen announced the first quarter was “a strong start to 2023.” And the numbers clearly backed her up, as both active users and NGR hit record levels.
BetMGM’s first-quarter performance was especially strong. The online sportsbook’s NGR of $470 million was up a whopping 76% over the same period last year. Entain expects BetMGM’s total 2023 revenue to come in somewhere between $1.8-$2.0 billion. The joint venture is still on track to deliver positive EBITDA (earnings before interest, taxes, depreciation, and amortization) in the second half of the year.
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Entain maintains strong acquisition pace
Many of Entain’s most successful brands were savvy acquisitions, including Ladbrokes, Coral, and bwin. So, it’s no surprise that acquisition continues to be key to the firm’s growth strategy.
At the start of the year, Entain obtained BetCity for roughly $485 million. By acquiring BetCity, Entain instantly became the market leader in the Netherlands’ newly regulated online sports betting and gaming market. In March, Entain agreed to pick up Sportsflare. It paid Tiidal Gaming $13.25 million for the esports betting platform.
Later in the first quarter, Entain added the sports media business 365scores, which provides scores and sports content to more than 15 million active users. Entain plans to use its global scale and 365scores’ data-driven content to enhance customer experience and information. Entain acquired 365scores for $150 million and up to $10 million in contingency payments.
In fact, Entain has grown so large through acquisition, it is almost too big to be considered a takeover target. And maybe that’s the point. In the past, Entain has had to fend off takeover offers. MGM Resorts tried to acquire Entain in early 2021 but was rebuffed. Meanwhile, DraftKings made an offer for Entain back in Sept. 2021, but to no avail. There were rumors at the start of 2023 that MGM would make another acquisition attempt. But again, nothing became of it.
Given Entain’s strong back-to-back quarters, and its continued appetite for acquisitions, the global gambling company may not have to worry about unsolicited takeover bids in the foreseeable future.
