Retail return drives Entain revenue up 18% in H1, despite online decline

Entain has reported an 18% year-on-year increase in net gaming revenue for the first half of its 2022 financial year, driven by the reopening of its retail betting shops following the easing of novel coronavirus (Covid-19) restrictions.

In a trading update, Entain said retail revenue was up 243% year-on-year for the six months to 30 June – above expectations – after the removal of many Covid-19 measures meant retail operations were able to return to near normal.

During the first half of last year, Covid-19 rules meant retail shops were closed for part of the period, while they faced operating restrictions in the latter part of the half, limiting the number of customers that could gamble.

However, Entain said “tough” comparators from 2021, when more players gambled online due to the partial closure of retail, meant online revenue was down 7% year-on-year. Online gaming revenue fell 9% while online sports betting revenue also dropped 6%, with wagers down 3% year-on-year.

This, Entain said, was also impacted by a weaker macroeconomic environment, with this reducing customers’ rate of spend. As such, based on the current outlook, Entain said that full-year online revenue is expected to be flat.

In reference to its BetMGM joint venture with MGM Resorts, Entain said that the brand continues to perform “strongly” and in line with expectations and is on track to post more than $1.3bn in revenue for the full year.

Looking at the second quarter, this made for similar reading, with total group revenue rising 8% year-on-year, driven by a 79% increase in retail revenue.

Online revenue in Q2 was 7% lower, with online casino revenue down 7% and online sports betting revenue dropping 6%, though sports wagers were up marginally by 1%.

“I am very pleased to see that more customers are choosing to play with us, reflecting our focus on recreational players and putting the customer at the heart of everything we do,” Entain chief executive Jette Nygaard-Andersen said.

“We continue to expand our growth opportunities through complementary acquisitions with four transactions so far this year. Underpinned by the Entain platform, BetMGM continues to demonstrate its leadership in the US with a 24% market share.

“The macro-economic outlook is uncertain, however the underlying performance of our business remains strong.

“With an increasingly recreational customer base and relatively resilient revenue, we remain confident that our customer focus, diversification and proven ability to grow both organically and through M&A will enable us to deliver further progress against our strategy.”

Meanwhile, Entain said it expects its recently announced acquisition of BetCity to complete in the second half of this year, adding that it will deliver “strategic growth opportunity” in the regulated Dutch market.

Entain agreed a deal to acquire the Dutch online sports betting and gaming operator BetEnt, which trades as BetCity, from Sports Entertainment Media last month.

Author: Raymond Fleming