Entain, a U.K.-based gambling and sports betting company, is spending more time on BetMGM — its joint project with MGM — than was anticipated. The company’s interim CEO Stella David conceded this point during last week’s earnings call, SBC News reported.
This negative impact on the other parts of the business, plus the lingering effects of a bribery scandal that required the company to pay a huge fine last year, contributed to the fact that while the company took in $6.15 billion in net gaming revenue, an 11 percent increase, it recorded a FY 2023 loss after taxes of $1.2 billion, compared to a profit of $42 million the previous year.
Online NGR increased 12 percent. Retail and online gaming grew 2 percent, while online sports betting declined 9 percent.
David said “Being fully transparent, it took us … some time to realize just how quickly we needed to feed BetMGM with better product, better customer experiences, and better, more focused, U.S.-tailored products.
“Delivering product and tech solutions for BetMGM at the pace that we have had to do it has meant there has been some considerable cost to other markets.”
Despite these challenges, BetMGM itself performed strongly, producing almost $2 billion in net gaming revenue for 2023, 36 percent more than the year before. This was nearly at the top of the most optimistic projections for the joint project. The venture had 14 percent market share in the markets it is competing in.
David added “With both parents of BetMGM committed to investing into the growth, we are positioned very well for 2024 and look forward to a positive market-share progression.”
Entain’s EBITDA rose 1 percent to £1.01 billion ($1.3 billion) compared to £993.2 million ($1.27 billion) the previous year. Gross profits rose 7 percent to £2.91 billion ($3.72 billion).
Other challenges for the company are the changing regulatory landscape in the Dutch market and the U.K. itself. The impact of adjusting to these changes is expected to be about £40 million ($51.5 million) this year. The introduction of affordability checks called for by the U.K’s gambling white paper created made things “overly complex” for operators, said David.
Last year Entain CEO Jette Nygaard-Andersen resigned in the wake of a record £585 million ($748 million) fine it agreed to pay the U.K. Crown Prosecution Service (CPS) in a bribery scandal involving a Turkish subsidiary that it had sold.
Also commenting about the company’s performance last year was Chairman Barry Gibson, who noted that the company had “strengthened the quality of our revenue base,” added board members, and resolved the scandal, which he called a “regulatory issue.”
Gibson said the company continues to look for a permanent CEO, but credited David with “driving the business as it continues to take appropriate actions to deliver changes to drive a better long-term performance.”
Ricky Sandler and Amanda Brown have been added to the board, and there is a pending appointment that Gibson did not name.
