The owner of Australian bookmakers Ladbrokes and Neds, Entain, reported that its online betting revenue dropped for the first time in six years. However, the online wagering company said that betting activity in its retail shops improved significantly after countries lifted COVID restrictions.
In the announcement Entain released on Thursday, the company also revised its outlook for the yearly core earnings. The company narrowed its prediction for the full-year earnings from the A$1.60m – A$1.69m range, to a more exact estimation of annual earnings that’s in the A$1.64m – A$1.66m range. These are earnings the company expects to make before tax, interest, amortization, and depreciation.
A 9% Drop in Online Betting Revenue
Despite the drop in online betting revenue, Entain had a strong year in most of its markets. One of the rare exceptions was Germany. German laws are pretty strict and limit players’ deposits and bet stakes. Authorities in Germany also impose steep tax rates on online betting providers operating in the country.
The company said that its overall online betting revenue dropped 9 percent in the last quarter of 2021 compared to the same period in 2020. That was the first drop in revenue the company reported recently, as Entain had double-digit growth for 23 consecutive quarters.
A 60% Increase in Retail Betting Revenue
Even though Entain’s online betting revenue dropped, the company said that its retail betting business was booming once again. Retail betting revenue dropped significantly when Entain’s betting shops around the world closed because of the COVID-19 pandemic. However, as soon as these restrictions were lifted, Entain’s 4,000 retail betting shops started raking in the profits once again.
The total retail betting revenue for the last quarter of 2021 increased by 60 percent compared to the same period in 2020. Interestingly, that surge in profits means that Entain is now within 10 percent of its pre-pandemic retail revenue figures.
Two Unsuccessful Takeover Bids
2021 was pretty eventful for Entain. The company received two takeover bids which turned out to be unsuccessful in the end. The US betting giant MGM bid A$15bn for Entain at the beginning of 2021, but the Entain board said the offer “undervalued” the company.
The second bid came from another US company, DraftKings. However, the sports betting operator decided not to pursue its A$30bn bid for the Neds and Ladbrokes owner too.
A Profitable Joint Venture
Despite the failed takeover bid, Entain’s existing partnership with MGM blossomed, and the two companies increased their market share in 2021. As a result, BetMGM revised its forecast for 2022 on Wednesday to say that it expects to report a core profit come 2023.
According to Entain’s chief executive Jette Nygaard-Andersen, BetMGM was “a particular highlight.” She added that the company continued to see growth opportunities and they were now working in a market that was around A$220bn.
MGM’s chief executive, Bill Hornbuckle, said he was “beyond excited,” especially when it came to integrating BetMGM into MGM’s loyalty program and brick-and-mortar casinos.
According to some analysts, this indicates that MGM might be considering a second Entain bid or thinking about buying out the London-listed company’s half of the joint venture.
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