In a trading update published on Wednesday morning, Entain reported its Q3 total group NGR had increased 6% year-on-year or 7% on a constant currency (cc) basis.
This figure includes its 50% share in the US-facing BetMGM business, although the operator did, for the second time, break its earnings down to also exclude its US figures.
Ex-US NGR was up 4% or 5% cc, assisted by a 10% NGR uptick in the CEE region.
UK NGR was up 8%, in line with expectations the operator said, with online (up 15%) largely driving the uptick. This was down to “growth in players’ values driving strong volumes and further market share gains”, Entain said.
Notably NGR in Brazil was down 10% year-on-year during the period due to unfavourable sporting results which offset 14% volume growth.
During the earnings call on Wednesday, Group CFO Rob Wood said that, despite this drop in revenue, the company is “excited” by Brazil’s potential.
Wood dubbed the Brazil results as “genuine bad luck from sports results” as the market has a high football mix and was impacted by both Champions League and local league results.
Wood insisted that, despite the dip, the market was “trading on the right side of expectations on a volume basis”.
Impact of tax hike in UK
When asked on the earnings call about mitigating the impact a possible remote gambling tax increase could have in the UK, Entain CEO Stella David warned a number of business areas would take a hit.
“There are a number of levers we could pull which include being less generous on bonusing, odds [could] be not quite as good, a reduction in marketing. These are all things that one does to mitigate against unwelcome tax increases,” David told analysts.
Adding to David’s point, Wood said the sports sector would take a hit as operators (including Entain) would likely pull back on sponsorship deals and the advertising around them.
“It doesn’t matter which [market’s] tax [rate] moves, sponsorships, because there is a long pay back and they are about brand awareness, are an obvious place operators will go,” Wood added.
“The only winner in that situation is the black market because they have less competitive disadvantage. The loser of course is [the] sports [sector].”
“Obviously we don’t sit on our hands and not plan for those eventualities,” David added.
The possible increase in remote gambling tax is a hot topic among the sector today and was also addressed in Rank’s Q1 2025 earnings update on Wednesday.
In April the UK government said it was considering a new tax framework for remote gambling. It opened a consultation and is expected to provide an update on its plans in the 26 November autumn budget.
Analysts asked Entain execs whether a hike could benefit the operator by speeding up industry consolidation and weeding out smaller competitors.
Wood said it was certain that smaller operators would be squeezed, and up to 25% of the UK’s iGaming market was made up of tier 3 or smaller operators.
Entain AUSTRAC proceedings update
On the operator’s ongoing legal proceedings with Australia’s AUSTRAC, David said she was pleased with the operator’s current compliance framework in the market.
“I think we’re probably market leading [with the system we have in place now],” David said. She noted there was no clear timeline for the proceedings and the legal process could end up being worked out in court.
It is currently working through a mediation process with the regulator, which “will take as long as it takes”, she said. Mediation started in the summer.
The operator appointed a new permanent CEO for its Australia business in August. Andrew Vouris acted as interim CEO for two months before being made permanent.
Entain reported group NGR had increased 6% in Q3. It reiterated its FY 2025 online NGR growth forecast of approximately 7%, with an online EBITDA margin of 25%-26%.