Entain’s Australian operations continue their rebound with the global gambling giant reporting its Australian revenue grew by eight per cent over the most recent quarter.
Announcing its quarterly update, Entain’s global fortunes are also on the up, with the Group’s global net gaming revenue also increasing eight per cent, with EBITDA projections revised upwards to $1.1 billion as a result.
While growth in Australia was lower than that of the USA (18 per cent) and Brazil (48 per cent), it was a big step in the right direction after a prolonged drop off in Australian wagering numbers off the back of the post-pandemic peak. It was the second successive quarter of growth in the local market.
“We expect that means that the market is improving and we're taking a little bit of share, but sports margins also provided a tailwind in the quarter,” Entain CFO Rob Wood told an investors’ call.
The precise numbers for the Australian and New Zealand business weren’t detailed in the quarterly presentation, instead rolled into an overall international growth figure of nine per cent. That includes markets outside the UK and Ireland and its business with MGM in the USA.
But asked further about the Australian results, Wood said there were a lot of green shoots.
“We know for us that we've gone from plus five in Q2 to plus eight in Q3. My sense is the market is improving. And we've annualised through things like BetStop, which had an impact from last summer,” he said.
“But our expectation is we've probably taken a little bit of share over the last couple of quarters. But we'll see from our own side, there's been a huge amount of work on things like improving pricing, generosity to drive improved net win margin (and) really focusing on the customer profile.”
Bren O’Brien
Wood was also questioned about whether there was a split in the growth between sports and racing in Australia. A two-speed wagering recovery, where sports was outpacing racing growth, is something that has been highlighted by several of Entain’s major Australian competitors.
“I think we're not the operator who's constantly pointing out the difference between the two. We are mostly racing, so our trends really are largely racing trends,” Wood said.
Growth in Ladbrokes’ and Neds’ racing revenue in Australia would be good news to the ears of racing authorities in Australia after significant drops in racing turnover more broadly over the last two years which has challenged wagering models.
It was a strong global result for new Entain CEO, Australian-born Gavin Isaacs, to announce only six weeks since taking over from Stella David.
“Entain has this clear strategy, which since the start of this year, the entire business has been focused on delivering. That is execution-focused on driving growth in both core and US, as well as delivering margin improvement. Importantly, we've been making progress and it is bearing fruit,” Issacs told the earnings call.
“Entain is a very good business, operating in a highly attractive global industry and is on the path to becoming a great business.
“We have strong brands and an enviably diverse global portfolio with the highest quality of earnings in our industry.”
Bren O’Brien
It was also announced that Entain had reversed its decision to sell its Crystalbet business in Georgia.
“After assessing the market, we have concluded that the business is more valuable to the group remaining as part of our portfolio. We will continue to assess all our portfolio. We will only sell assets at a proper valuation and if it makes strategic sense,” Issacs said.
“Entain is just at the beginning of its journey. There is a long way for us to go. Our number one priority is to make sure that our number one priority is operational excellence.”
That emphasis on operational matters is an indication of the change of strategy that has taken place since the departure of Jette Nygaard-Andersen from the CEO role in December last year.
