The top line
- NGR up 4% (+6% constant currency), with online up 10% (18% ex-Germany) and retail up 1%. Online driven by strong sports-betting margins of 12.8%.
- BetMGM delivered 26% sports-betting and igaming market share across states in which it operates and 32% igaming share.
- FY21 EBITDA expected to be in line with previous guidance of £850-900m despite Netherlands withdrawal (-£5m a month).
I ain’t sayin’ nuttin’: CEO Jette Nygaard-Andersen said neither her or CFO and deputy CEO Rob Wood would comment on the DraftKings bid and they were true to their word. DraftKings has until October 19 to make a further bid for the group, asked whether a change of deadline was possible, Nygaard-Andersen said she had nothing further to add on the topic other than the board was carefully “considering the proposal, its structure and value.”
If there was no deal, we see limited downside: Entain is a highly appealing standalone, with double-digit online growth, online scale, proprietary tech and US upside from BetMGM,” said the analysts at Jefferies. “We believe the DraftKings approach underscores the attractiveness of the Entain tech platform and highlights the value of Entain’s international footprint.”
Bonus slowdown: State openings in Arizona and Wyoming were “very exciting,” Nygaard-Andersen said, and the flurry of sign up bonuses and promotions was abating following the frenetic start of the NFL season. Wood added: “At the start of the NFL season there were massive amounts of acquisition bonusing, that ratio is now changing to retention bonusing” as the real money players start to emerge from the initial wave of sign ups.
Fourth quarter down: With the loss of revenues from the Netherlands (c.£5m of EBITDA per month), Wood noted the guidance for online was a double-digit decline of c.13% for the fourth quarter. The German operation continues to struggle. “In Germany, gaming revenues are stable but materially down year-on-year and we look forward to more robust policing of the market in due course,” said Wood. “We are at least approaching the anniversary of the tolerance regime.”
Regulus Partners said Germany was “an expected drag, although comparable revenue figures are complicated by the addition of a gaming turnover tax (5.3%; 80%+ revenue). The Netherlands will be a drag in Q4 and going forward into the medium-term (previously c. 3% online revenue), but the scale is not comparable to Germany exposure.
Additional articles available on Earnings + More:
- Sportradar analyst initiation
- Bally Corporation analyst update
- Churchill Downs analyst note
- Las Vegas Southwest worries
