29th Jul 2024 13:33
(Alliance News) - Entain PLC's BetMGM US joint-venture guided for 2024 for be a year of "investment", which Peel Hunt analysts believe is down to the sports betting and iGaming operator losing some market share.
Entain shares fell 9.4% to 588.20 pence each in London on Monday afternoon.
BetMGM reported a 6% increase in net revenue from operations to USD1 billion for the half year that ended June 30 compared to a year before. In the second quarter alone, net revenue growth was 9% annually, picking up pace from 3% in the first quarter.
The offering is co-owned by Entain and New York-listed MGM Resorts International.
BetMGM reported a USD123 million loss before interest, tax, depreciation and amortisation for the half year. However, it attributed this to 2024 being an "investment year", with the firm focused on supporting customer acquisition and enhanced player experience initiatives.
BetMGM said it has exceeded its goals for both acquisition and retention, and expects this to lead to "higher year-over-year revenue growth" for the second half of the year.
"Management is now guiding to a loss of [around] USD246 million as the business invests in growth. In reality, it is investing in trying to restore lost market share, having slipped behind while competitors FanDuel and DraftKings took advantage of better technology in the US," Peel Hunt analyst Ivor Jones commented.
"It was clear from industry data that BetMGM was losing ground, and it is positive to see a clear plan to turn the business around. Investors may, however, be discouraged by the scale of the investment apparently needed. Entain's share price is struggling for direction ahead of any clarity to be provided by the newly appointed CEO."
FanDuel is majority-owned by Flutter Entertainment PLC.
Entain last week Monday named Gavin Isaacs as its new chief executive officer.
Interim CEO & Chair Designate Stella David, who is set to succeed Non-Executive Chair Barry Gibson when he retires on September 30, will "work alongside" Isaacs in the meantime.
Entain, whose brands include Coral, Ladbrokes, bwin, Foxy Bingo and Sportingbet, announced David's appointment as chair in early April. She became interim CEO back in December, after Jette Nygaard-Andersen abruptly stepped down.
Nygaard-Andersen's resignation came after Entain entered into a deferred prosecution agreement with the UK Crown Prosecution Service in relation to alleged bribery offences at its former Turkish unit.
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.
Related Shares:
EntainFlutter Entertainment