Entain clocks $6.15 billion NGR amid regulatory challenges, records FY23 loss of $1.2 billion

Multinational sports betting and gaming company Entain has registered Net Gaming Revenue (NGR) of £4.83 billion ($6.15 billion) for full financial year of 2023, reflecting an 11% increase from the previous fiscal year.

Group EBITDA saw a modest 1% rise, reaching £1.01 billion ($1.3 billion) compared to last year's figure of £993.2 million ($1.27 billion). Gross profit also demonstrated a year-on-year increase, climbing by 7% to £2.91 billion ($3.72 billion).

Despite these positive financial indicators, Entain reported a loss in FY23, in contrast to the profit after tax recorded in the preceding year. The Loss after tax from continuing activities amounted to £878.7 million ($1.12 billion), a stark contrast to the profit of £32.9 million ($42 million) in FY22. The total loss, encompassing discontinuing operations, was £936.5 million ($1.2 billion).

“2023 was a period of necessary, but ultimately positive, transition for Entain. We have significantly strengthened the quality of our revenue base, enhanced our Board, and delivered a resolution to a critical, historic, regulatory issue,” Barry Gibson, Chairman of Entain, said.

“We are making positive progress in our search for a new permanent CEO, and in the meantime, Stella is driving the business as it continues to take appropriate actions to deliver changes to drive a better long-term performance. We are also making good progress in adding to our Board strength - Ricky Sandler and Amanda Brown joined the Board in recent months and we expect to announce a further appointment shortly,” he added.

This financial setback is attributed in part to fines incurred by the company during 2023, notably a £585 million (748 million) settlement with the UK Crown Prosecution Service (CPS) for Bribery Act breaches stemming from legacy Turkish operations.

In assessing revenue pro forma, accounting for all acquisitions as if part of the company from January 1, 2022, the total group NGR, inclusive of a 50% share in BetMGM, experienced a 14% increase, albeit a 2% rise on a pro forma basis. Group NGR, excluding US operations, displayed an 11% uptick but recorded a 2% decline on a pro forma basis.

Online NGR showed a 12% increase but saw a 3% decrease on a pro forma basis. Pro forma retail and online gaming both grew by 2%, while online sports gaming witnessed a 9% decline.

BetMGM, a collaborative venture between Entain and MGM, generated $1.96 billion ($2.5 billion) in 2023, marking a 36% year-on-year increase and claiming a 14% market share in sports betting and iGaming in its operating regions.

For Q4, reported total online operations grew by 12%, with online sports and online gaming up 12% and 9%, respectively. Retail reported a 7% growth, while BetMGM experienced a notable 21% increase.

On a pro forma basis, total online operations fell by 6%, with online gaming down 1% and online sports down 12%. Retail also declined by 2%. The total group trading performance, including the 50% share in BetMGM, increased by 12%, but on a pro forma basis, it was down by 1%.

The past year was marked by turbulence for Entain, including the departure of CEO Jette Nygaard-Andersen in December amid investor pressure and substantial penalties.

In its financial update, Entain also cautioned that regulatory adjustments in the UK and internationally will impact earnings throughout 2024 by around £40 million ($51.5 million). Affordability checks introduced in advance of the UK government's gambling white paper had made things "overly complex" for customers, the parent company of Ladbrokes and Coral said.