“Among our iconic brands, we have some sleeping giants that we’re just starting to reawaken,” said Entain CEO Stella David on the operator’s Q2 earnings call yesterday, 12 August. While she was referring specifically to bwin in Spain, the message applies elsewhere, too. Entain has been making gains in other parts of the business, particularly in the UK and Ireland (UKI) where market share gains and NGR are on the up.
The operator’s 50% share in North America-facing joint venture BetMGM continues to bear fruit and is on track to reach its $500m EBITDA target. Brazil NGR rose 21% on a constant currency basis, as the firm’s Sportingbet brand adapted to the transition to a regulated market in January. Elsewhere, gains in Spain, Georgia and Central and Eastern Europe were also reported.
Speaking to EGR following the earnings call, Entain CFO and deputy CEO Rob Wood said that alongside bwin in Spain, there would be a push in Germany. And interestingly, in the UK, Ladbrokes was also earmarked for growth. The brand has just deployed its new ‘Ladisfaction’ brand campaign and has received product and UX upgrades over the last 12 months. It’s partly why the UK and Ireland was heralded for its “outperformance” by bosses in the earnings report, with net gaming revenue (NGR) hitting £1.1bn, a 9% increase in constant currency.
EGR: What are your thoughts on the H1 2025 performance and what were your key highlights?
Rob Wood (RW): I’m sure you gathered we’re pleased with how the first half has gone for us. And it’s not just about the first half, it’s the last four quarters, really. So, 12 months of much stronger performance, both top and bottom line. I’m delighted to see that group revenue is up 10% for the half and EBITDA up 32% – it’s a great place to be.
If you look across where all that growth is coming from, it’s almost across the board, which obviously is really pleasing for us and just illustrates the strength of our global diversification. But if you have to call out any markets, it is those ‘must-win’ markets, as we’ve described them for some time now. The UK up 21%, Brazil up 21%, US up 35% are killer numbers for us, so we’re really happy with that, and as a consequence, able to upgrade both revenue guidance and EBITDA margin, which is the perfect combination.
Up until the last few days, our share price has been good this year. It’s nice to see all the work that we’re doing to execute against a strategy that produces these good results is tracking through into more positivity in the share price as well. So, all in all, it’s been a good half for us.
EGR: What has been the impact of Stella David taking on the CEO role on a permanent basis? Were there any surprises or has it been what you would have expected?
RW: We set a modified strategy back in Q1 2024 and we’ve been executing against it ever since. So exactly, as you said, having Stella come back in was a vote for continuity, a vote for stability. And that’s exactly how it’s proved to be. So, everyone knows what they’re doing. We’re working hard, we’re delivering against the plan, and these results are really just the output of all of the hard work that goes into it.
EGR: Looking at UK & Ireland market share, Flutter Entertainment reported Q2 NGR declines on a constant currency basis. Is it a case of making gains against large rivals or taking share from smaller players?
RW: I think it’s recovering share from what we lost previously, in particular relating to the affordability measures that were put in around 2022 and 2023. We see it as recovering share that we had, irrespective of which operator that comes from, if that makes sense.
We are delighted that the recovery has been as rapid as it has. We were always confident with such strong brands – as we have with Ladbrokes, Coral, Gala and Foxy – and we always felt that we would recover share. But the pace of it has surprised us.
Now the question is not if we can recover share, it’s how do we perform once we’ve fully recovered? Do we just sit back and grow in line with the market, or can we carry on growing market share, recognising that we’ve got a massive advantage with Ladbrokes and Coral [in] that the retail estate is a massive asset to outgrow online. Then, in the case of Gala and Foxy, we have great products, like the newly launched [tokens] Foxy Dollars and Gala Coins gaining traction as well. We have the potential to continue outgrowing the market, above and beyond just recovering share that we previously lost.
EGR: Does the uncertainty in Brazil since regulation make it harder to model? You and the team spoke about being agile there on the earnings call, but given it is a must-win market is it frustrating?
RW: I think Brazil is a special case, because it’s a brand-new regulation. We’ve seen it in the Netherlands, we’ve seen it in Germany. When a market introduces a new regime, it’s almost inevitable that there’ll be some tinkering and learning as you go. We don’t see that as a surprise; we’ve been agile for many months in Brazil and continue to be.
It does cause consequences, obviously, to profitability, to how much you’re willing to invest in marketing, to how much you’re willing to invest in generosity. It impacts your CPAs. It impacts your payback periods. You have to retrain models because player values are now impacted, because your cost of sales have gone up. All of these things have to be considered and adapted to. But I would say it’s part and parcel of a new market regulating, and that’s to be expected.
EGR: On BetMGM, the hope is more igaming states eventually come live. But that is probably unlikely in 2026 and 2027. Are you confident the overall online casino market share pie can grow?
RW: I think the first thing to say is ‘grow the pie’, even on a same-state basis. We’re a few years in with some of these markets, particularly New Jersey, but even Michigan and Pennsylvania, they’re a few years in now. And then you look at the UK, which has been growing its gaming market online for 20 years, because of the quality of the product, the engagement, the reach. There’s lots of different drivers for continued growth within the same state.
Irrespective of new states coming online, we think we’ll get to $500m of EBITDA in the coming years and continue to grow thereafter. So even on a same-state basis, there’s a long runway for growth. We also do have Alberta [in Canada] coming in early 2025. It’s not a US state, but that is going to be both online sports betting and igaming, so that’s a catalyst for more growth next year as well.
EGR: In Italy, what is the plan for the new licensing regime and is the hope that smaller brands exiting the market leads to share gains?
RW: We’ll be applying for all three of our brands [bwin, Eurobet and Gioco Digitale]. That will help market share [as other brands exit]. It’ll be a large volume of operators, but a relatively short, small share of the overall pie. So, it’ll be a little lift for us. Italy is a fabulous market, growing every year, top- and bottom-line growth, and it’s a market that we want to hold serve in.
We’re the number three. We’ve got a very good retail estate and a good lead brand in Eurobet. So, holding serve in in Europe’s largest market with a long runway of growth ahead is a good place to be
EGR: Could you touch more on these “sleeping giants”, which Stella mentioned in the earnings call? Which brands might find themselves in that category alongside bwin?
RW: It’s a good quote; we’ll have to talk about it more internally. In my eyes, and I think what Stella was referring to in particular, was bwin in Spain. A lot of people remember Cristiano Ronaldo in the Real Madrid shirts with bwin. There’s an awful lot of brand awareness, but not a lot of brand consideration, because it had not been a priority. That’s a real opportunity for us, and that’s playing out.
Bwin is also, you’d argue, something of a sleeping giant in places like Germany. Germany has been so difficult with the new regime that it just hasn’t been a focus for us. But once the regulatory environment settles, and hopefully channelisation starts to improve because the regulator’s starting to allow us to be more competitive versus the black market, that’s an opportunity.
Another one I’d point to is Ladbrokes in the UK. If you ask sports bettors ‘have you heard of Ladbrokes?’, I think you’d struggle to find one who hasn’t. Ladbrokes’ market share of UK online is mid-to-high single digits, so in terms of its relative brand awareness, I think there is a sleeping giant in Ladbrokes as well. But that’s got to be backed up with a quality sports betting product. And that’s what’s really accelerated over the last 12 months, with much faster app speeds and a better bet builder. Ladbrokes has gone up the rankings in the App Store now, which is really good to see. That needs to come in parallel with revitalising the brand and so on.
The post Entain deputy CEO: Ladbrokes is a “sleeping giant” in the UK market first appeared on EGR Intel.
Rob Wood speaks to EGR about the challenging environment in Brazil, growing the US online casino market and devoting resources to the revitalisation of some of the firm’s heritage brands
The post Entain deputy CEO: Ladbrokes is a “sleeping giant” in the UK market first appeared on EGR Intel.