Entain leadership figures have stated they are “very confident” about the operator’s ability to generate cash despite navigating a rocky path in several markets.
The business released its Q3 results last Thursday, which showed a 2% rise in net gaming revenue (NGR), driven by online growth in the UK and Ireland.
Chief Financial Officer, Michael Snape, outlined Entain’s priorities, emphasising that leadership has “an absolute laser focus” on optimising shareholder value.
Snape added that the business is not planning on announcing a large-scale project or initiating a share buyback scheme in the immediate future as it attempts to optimise its cost base.
“Managing our costs, optimising the cost base is the way that we’re running the business. It’s not a discrete project, it is something that we think about and do every day,” Snape said.
“You’ve already seen where we’ve made some headcount reductions and other initiatives – we may announce things like that, but we’re not going to announce a big project.
“We are focused on controlling what we can control while strengthening the foundations of the business.
“I want to again emphasise as a final point, behind continued growth and consistent execution, our priorities remain very clear: optimise our cost base, improve cash generation, and strengthen the balance sheet, all with an absolute laser focus on shareholder value.”
Calm before the storm
Realising shareholder value is an obvious focus for any company listed on any stock market around the world, but it is no wonder that Entain leadership is putting such an emphasis on this.
The business has seen itself be relegated from the FTSE 100 to the FTSE 250 in the last few weeks as it continues to attempt to arrest the 42% year-to-date drop in its share price on the London Stock Exchange (LSE).
The group is grappling with headwinds in various markets which have contributed to this slump, and though its UK online operation was a key driver in its NGR growth in Q3, the market has been consistently presenting challenges over the past year.
This was something addressed by Stella David, Entain’s Chief Executive Officer.
“In terms of the changes to the market, the investment by competitors, the impact of the illegal black market – it all happens sequentially, so I don’t think we’ve seen a huge change in the UK right now,” David explained.
“I think there’s some indication that things will be moving. There’s a lot of activity by black market operators increasing their investment behind advertising and trying to secure players, which is as expected, and that’s not going to go away.
“So our strategy has to remain one of being a go-to preferred operator, providing four really great brands here in the UK, and using the benefit of having that visibility both on the high street and online for both Ladbrokes and Coral.”
David also addressed the potential incoming increase in Machine Games Duty (MGD) this month – a hot topic in the UK gambling industry in recent weeks.
A letter from the Betting and Gaming Council (BGC), which was signed by David and several other leaders at tier-1 UK bookmakers, went straight to Government last week, urging Chancellor John Healey to refrain from piling further pressure on the sector.
In the investor call, David said that the potential increase “threatens the viability of many of our shops, with significant consequences to jobs, local communities, the UK high street, as well as the racing industry more widely”, but made clear that “Entain must also remain focused on delivering what is in our control”.
A Brazilian return is on the cards
Brazil was another hot topic, with the abolishment of the Bets Law on 26 September having curtailed Entain’s operations there via its Sportingbet brand.
David expressed confidence that a regulated market will return in some form, adding that Entain will be in a strong position if that is the case, even if there are stipulations like a sports betting-only market or one which poses stringent regulations on advertising.
The ban in Brazil heavily impacted Entain’s results, reducing online NGR growth from what would have been 5% to 3% as its NGR was down 36% due to the business “investing in the right customer and not chasing volume at any cost” in the market.
David explained the company’s plans for what had become one of the world’s largest regulated gambling markets.
She said: “Our intention is to reopen up Brazil, but while seeing what the framework looks like when it eventually happens, and making sure that we’re doing it with the appropriate level of investment to be what I call proportionate and sensible.”
There was plenty to discuss for David and Snape, with Entain being an active operator in so many markets which are surrounded with uncertainty.
Vienna waits for Entain?
One of those markets is Austria, a country which is in the process of overhauling its gambling act to introduce a framework replacing its historic online gambling monopoly with a regulated multi-licensing system.
Entain is active in Austria via its bwin brand, which is one of the biggest players in the country despite only having a sports betting licence.
One of the stipulations touted for the new market is that foreign and grey market operators offering online gambling services to players in Austria must observe a mandatory cooling-off period before they can apply for a legal Austrian license – something which has not gone down well with many gambling operators.
Snape explained the company’s current stance in the market ahead of the planned 2027 launch.
“Currently the cool off period is drafted at nine months, but everybody in the industry is lobbying against that,” he said.
Addressing the firm’s outlook, Snape clarified that while the cooling-off period might slow NGR growth, the EBITDA impact would be “pretty de minimis” given current player claim burdens.
Because the company said it has fully cooperated with government demands on tax and claim compliance, Snape stated that he believes that Entain is “going to be the most competitive person in that market when it regulates properly”, which is expected to be next year.
Potential market-leading hopes in Austria alongside further UK online growth and a clear focus on delivering shareholder value shows that saying there are still signs of life at Entain is somewhat of an understatement.
Market uncertainty is so obvious in 2026, particularly for this business, but there are still clear plans to capitalise on opportunities while optimising its costs as it walks head on into said uncertainty.