In June, Entain announced it had agreed to sell a 20% stake in Entain CEE to JV partner EMMA Capital for €425m as part of a phased exit from the region. The sale price gave the business an implied valuation of €2.1bn. Entain CEE was created in 2022, after London-listed Entain and EMMA Capital teamed up to buy Croatian operator SuperSport, before adding Polish market leader STS to the group in 2023 for up to £750m.
Former STS CEO Mateusz Juroszek, whose family holds 10% of Entain CEE shares, speaks to EGR while decked out in a limited-edition pink-and-green Japan football kit from 2022, a couple of months after the deal was announced. Founded by his father, Zbigniew, STS emerged as Poland’s leading bookmaker, with Mateusz taking the reins as CEO in 2012 at just 25 years old. He stepped down from the post in early 2024, while remaining as STS chair and retaining a seat on the Entain CEE board. He also has a hand in the investment side of the industry via his Betplay Capital vehicle.
Juroszek remains bullish on the future of Entain CEE amid a flurry of competition emerging in Poland, including from Betclic and Superbet. He is also confident igaming liberalisation (Poland has an online casino monopoly) is coming down the line, though he doesn’t expect the burdensome 12% turnover tax on sports betting to be swapped for a more sensible rate based on revenue anytime soon. Still yet to hit 40, Juroszek has seen plenty in the industry already. And you get the sense he will be sticking around for a long time to come.
EGR: Mateusz, what have you been up to since stepping down as STS CEO three years ago?
Mateusz Juroszek (MJ): When I was doing the deal with Entain and EMMA Capital back in 2023, one of the ideas was to diversify my portfolio and change my lifestyle a little bit after being a CEO for more than 12 years. I was working long hours and involved in a business that is very up and down; it’s sports betting, you never know what’s going to happen. You cannot control the margin.
I was thinking I’d like to change my life a little bit, maybe do some more investments. I had to still be involved in the business as Entain CEE is a big company. We’ve been trying to manage things, both in Croatia and Poland. I have had some more time to invest in different places, so I try to stay invested and involved in igaming and sports betting all around the world. It gives me a chance to do some other stuff. We have businesses that are global, that are European. We have some investments in US, UK, Scandinavia, Malta, all over the world.
EGR: What are your thoughts on Entain’s involvement with STS since 2023?
MJ: The last few years with Entain and EMMA Capital have been very good. One of the reasons to do a transaction in 2023 was to create something with Entain and EMMA Capital in Central and Eastern Europe (CEE). The plan was to do more deals. I would say this was my only disappointment from that because, if I look at the three years, the cooperation was good, and I wouldn’t say anything bad, but the plan was different. The plan was to consolidate. We wanted to go and buy companies in the region all around CEE.
I think there is still a place for a company that could consolidate CEE. It’s a very specific place because if you look at the ownership, it’s mostly family-owned private businesses, which is very typical for this region. Of course, at the time of the deal, nobody knew how this would evolve. Entain CEE wanted to focus on the synergies between SuperSport and STS, and then there was a plan that, at some point, we would come back to the acquisition strategy. But it didn’t happen. It was interesting to see how it is to work with a big PLC. They had a different view, but at the end of the day, they’re professionals, and we still have a good cooperation.
EGR: Do you think the divestment values Entain CEE at a fair price, around €2.1bn?
MJ: It’s always different when you’re selling and buying, right? So, whenever I was selling any of my companies, I was always valuing them a lot because then you know the potential of the business. If you look at the multiples in the industry for last two years, they’re completely destroyed. If you look at STS and SuperSport, you cannot do an evaluation of these businesses based only on EBITDA because they produce so much cash.
These companies have zero debt and they produce cash. I think the cash conversion is one of the best in the industry. They are in two very good markets, plus Poland is in with a chance for igaming licensing in the visible future. I understand why Entain wants to focus on some other parts of the world and why they want to deleverage. It’s their decision. But from our side and from EMMA Capital’s side, I think it was a pretty okay deal, and they see huge potential in these two markets.
EGR: Looking at STS, where do you place that business in Poland? Is it still the market leader?
MJ: Of course they’e the market leader. They will always be market leaders […] but the market has been changing. When I was running STS, there was a moment in time when STS was like 50% of the market. In Poland, because of the [12%] turnover tax, we used to measure the market share based on the turnover, which is not usually done in other markets. But this was the only official data that was available.
Then we were trying to measure it based on GGR or NGR, like in other markets, but we never had this data officially. Or you can measure the market by the profit, which you can find in the Polish National Court Register (KRS). If you take a look at the profits, STS is like 60% of the market.
Based on the turnover, it’s natural what’s happening in the market because there are more and more companies doing promotions. Betclic had this huge promotion when they were paying the 12% turnover tax for their customers in Poland.
It depends on the way you want to calculate it. What’s going to happen is there’s going to be STS with, let’s say, 30% of the market based on GGR. Then you have two or three others with 10% or 8% or 5%, and then the rest is going to be the long tail.
What I’m proud of is we managed to build a business that is highly profitable. I can see some other companies, like the smaller ones in Poland, are trying to be smart and building their database of clients, doing some interesting stuff with the product and becoming more profitable. But we’re talking about €2m to €3m EBITDA, so you cannot compare it to STS.
EGR: On the turnover duty, Poland’s tax regime is one of the most burdensome in Europe. Is there any chance of reform on this front?
MJ: No, I don’t think there will be any reforms because look at how much money the government gets from bookmakers. I’ve been involved in these discussions for last 15 years. There was never any discussion or any chance to change that because they would have to be crazy to even touch it.
It’s guaranteed. It’s not based on GGR. They don’t have to care about the margin bookmakers make. They don’t care. They get 12% on every stake, and it’s growing every year. Why would you change it? I think it would be very difficult to convince the Ministry of Finance or politicians to change the taxation.
On the other side, I think they should start working on pushing the de-monopolisation of igaming because we have one of the last state monopolies in Europe, which is nonsense. You can see that even Finland is regulating. I think Austria will regulate. You have places like New Zealand and others that are also regulating. I think Poland will follow at some point.
I think they will keep the same taxation as they have for the state monopoly, which is 50% of GGR. Again, too high, not good enough. But as you know, as an add-on to sports betting, it will be good for bookmakers to be able to offer online casino in Poland, and it will be good for everybody because we will have more control on play.
We’ll have a control where the money flows. There will be Polish companies making money, not the Russian companies that are running illegal online casinos in Poland. I think this is a no-brainer. You would have to be crazy to leave it like this. I think our politicians have a problem because whenever they hear about gambling, they get scared.
But I think they will change soon. I don’t see any issues why they wouldn’t change it as this would help Polish businesses to be more profitable, to hire more people in Poland, to pay more taxes, eliminate the black market and provide a wider player protection. The elections are next year, so I think it’s a three-year horizon where we can think about changes to this market.
EGR: Let’s look at your Betplay Capital investment vehicle. Are you happy with the portfolio and are there any companies within it you are excited about?
MJ: It’s unbelievable what has happened in last three years. You had companies like Flutter, Evolution, Entain and DraftKings, with crazy good valuations, and suddenly nobody loves them anymore. It will change because it always changes. It’s up and down.
Where we are more active right now is the DigiPlus investment in Philippines. This is a fantastic company. We’ve been investing there for a couple of years, and it actually reminds me of STS back in the day. We’ve been pushing the board and the owners of the business to do the [share] buyback because when you have a company valued at two times EBITDA and you have tons of cash, you should not be allowed to do any acquisitions.
You should buy your shares. They have an amazing business in Philippines. They’re market leaders, and they should utilise that. They should focus on this market, grow the business, give money back to the shareholders through either buybacks or bigger dividends. If there is anything they want to invest in Philippines, maybe they should do it.
We love Super Group. We think they’re doing amazing work in Africa. They were very smart to leave the US. Africa is flying, and I think it’s very interesting because I was looking at Africa 15 years ago, but at that time it was very difficult to move money there. Africa is something that excites me a lot.
The affiliate space is completely smashed. A couple of years ago, investors used to love it because it was great cash flow, and now it’s still great cash flow, but they hate it. We’re looking right now at a different scenario at Gentoo Media, where we are the biggest shareholder. I think the company is extremely cheap. It delivers so much cash.
We’re not selling this business, so we don’t look very carefully at the valuation. We focus on excellence; improving every part of the business to make sure we can be proud of it, and the good businesses will always get the good valuation at some point.
EGR: How about the US and the growth of prediction markets?
MJ: I’m not very excited about the US. I think it’s a difficult play right now. It’s difficult to invest in the US if you don’t know what’s going to happen. The prediction markets are crazy. You don’t know how long this administration will stay [in power]. In Poland, prediction markets are already banned. Their domains are banned. You cannot do it in Poland – it’s sports betting.
In Poland, we don’t care if Trump’s son is the adviser. It’s unfair. If I invest my money and buy Flutter or DraftKings because there is a plan to go to different states, get a licence, pay taxes, spend money on the product and deliver the best solutions for the US customers, and then suddenly there is Kalshi or Polymarket that get billions and billions of dollars from investors to spend them everywhere they want.
I was in New York for the World Cup final. When I was walking around Manhattan I could see Kalshi basically advertising bets on the World Cup. I thought, ‘do they have a licence in New York?’ because I don’t remember that.
There’s too much emotion right now [in investing]. I think investors should look at the cash flow and the company that delivers a lot of cash. Look at Evolution. Investors get very emotional. One day they love Evolution, the next day they hate it. I think Evolution at this price is an amazing business and a good buy.
I think that on the private market you can still have good valuations, even though people always compare to the public markets. I always look for a company that’s a market leader, 70% or 80% of EBITDA converts to cash flow and has no debt. You don’t have these kinds of companies on the public market. We’re confident about our business.
The post Mateusz Juroszek on Entain’s CEE exit and why STS will “always be market leaders” in Poland first appeared on EGR Intel.
Former CEO of the Polish bookmaking giant talks to EGR following Entain’s decision to divest a 20% stake in the JV with EMMA Capital, lifts the lid on his investment thesis and explains why he is “not very excited” about the US
The post Mateusz Juroszek on Entain’s CEE exit and why STS will “always be market leaders” in Poland first appeared on EGR Intel.