Posted on: July 7, 2022, 10:41h.
Last updated on: July 7, 2022, 10:41h.
The first quarter of 2022 brought good results for gaming operator Entain, building on the success it saw last year. The company’s performance continues to increase, despite taking a hit in its online operations.
In a new financial health update, Entain reported that its retail revenue increased 243% year-over-year in the six months to June. This was higher than expected, as the removal of many COVID-19 restrictions meant that retail operations could return to normal.
However, the company added that it saw “tough” comparisons to 2021 when more players gambled online. As a result, partial closures of retail meant online revenue fell 7% year-on-year. Online gaming revenue lost 9%, while online sports betting revenue declined by 6%.
Retail Return Boosts Revenue
Overall, Entain saw a year-on-year increase of 18% in its net gaming revenue, even though it is dealing with a “weaker macroeconomic climate.” This reduced customers’ spending, and Entain expects that online revenue for the full year will remain flat based on its current forecast.
The second quarter produced similar results to the first. Total group revenue rose 8% year on year, catapulted by a 79% rise in retail revenue. However, second-quarter online revenue was 7% lower than in the previous quarter.
Online casino revenue dropped 7% and online sports betting revenue slipped by 6% in the quarter. However, sports wagers increased slightly, adding 1%.
Entain also highlighted the performance of BetMGM, its sports betting joint venture with MGM Resorts. It stated that the brand is performing according to expectations, adding that it will report revenue of over $1.3 billion for the year.
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,” said Entain CEO Jette Nygaard-Andersen.
Entain stated that it hopes to wrap up its BetCity acquisition sometime in the second half of the year. The addition of the Dutch online sports betting and gaming operator will provide “strategic growth opportunities” in that market. Entain announced the €557.1-million (US$566.34 million) purchase last month.
Entain Stock Takes a Hit
The news didn’t please Entain stockholders. After the publication of the results, shares fell by 9.8% to £10.29 (US$12.35) in morning trading. This means their value has fallen by approximately 39% in the past year, making them the largest decrease in the FTSE 100 Index.
The price dipped even more from there. By 12 PM London time, it had dropped to £10 (US$12.35). However, by the end of the day, it was back on solid ground and reached £10.98 (US$13.18).
Going forward, mergers and acquisitions, as well as new partnerships, will help fuel Entain’s growth. As a result, it is constantly seeking out new deals, such as its arrangement with Light & Wonder.
In addition, BetMGM is launching gaming on Carnival Cruises cruise ships and has another agreement in the works with Sony Pictures Television. The latter, which includes gaming equipment producer IGT, will lead to the launch of a new Wheel of Fortune-based digital casino offering.