Entain considers Crystalbet sale following strategic review

Entain said on Tuesday that it is considering the sale of its Georgia-facing brand Crystalbet after a strategic review determined the operation is "non-core" to the group. Several parties have already expressed interest.

The review, initiated in January by Entain's Capital Allocation Committee, aimed to maximize shareholder value by assessing the company's portfolio. In March, the Financial Times reported that Entain hired Moelis & Co to advise on asset sales, just a week after posting a £936.5 million ($1.19 billion) net loss for 2023.

"The committee concluded that the brand is non-core to the group," Entain said, adding that strategic alternatives for this business will be considered, including interest already received from potential acquirers.

The review affirmed Entain's diversified portfolio and geographic footprint, positioning it for long-term growth. The company plans to focus on organic revenue growth, margin expansion, and strengthening its US market presence.

Entain's financial position has been bolstered by extending its revolving credit facility and adjusting its term loan, ensuring a robust balance sheet.

Key market findings included strong double-digit revenue growth in Brazil for Q2, driven by improved customer strategies. In the UK, new gambling checks and a £2 online slot limit effective September are expected to support growth.

In the US, BetMGM's product development is advancing well, and Entain recently received full operational approval from the Nevada Gaming Commission. Entain CEE (Central and Eastern Europe) continues to perform strongly, with a promising outlook for online casino liberalization in Poland. Project Romer is on track to achieve significant cost savings by 2025.

Chairman Barry Gibson expressed satisfaction with 2024 progress but acknowledged more work is needed to improve operational performance. "The group has the core strengths, brands and products to be competitive across markets. We continue to be a global leader in betting and gaming. The board looks forward to updating the market further on progress at the interim results in August."

Entain's strategic review includes ongoing oversight of significant capital commitments to maximize shareholder value. The company's financial pressures from recent acquisitions and settlements have prompted the exploration of asset sales, including Crystalbet, to recoup expenses and focus on core markets.