Global sports betting and gaming company Entain (ENT) said strong momentum at the end of 2020 had continued into the first quarter of 2021 with net gaming revenues up 44% in constant currencies, giving the shares a 1.9% boost to £16.37.
With the retail estate of 4,662 shops closed during the period growth was driven by online, led by sports betting which saw a 47% including wagers up 45% while online gaming grew 23%.
The company’s strategy to expand further into regulated markets was underpinned by the acquisitions of Bet.pt in Portugal and Enlabs AB in the Baltics.
US MOMENTUM
Entain’s US business BetMGM enjoyed a strong first quarter, with market share increasing to 19% from 17% in the fourth quarter across the markets where it operates, highlighting the importance of the partnership with MGM Resorts.
The company rejected a takeover offer this year from the US casino operator, which was pitched at around £13.83 per share, so that decision looks wise so far with the shares trading 18% higher.
Entain said it consistently remained the number one iGaming operator for the whole of the US in the markets where it operates, achieving 23% market share.
The company is aiming to take the number two position in the overall US sports betting and iGaming markets, from the current third spot.
Greg Johnson, leisure guru at Shore Capital, said ‘momentum continues to build in the US market and could generate $7 billion of gross gaming revenue across the entire sports betting & iGaming market in 2021 and potentially on course for an eventual $30 billion market.’
CHANNEL SHIFT CHALLENGE
Paul Leyland, analyst at specialist gambling consultancy Regulus Partners highlighted that the longer disruption continues the more likely that the channel shift away from shops will become permanent.
Leyland also noted a ‘glut’ of additional soccer fixtures in the first quarter versus normal patterns which probably contributed to strong sports betting revenues.
He pointed out that ‘as the sporting calendar normalises next season and retail reopens, revenue growth is likely to sag considerably.’
