Thursday, December 8, 2022
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Entain believes white paper movement afoot despite government ‘turmoil’

Entain’s CEO, Jette Nygaard-Andersen, has expressed that the firm expects to see some movement from the UK government on the repeatedly delayed 2005 Gambling Act review “in the coming weeks”. 

Following publication of the group’s Q3 trading results earlier this week, in which the group reported a two per cent GGR increase, Nygaard-Andersen, along with CFO and Deputy, Rob Wood, answered questions on the FTSE100’s firm’s corporate development and growth ambitions.

On the white paper review, Entain’s CEO noted: “Aside from the recent turmoil around the new government – they have a lot of pressing issues and are just back from the annual party conference – we expect to hear more in the coming weeks.

“It might be slipping down the list of priorities, but we want to get the white paper out and get it into publication. 

“The new government’s approach has very much been pro industry, they are advocates of freedom of choice and of not having a ‘nanny state’ regulation in place. From our perspective it is sensible sounding, and hopefully will lead to a balanced and proportionate regulation.”

Adding to the thoughts of Nygaard-Andersen, the firm’s CFO was also questioned on Entain’s development in Germany where conditions imposed by the Fourth Interstate Gambling Treaty (GlüNeuRStv) framework have allegedly been difficult for market participants to adjust to. 

“The big picture here is, going back two years there has been major regulatory reform in Germany which has seen our revenues come off quite significantly,” Wood continued.

“It’s only upside from here – the big catalyst is getting gaming licences issued, so we can distinguish between the licensed and unlicensed operators and see a clampdown on unregulated operators.” 

One of Entain’s key predictions in the update was that the FIFA World Cup, commencing next month, will have a positive effect on year-end trading, in tandem with NFL-related trading in the US. 

Wood asserted that “we’ll get a bigger number than expected” from the tournament due to it falling entirely in one quarter, and despite concerns about it not being “as fully incremental” as previous World Cups, the group remains “excited about prospects”.

He continued: “The whole tournament falls within one quarter this year, I think we’ll get a bigger number than expected. Timing-wise it won’t be as fully incremental as a usual tournament, but there are reasons we’re positive about that. 

“In Brazil it’s more incremental, and we like that there will be less Europeans on holiday, and the lower leagues will carry on so there will still be packed fixture lists across Europe.

“The time of day is favourable, past world cups have been unhelpful on that. We have a more congested fixture list on either side of the tournament, typically there’s a lag between the final and start of the new season and you lose momentum.”

Delving further into its US market ventures, Nygaard-Andersen expressed her anticipation for the California betting regulations, but stressed it is a market that does not appear to be coming in the foreseeable future. 

“While that is disappointing in itself, we can have another go at it in two years time,” she said, observing that recent polling suggests that neither proposition in favour of legalisation will succeed.

“On the wider outlook, over time we expect legislation in sports betting in California, it’s difficult to imagine that a state like California with 21 professional sports franchises and a population that loves their teams will not legislate sports betting.”

Lastly, Wood addressed Entian’s long-term strategy for debt reduction, with the company having taken out a €700m bridge loan underwritten by several leading banks to support the SuperSport acquisition.

He explained: “We’ll continue to look at a mix of bonds and term loans, we’ll get SuperSport financing done first and then assess the market and monitor it, and when we feel the time is right we’ll move forward with a mix of bonds and loans.”

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