Entain chief executive welcomes 'positive' comments from minister about gambling review

The chief executive of the parent company of Ladbrokes and Coral has welcomed comments made by government minister Paul Scully about affordability checks and the forthcoming gambling review white paper that pointed towards the possibility of less intrusive scrutiny of bettors.

Jette Nygaard-Andersen was speaking after Entain raised its profit guidance for 2022 following a record final quarter of the year, boosted by the World Cup in Qatar, although online net gaming review (NGR) was down one per cent for the whole year, with regulatory changes in the UK partly to blame.

Scully, the minister with responsibility for gambling, told the Betting and Gaming Council annual meeting last week it was not the job of government or industry regulator the Gambling Commission to tell people how much they could afford to bet and that, instead of intrusive affordability checks, he favoured "financial risk" checks which would be "frictionless".

Speaking to analysts, Nygaard-Andersen said the minister's comments appeared to be advocating freedom of choice, adding: "They also want to talk about frictionless checks instead of affordability checks and what comes with that, which I think is all positive."

Nygaard-Andersen said she hoped the long-delayed white paper would finally be published this quarter, although she did say she thought it "might slip" into the second quarter of the year, and that it would provide some clarity for the industry.

She added: "I think for a number of these measures, especially when we talk about frictionless checks, it's pretty unproven so it will not only require consultation but also a period with tests and trials and implementation. We will see what comes out and how much time we will need to test these things when it comes to the different consumer checks."

In its trading update, Entain revealed the group's core earnings last year are expected to be in the range of £985 million-£995m, ahead of the previous range of £925m-£975m, and representing growth of around 12 per cent on the previous year.

A successful World Cup helped Entain achieve record online net gaming revenue (NGR) in the fourth quarter, up 12 per cent year on year despite disruption from the weather, including to racing fixtures caused by December's freezing conditions.

Active customers were also at record levels in the fourth quarter, up 14 per cent versus the prior year, while retail NGR was up ten per cent, with volumes in the UK driven by strong growth in gaming and betting terminals.

The World Cup in Qatar boosted Entain's figuresCredit: Richard Sellers

Nygaard-Andersen told analysts: "We saw fantastic customer engagement during the World Cup with many customer initiatives across our brands all resonating well."

Over the full year Entain said NGR was up ten per cent in constant currency, although that figure rose to 15 per cent when Entain's 50 per cent share in US joint venture BetMGM was included.

The number of active customers was up seven per cent year on year, while full-year retail NGR was up 66 per cent with volumes ahead of pre-Covid levels.

As was revealed last week, BetMGM is expected to become profitable in the second half of 2023, with net revenue reaching $1.44 billion (approx £1.17bn/€1.32bn) last year, ahead of the previous forecast of $1.3bn.

Nygaard-Andersen said: "We have continued to grow our revenues in a sustainable and diversified way by expanding our global footprint, broadening our customer appeal, entering new areas of entertainment, and providing a safe environment for our customers.

"All of this has led to a record number of active customers in the fourth quarter, as well as a full-year Ebitda [earnings before interest, taxation, depreciation and amortisation] performance ahead of our previous expectations.

"We have started 2023 with good momentum across the business and remain confident in our ability to continue delivering on our growth and sustainability strategy in the year ahead."

Analyst David Brohan at stockbrokers Goodbody described the news from Entain as a "solid update" and that guidance about profits was a "positive surprise".

Entain's share price was up more than two per cent at 1,519.5p on Wednesday afternoon.

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