This comes off the back of an eventful morning for Entain. As well as publishing its results for the year to 30 June – in which it recorded £2.40bn in revenue for H1 – Entain announced that it would take on a £585m (€677m/$745m) provision in relation to negotiations with the Crown Prosecution Service (CPS).
Looking ahead, CEO Andersen discussed the opportunity for the business in LatAm, in the wake of regulatory progress in the contintent’s largest market.
Entain expecting regulated Brazil launch in 2024
With Nygaard-Andersen paying particular close focus to LatAm, it was clear that Brazil was going to crop up.
Brazil’s president Luiz Inácio Lula da Silva signed Provisional Measure No 1,182 into law last month.
Entain operates the Sportingbet and Betboo brands in LatAm, though Brazil proved tricky in H1. Net gaming revenue missed expectations by 14% on a constant currency basis. Sportingbet aims to compete using the quality of its product, and online actives did grow during the six-month period.
“We are pleased to see that regulations have been passed in Brazil, which should allow licensed operators to commence early next year, subject to a pathway proposed by the regulators,” she said.
Entain is “ready for the market going live”, “hopefully at the beginning of next year”.
Further improvements in the region are coming, she continued. The $150.0m acquisition of local sports media leader 365scores aided a strong start to the second half of 2023.
“So we are well placed to drive further growth in newly regulated markets,” Nygaard-Andersen added.
Entain around the world
Entain’s global expansion strategy is powered by ‘local hero’ acquisitions, snapping up regional market-leaders to expand its footprint. These deals typically bake in earn-out agreements to incentivise the existing management to continue pushing the operations forward.
This approach accelerated its Netherlands’ igaming entry through BetCity, which performed in line with expectations in H1, Entain said. It was down by a single digit percentage, after pre-regulation market leader Kindred returned to the market in July 2022.
Performance at the Entain CEE business, a joint venture with private equity firm Emma Capital, was stronger. Online NGR for Croatia’s SuperSport was up 31% in constant currency, on a proforma basis.
Entain CEE’s presence will grow further thanks to the £750m acquisition of Polish market leader STS. “This positions us well to further leverage the opportunity that the $8.6bn CEE market offers,” the operator noted.
Lack of enforcement weighs on German performance
While Germany finally gave federal regulator Glücksspielbehörde full control of the market in January this year, Entain suggested it is yet to ramp up enforcement against illegal activity.
“Therefore, the challenges of an uneven operating landscape continue to overshadow those operators adhering to licensing obligations, particularly following the implementation of new deposit limits for sports customers from July 2022,” it explained.
Online NGR was down year-on-year as a result, while higher-spending customers shifted to non-compliant operators.
“However, we remain positive on the long-term prospects for the German market as regulatory oversight is enforced,” Entain explained. “Bwin is a leading brand across Germany and globally, underpinned by the quality of our products and offer as well as great partnerships with UEFA Europa League offering exclusive fan experiences for bwin customers.”
Georgia and Baltics reports strong growth
Entain’s Georgian market leader Cystalbet, meanwhile withstood the country’s tighter regulatory and tax regime introduced early in 2022. NGR rose 7% year-on-year for the country.
Revenue in the Baltics, via Enlabs, also grew 7%. “Enlabs’ growth is coupled with improved contribution, and our offering continues to attract a broader audience, benefiting from Entain’s sports and gaming products, with actives up [more than] 22% year on year.”
Entain Down Under
During the first half, Entain entered into a long-term strategic partnership with Tab NZ, New Zealand’s sole betting licence holder. Nygaard-Andersen said that Entain’s presence in New Zealand “adds an exciting new market to the Australian business”.
“We look forward to growing in the region in the years ahead.”
Original article: https://igamingbusiness.com/finance/entain-latam-q2-h1/
