Tue. May 24th, 2022

Enbro, owner of Ladbrokes and Bwin, has raised the bottom line of its earnings guidance, even as the betting company faces tighter regulation and struggles to maintain growth, driven by a surge in online gaming during 2020 closures.

The company on Thursday reduced its lead for full annual earnings before interest, tax, depreciation and amortization from between £ 850 million to £ 900 million to a range of £ 875 million to £ 885 million.

During 2021, the betting group benefited from “strong growth” in all its online markets, except Germany where new gambling laws require players to comply with restrictions on how much they deposit and deposit in online slots.

Entain’s latest forecast comes a day after announcing a sharp improvement in prospects for BetMGM, its US joint venture with casino group MGM, which he says will become profitable in 2023 despite hefty marketing costs incurred by US operators as they battle for customers in new regulated states.

BetMGM was “a special highlight”, said CEO Jette Nygaard-Andersen.

The company continued to “see significant growth opportunities” with a total addressable market of approximately $ 160 billion across our new and existing markets, as well as in emerging areas of interactive entertainment, she added.

Bill Hornbuckle, MGM’s CEO, said on Wednesday he was “very excited” to further integrate BetMGM into MGM’s loyalty program and land-based casinos. Analysts have suggested that this may indicate MGM’s intention to buy out Entain’s half of the joint venture or try to make a second acquisition of Entain.

MGM offered £ 8 billion for Entain in January last year, but was rejected by the Entain board, which said it undervalued the company.

Betting companies have increasingly turned their attention to the fast-growing U.S. market where a federal ban on sports betting and online games was overturned in 2018. There are now about 30 states that offer sports betting and 18 that allow betting online.

In contrast, more mature European markets, including Germany, the Netherlands and the UK, have begun tightening regulations in an effort to combat gambling addiction.

Entain see contestants Flutter said in November that unfavorable sports results and stricter gambling laws meant that his full annual earnings would be at the bottom of his expectations.

Focused on diversifying its business model, Entain said it plans to invest an extra £ 25 million in “new opportunities”, including its first esports betting business by 2022.

Digital growth was driven by a 25 percent increase in active players across its brands, it said.

Although online net gambling revenue was 12 percent higher for the full year compared to 2020, the company said it faced difficult comparative figures in the quarter to end-December due to restrictions and limitations on its key markets in 2020, which encouraged bored bettors at home to gamble online. Online NGR fell 9 percent during the period, but Entain said it was still “ahead of expectations”.

Greg Johnson, an analyst at Shore Capital, said the reopening of retail betting shops, where revenue rose 60 percent year-on-year in the fourth quarter, would be “a significant delta” for Entain’s full-year performance.

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