Entain banks on New Zealand growth to offset soft Australian market

Entain’s foray into the New Zealand market through its landmark New Zealand TAB deal is beginning to bear fruit, with the global company revealing revenue is already exceeding what it earns out of Germany.

Germany may have 16 times the population of New Zealand, but it is a heavily regulated market and having contributed up to 15 per cent of Entain’s global revenue through several gaming and betting brands a few years ago, has now slumped to just 3 per cent of its business.

While the migration of Entain’s New Zealand business onto the Australian platform is yet to be completed, chief financial officer Rob Wood revealed during this week’s global earnings update that the New Zealand market is already seeing significant growth.

“I mentioned that we are close to migrating the TAB New Zealand business onto our Australia platform and we do expect to see strong growth in New Zealand off the back of that,” Wood said. 

“Remarkably, New Zealand revenue is already larger than Germany for context.  So it’s a market that we’re excited by. So that will accelerate.”

Entain did confirm continued softness in the Australian market, where it operated the Ladbrokes and Neds brands, but that met its expectations given the trend of the Australian industry in the past 12 months.

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“Australia NGR was down 6 per cent as expected given the well-trailed market softness,” Wood said, pointing to the fact that the overall trajectory of the Australasian market was quite strong. given the New Zealand opportunity.

“We are looking forward to capitalising on the exciting growth opportunity in the New Zealand market,” he said.

Exactly what that means in dollar terms has not been set out, but the more mature, regulated markets such as UK, Ireland, Netherlands, Germany and Australia were all down for Entain, while growth continued in its BetMGM venture in the United States as well as Brazil.

The quarterly update indicated that while net gaming margin had fallen in Australia, the overall number of active players had stayed steady. This is consistent with what other wagering companies have reported, that while customers were spending less, the volume of active customers had not reduced.

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Entain expects its New Zealand deal will drive growth for the business despite its Australian brands Ladbrokes and Neds losing market share in 2023.

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Interim CEO Stella David said global Q1 results in 2024 were in line with expectations.

Group Net Gaming Revenue grew 6 per cent, driven by strong gains from the BetMGM business. Entain reported a 14 per cent market share in the United States from that business.

David, who was recently announced as the next chairman of Entain when Barry Gibson retires, said a search for a permanent replacement for Jette Nygaard-Andersen, who departed the chief executive role in December, was still underway and was “progressing well”.

“Remarkably, New Zealand revenue is already larger than Germany for context.  So it’s a market that we’re excited by. So that will accelerate” – Entain chief financial officer Rob Wood

She also said that the review announced last month into Entain’s markets, brands and verticals, which included its Australian and New Zealand businesses, was underway.

”t has no predetermined outcomes nor set timeline.  And as I’m sure you will appreciate, we’re not going to comment on any speculation, but we will provide updates if and when appropriate,” she said.