Entain reports strong third quarter after UK tax raid fears

Posted on: October 18, 2024, 7:23 am.

Last updated on: October 18, 2024, 7:23 am.

Online gambling giant Entain [LON: ENT] has raised its profit forecast after a better-than-expected third quarter. It’s a bright spot in a week in which the company’s shares suffered a major blow when it was revealed the British government was planning a “tax raid” on the industry.

Ladbrokes parent company, which jointly owns BetMGM in the US with MGM Resorts, said in a conference call on Thursday that group EBITDA (earnings before interest, taxes, depreciation and amortization) for the year is now expected to be in the upper range between 1.04 and 1.09 billion pounds.

BetMGM’s net gaming revenue rose 18%, with “good double-digit” growth in both online gaming and sports betting, with the latter industry growing faster.

In the UK, Entain reported 6% growth in online business, driven by casino gaming. Sports betting was stagnant, the company said.

Other highlights included strong growth in international markets, including Brazil. Total group net gaming revenue increased by 8%.

Turbulent times

“My first few weeks as CEO of Entain have confirmed my view that this is a very good company operating in a very attractive global industry,” said Gavin Isaacs, new CEO of Entain.

“Entain has great brands, an enviably diverse global portfolio and is brimming with talent, ambition and opportunity,” he added. “Entain is already on a path of strategic and operational improvement, with strong performance in the third quarter demonstrating the progress made to date.”

Anderson’s tenure was marked by internal unrest towards the end, as activist investors increasingly took positions in the company and criticized its strategic direction.

Investors are waiting for clarity

But while analysts at Davy called the latest update “positive” and shares rose almost 5% on Thursday, they stressed that investors would probably prefer to wait for some “clarity” from the UK budget due on October 30 is due.

Shares in Entain fell as much as 14% on Monday after news that Britain’s new Labor government is considering raising taxes on the industry to plug a £22 billion hole in the country’s finances (April 28). .7 billion US dollars).

“Penalty tax increases would have a significant negative impact on the economic contribution of the entire industry and put thousands of jobs at risk [and] “It funds sports and racing and benefits the black market,” Isaacs said.