Entain Continues Global Expansion
Gambling has always been a worldwide industry but the past few years have seen great expansion. Companies such as Entain don’t just want their business to be successful in the UK. Europe, and North America expansion is also a high priority.
That’s been particularly the case in the past four years. A groundbreaking US Supreme Court Judge ruling in 2018 was good news for individual American states. It allowed them to decide for themselves whether or not to legalize gambling, especially in sports.
Since then, over 30 US states have done just that. Discover which states had legalized online betting you can use this online betting offers guide for example.
It sees them receiving a boost to their budgets thanks to all the gambling tax revenue received. It’s also good for the betting companies and not just those in America.
Companies such as Entain have been busy expanding their business into the US. Working with BetMGM, Entain have been busy forging a market share in the American gambling industry. There are other areas to concentrate on though. Canada for example, with Ontario this year allowing private companies to open sportsbooks in the province.
Entain (who own brands such as Ladbrokes, Coral and Bwin) also have their eyes on expansion in Europe. This year will see them acquire SuperSport who are the largest betting and gaming brand in Croatia. The deal will see Entain own 75% of the company and cost them an initial £600m. That figure may increase if SuperSport performs well in 2022 which looks likely.
This will be their fifth acquisition of 2022 and they are keen on expanding further in Central and Eastern Europe. Entain Chair Jette Nygaard-Andersen is of the opinion that expansion in Central and Eastern Europe is the way forward and “a core component of our growth strategy.”
The success Entain are having is reflected in their latest financial figures. Their half-year report showed an increase of 18% in profits. They recorded operating profits of £246.5m for the first half of 2022. They’re even paying a dividend with £100m expected to be distributed this year.
The pandemic saw land-based bookies closed. That meant customers had to switch to online betting.
With the betting shops open again, online net gaming revenue has fallen 7%. The pandemic may not be interfering with their business as much now but the cost of living is. With inflation continually rising, there’s a fear that gamblers won’t be placing quite so many bets with increased spending on food and energy costs.
Another problem in the UK for Entain is regulation. Once the new Prime Minister takes office, it won’t be long before the White Paper that looks at how to reform the 2005 Gambling Act will be published.
It’s long overdue and may be subject to more review depending on the view of the new Prime Minister. Strong measures are likely to be included, especially for online betting which is not included in the 2005 Gambling Act.
These could include reducing the maximum stake for online casino games. A similar measure was introduced in betting shops for the gambling machines and that cost bookmakers a great deal of revenue. Doing so online would again see finances hit.
Affordability checks are also likely to be made more stringent. However, while the wait continues for the White Paper to be published, Entain are having plenty of problems with the UK Gambling Commission (UKGC).
Often criticised for not being tough enough, the UKGC have totally changed track in the past year. They have clamped down heavily on licence holders who fail to protect their customers enough. Areas such as social responsibility and anti-money laundering are closely inspected and fines are now commonplace.
The past week has seen Entain ordered to make a record £17 million regulatory settlement for failure in those areas.
A UKGC investigation in 2019 and 2020 found too many examples of cases where customers were allowed to place six figure sums over a period of time with no or little checks on just where their funds for such bets were coming from.
This is the second time that Entain has been in trouble with the UKGC. An audit will now take place to show that they are indeed complying with new additions that have been made to the terms of their licence.
The UKGC have warned Entain that the possibility of their licence being taken away is a possibility. To lose their licence to operate in the UK would be appalling news for Entain and they will need to do all that they can to avoid that happening.
With stricter regulation on the way, Entain will be looking to continue their expansion into other global markets.
