Entain eyes world cup boost as Q3 NGR rises just 2% year-on-year
Entain’s total net gaming revenue increased by 2% in Q3 2022, which was in line with the operator’s expectations.
Updating investors on trading in the third quarter, the FTSE 100-listed company said it expects group EBITDA to be in line with previous guidance of £925m to £975m, representing growth of 5-10% year-on-year.
Retail net gaming revenue (NGR) was 10% higher than in Q3 2021, while online NGR grew by just 1%.
The operator continued to feel the impact of its withdrawal from the Netherlands as part of the Dutch licensing process during the quarter.
The temporary closure of the Dutch market took three percentage points off Entain’s online growth; excluding the Netherlands, NGR was up 4% in Q3.
Nonetheless, Q3 performance was broadly in line with Entain’s expectations, CFO Rob Wood said in a call with analysts.
He stressed that Entain exited the period with a return to growth in online, after reporting a 7% dip in online NGR for H1 2022.
On a more positive note, the operator revealed a record level of active customers in Q3 2022, up 6% year-on-year and up 65% when compared to 2019, Wood said.
More importantly, he mentioned that Entain has thus far not “seen any further deterioration due to the macro conditions highlighted in Q2”.
Entain CEO Jette Nygaard-Andersen said the firm’s underlying performance remains healthy, but “we, of course, are mindful of the environment in which we operate.”
Entain CEO Jette Nygaard-Andersen: “Looking across our business, we estimate that the markets we are in are worth around $70bn to date. Our core online markets are expected to grow at around 7% to 8% CAGR over the next five years with some of our new markets growing at double digit rates.”
She said the fact that Entain welcomed more customers “is a testament to our relentless focus on the customer, as well as the quality of our products, content and talented people.
“Looking across our business, we estimate that the markets we are in are worth around $70bn to date. Our core online markets are expected to grow at around 7% to 8% CAGR over the next five years with some of our new markets growing at double digit rates,” she added.
In addition, Entain said BetMGM, its US joint venture with MGM Resorts, continued to perform strongly. It now has a 25% market share in the areas in which it operates, though that figure excludes New York.
Moreover, Q3 NGR in the US surged 90% to $400m, helped by the start of the US National Football League season.
Nygaard-Andersen concluded: “We have healthy momentum across the business and look forward to a strong finish to the year which includes the World Cup. Looking ahead, we remain vigilant of the economic backdrop.
“However, our diversified revenue base and robust business model enable us to remain confident in our ability to deliver on our growth and sustainability strategy,” she added.