LeoVegas ordered to withdraw “irresponsible” BetUK radio advert

The advert in question aired in September 2023. It featured retired footballer Adebayo Akinfenwa speaking about how he was a brand ambassador for BetUK.

Akinfenwa referred to several safer gambling tools available to BetUK players. These include deposit limits, scheduling reality checks and setting time-outs. He also encouraged players to “always gamble responsibly with BetUK”.

However, a single complaint was filed with the ASA over the ad’s possible appeal to under-18s. It challenged whether the ad featured an individual likely of strong appeal to children and therefore breached the BCAP Code.

LeoVegas and BetUK reject complaint

Responding to the complaint, LeoVegas and BetUK said they did not believe the advert appealed to under-18s. They stated as Akinfenwa is 41 and now a retired footballer, he is unlikely to be popular with children.

The response also referenced how Akinfenwa spent his career in the lower leagues, outside the top-tier Premier League. As such, any potential for appeal to under-18s would be low.

Outside football, BetUK said Akinfenwa’s general media profile did not indicate he was likely to be of strong appeal to children. The operator also referenced his clothing range, which does not include any child-related products.

As for social media, Akinfenwa has accounts on Facebook, Instagram, Twitter/X, TikTok and Snapchat. For Instagram, 8% of his total followers were under 18, while on Snapchat, this was 18%. Age demographics are not available for Facebook, Twitter/X and TikTok.

BetUK also said the ad did not feature any content of a childish tone. It also played during a radio show likely to have an adult audience. Radiocentre, the commercial body for UK radio stations, sided with BetUK in the case.

ASA upholds complaint 

However, despite this response, the ASA upheld the complaint, referencing the BCAP Code. This states marketing communications for gambling must not be likely to be of strong appeal to children or young persons. Adverts must also not include people of characters likely to appeal to under-18s.

The ASA acknowledged that Akinfenwa played outside the top flight and that BCAP guidance classifies such players as “low risk”. However, the authority added that players could be of “moderate risk” due to their social and other media profiles. On this basis, the ASA said Akinfenwa could appeal to children.

Going into further detail on its decision, the ASA referenced Akinfenwa’s wider profile. This includes his popularity due to his physical strength, which led to him being ranked as the strongest player in several editions of the FIFA video game, which is played by children. 

“We considered the manner in which he was portrayed in the media and by which he had marketed himself would have led some football fans to view him as a cult hero in the game,” the ASA said.

“We therefore considered that his media profile, alongside our view that he was unusually well known for a former lower league footballer, would have placed him in the ‘moderate risk’ category of the guidance.”

Social media following a concern 

As for his social media presence, using the data provided by BetUK for followers under the age of 18 across Instagram and Snapchat, this suggests that at the time at least 157,000 of his followers were under 18.

BCAP guidance states a “generally high social media following that attracts a significant absolute number of under-18 followers, as determined through quantitative or qualitative analysis, is likely to be considered an indicator of ‘strong’ appeal”. The ASA said this applied to Akinfenwa.

“We considered that over 157,000 followers aged under 18 years, with the true total figure likely higher due to the absence of data for the other social media platforms, was a significant number in absolute terms,” the ASA said.

“Although his career as a lower league footballer and his media profile in isolation would have placed him in the ‘moderate risk’ category, we considered that because he had such large numbers of social media followers who were under 18 years due to his career and profile, Akinfenwa would be placed in the ‘high risk’ category and was likely to be of strong appeal to under-18s.”

Ruling on the case, the ASA said the advert breached BCAP Code (Edition 12) rules 17.4 and 17.4.5 in reference to gambling.

As such, it said the ad must not appear again in its current form. The ASA also told LeoVegas Gaming and BetUK not to include a person or character with strong appeal to under-18s in any future adverts.

GAN reduces net loss despite revenue decline in 2023

Group revenue for the 12 months to 31 December 2023 was $129.4m (£101.1m/€118.3m). This was 8.6% lower than the $141.5m that GAN posted in the previous year.

With net profit growth, 2023 proved to be something of a mixed year for GAN. The year will be perhaps best known for the strategic review that launched in Q1, looking at a “range of strategic alternatives” to improve value for shareholders.

Sega Sammy acquisition edges closer

Ultimately, this led to Sega Sammy Holdings, the gaming heavyweight formed by the merger of Sega and Sammy Corporation, agreeing to acquire GAN for $107.6m. The deal was last month given the green light by GAN shareholders. Sega Sammy is seeking to use GAN to support its online gambling expansion plans in the US.

As to how far GAN continues in 2024 as a standalone business, this remains to be seen. The Sega Sammy deal is expected to close before the end of the year, should it gain the necessary approvals.

If this is the case, GAN would merge with the Sega Sammy Creation arm of Sega Sammy and form a new special purpose company. GAN would be the surviving corporation after this merger.

Last year also saw long-serving Dermot Smurfit step down as CEO. Smurfit departed at the end of September. Seamus McGill, a non-executive director since 2014, was appointed as interim CEO before taking the role on a permanent basis last month.

B2B and B2C declines for GAN

Breaking down GAN’s performance, revenue fell across both B2B and B2C, leading to the overall decline.

B2C remains its primary source of revenue at $86.2m, but this was 1.5% behind the previous year. GAN said this was due to a decline in active customers in Latin America.

As for B2B, revenue here fell 20.2% to $43.2m in 2023. This decline, GAN said was down to a decrease in contractual revenue rates, related to the expiration of an exclusivity period with a B2B customer.

In terms of geographical performance, activity in Europe drew the most revenue at $47.8m. Latin American operations generated $39.9m in revenue, the US $31.8m and the rest of the world $9.9m.

Lack of impairment costs push net profit up

Looking at spending, total operating expenses for 2023 were down 52.2% at $159.7m. This sharp drop was due to the 2022 figures including $166.0m in impairment charges, whereas for 2023, there were no such costs.

Other spending amounted to $4.0m, meaning pre-tax loss for the year was $34.3m, which was an improvement on the previous year’s $193.6m loss.

GAN paid $138,000 in income tax, leaving a net loss of $34.4m, compared to $197.5m in 2022. However, adjusted EBITDA slipped from a positive of $6.0m to an $8.4m loss.

Similar story for GAN in Q4

As for the final quarter of the year, this made for similar reading with revenue falling 16.8% from $36.9m to $30.7m. B2C revenue was down 17.1% to $18.9m and B2B revenue slipped 16.3% to $11.8m.

Geographically, Europe revenue amounted to $12.1m, the US $8.5m, Latin America $7.1m and rest of the world $3.0m. Revenue was higher in all markets with the exception of Latin America. 

Turning to spending, operating costs stood at $39.3m, a stark improvement on 2022 when $182.4m was spent as a result of the impairment charges. Other spending reached $1.0m, meaning a pre-tax loss of $9.6m, compared to $145.5m in 2022.

GAN received $247,000 in tax benefit, meaning net loss was $9.4m, again much shorter than $147.7m in the previous year. Adjusted EBITDA, however, came in at a loss of $3.9m, which was wider than 2022’s $368,000 loss.

Retail loss fails to halt February year-on-year sports betting growth in Iowa

Revenue was comfortably higher than $11.9m in February 2023. However, the monthly total was 38.5% less than the $22.1m generated in Iowa in January of this year.

Online sports betting revenue reached $13.8m in February, although the final total was dented by a $215,241 retail loss.

As for handle, players in Iowa wagered some $220.6m on sports during the month. This was 13.8% ahead of $193.9m last year but 15.0% behind $259.5m in January.

Of this spend, $203.8m was bet online and $16.7m at retail sportsbooks across the state.

FanDuel and Diamond Jo Dubuque still the ones to beat in Iowa 

As has been the case for some time, FanDuel and Diamond Jo Dubuque remain the market leaders in Iowa. For February, the partnership generated $4.6m in revenue from $56.5m in wagers.

DraftKings and partner Wild Rose Jefferson again placed second with revenue of $2.2m. This came as players wagered a total of $36.2m across retail and online platforms during the month.

Not far behind in third was sister property Wild Rose Clinton, another DraftKings partner, on $2.0m from $28.8m. The third Wild Rose property in Iowa, Wild Rose Emmetsburg, followed with $1.8m off $22.5m.

February also marked the Iowa debut of Fanatics, which replaced the PointsBet brand in the state. Revenue from its partnership with the Catfish Bend Casino amounted to just $62,402 from $4.4m in wagers.

Iowa players won $206.6m in total for the month, while the state collected $936,744 in tax.

GeoComply: Expect North Carolina to be a top market

Geolocation specialist GeoComply tracked 5.4 million location checks from 370,000 active accounts between noon of 11 March and noon of 13 March.

This beats the two million checks from 134,000 active accounts in the first two days of live betting in neighbouring Virginia in 2021. North Carolina has a population of 10.8 million as compared to 8.8 million in Virginia.

On Monday (11 March) North Carolina regulators launched eight digital platforms for statewide mobile betting.

The majority of the location checks came from accounts in the central part of the state where the major cities, Charlotte, Winston-Salem, Greensboro and Raleigh-Durham, form an upside down “U”.

The area is a hotbed of college basketball. As the college basketball season winds down and conference championships are in progress, North Carolina is currently ranked No 4 in the AP Top 25, while Duke is at No 11.

South Carolina is ranked No 15 and GeoComply performed 6,175 location checks in that state in the first 48 hours. Sports betting is not legal in South Carolina.

early numbers from geocomply indicate that north carolina should be a leading Wagering market.

North Carolina betting launches with March Madness on horizon

“It’s early, but North Carolina is already delivering on lawmaker expectations when they legalised online sports betting last year,” Lindsay Slader, GeoComply’s SVP of compliance, said via press release.

“The state’s well-structured approach to mobile sports betting safeguards consumers and opens up significant revenue streams.”

Monday’s launch of online sports betting dovetails with college basketball’s biggest event. The NCAA men’s basketball tournament tips off this weekend with Selection Sunday and the first tournament games are set for 19 March.

Depending on how the conference championships play out, Wake Forest or UNC-Charlotte could also get into March Madness. North Carolina entered the ACC conference championships as the top seed. Duke is second and both play their first tournament game Thursday.

Every major national operator is now live in North Carolina when operators launched around noon local time. This includes a new competitor in Underdog Sports, after the daily fantasy operator made its digital sports betting debut.

Caesars Sportsbook was taking online bets in Indian Country through its partnership with the Eastern Band of Cherokees as early as 1 March.

Tabcorp CEO Rytenskild resigns amid allegations of “offensive” language

Rytenskild has served as CEO of Tabcorp since May 2022. He joined the group in 2000 and worked his way up the business, serving in a series of roles before taking the top position.

However, Rytenskild will now exit the business, with Tabcorp confirming his resignation in a statement issued today (14 March). 

Rytenskild is accused of using inappropriate and offensive language in the workplace. In the statement, Tabcorp said its board had become aware of the allegations, with this language being “inconsistent” with his leadership.

Following discussions with the board, Rytenskild tendered his resignation and will step down immediately. Rytenskild will receive only termination payments in line with Australian law and forfeit all unvested short-term incentive and long-term incentive awards.

“Tabcorp expects its leaders to uphold company values at all times and will not hesitate to take action to uphold expected standards of conduct,” Tabcorp said. “To protect the privacy of those involved, Tabcorp does not intend to make any further comment in relation to the conduct.”

Rytenskild “regrettably” leaves Tabcorp

Commenting on the news, Rytenskild said that he did not remember making the comments. He added that he would be leaving Tabcorp, where he was worked for 22 years, with regret.

“I don’t recall making the alleged comment and it’s not language I would usually use, but I have regrettably agreed to resign,” Rytenskild said. “Tabcorp has been an enormous part of my life for many years, and I believe in the journey the company is on.”

Rytenskild spent the first 10 years of his time with Tabcorp in various general manager roles. He went on to become executive general manager for distribution and then chief operating officer of keno and gaming.

More recently, he was managing director of wagering and media from September 2017 to May 2022. After this, he took on the roles of both CEO and managing director. 

Chairman Akhurst to take the helm

Following the resignation, Tabcorp chairman Bruce Akhurst will take on additional duties as executive chairman. He will remain in this role while a search for a permanent replacement is conducted.

Executive search business Maritana Partners has been appointed to commence a global search for a new managing director and CEO.

“The board regrets Mr Rytenskild’s employment has ended in this way and acknowledges his commitment to Tabcorp’s growth over more than two decades, including the last two years as MD & CEO and his contribution to the transformation of the company” Akhurst said.

“Today’s change does not impact the strategic direction of the company. We have the depth and capability across the executive and the senior leadership team to continue our transformation.

“We remain focused on executing our strategy at pace, transforming our competitiveness, growing market share, levelling the playing field for fees, taxes and regulation, and reshaping the business to deliver a more efficient and effective organisation. Tabcorp is on track to deliver this and create a growing and more valuable company for shareholders.”

Impairment charges push Tabcorp to net loss in H1

The resignation will come as a further blow to Tabcorp. Last month, the group published its H1 results, with these showing a decline in revenue and a heavy net loss.

In the six months through to 31 December, group revenue was down 5.1% to AU$1.21bn (£625.4m/€732.1m/US$800.6m), with a decline across both its two core businesses.

Wagering and media revenue fell 4.2% year-on-year to $1.12bn, reflecting a decline in the overall wagering market.  Also in this segment, revenue from the Media and International business declined 5.4%. 

As for gaming services, revenue dropped 14.5% to $93.0m. Tabcorp said this reflected the impact of the sale of eBet and Max Performance Solutions.

Expenses were also higher year-on-year in H1, with the main sticking point being $852.0m in impairment charges. This, coupled with revenue decline, left a $641.7m net loss, in contrast to the previous year’s $53.2m net profit. In addition, EBITDA fell 34.7% to $131.7m.

Slight boost with tax refund

Despite the net loss, there was some positive news during H1. In September, Tabcorp was able to resolve a tax dispute with the Australian Taxation Office, with the business set to receive an $83m tax refund.

This case relates to income tax treatment of payments for various licences and authorities. Tabcorp says it paid the disputed amount of tax liabilities and interest in full.

Also in H1, Tabcorp was awarded exclusive rights to wagering and betting in Victoria for the next 20 years. Tabcorp, which has held its current licence since 2012, will pay Victoria’s government over $1.00bn during the next two decades.

However, there were also some regulatory issues. These included a record $1.0m fine in Victoria over its conduct during a major system outage in 2020.

Maryland second state with lower February sports betting handle

Handle was up 30.4% from $339.4m in February 2023. However, it was 18.8% behind the $545.0m bet in Maryland during January this year.

The drop in handle follows the same trend as New York, with the Empire State announcing a reduction in February handle despite the Super Bowl. However, this could also be attributed to the shorter month of February and the NBA All-Star break that ran between 16-21 February.

Of the total in Maryland, $428.4m was wagered online, including $13.4m in free bets, and $14.1m at retail sportsbooks.

Taxable win – the amount remaining after deducting prizes, promotional wagers and other amounts – reached $28.1m. This was 51.2% ahead of $18.6m last year but 48.9% short of January’s $55.0m.

Mobile taxable win amounted to $27.1m, while retail wagering generated $942,233.

Total contribution to Maryland State in February reached $4.2m, up 50.5% from last year.

Live! Casino and FanDuel continue to lead in Maryland 

Live! Casino Hotel and FanDuel remain the market leaders in online sports betting. For February, handle stood at $191.3m and taxable win $16.6m.

Placing second was DraftKings with a $137.0m handle and $8.0m taxable win. BetMGM rounded off the top three, taking $37.3m in bets and posting $1.4m in taxable win.

As for retail, Oceans Down took the most bets ($2.9m) generating $442,849 in taxable win. Narrowly behind was Live! Casino with $2.7m in wagers and $202,491 total taxable win.

Year-on-year casino growth

Turning to the casino market in Maryland, revenue for February amounted to $159.2m. This was 1.4% ahead of last year and 3.9% higher than $153.2m in January.

Video lottery terminals generated $109.2m of revenue in February. Table games accounted for the remaining $50.0m.

BetMGM National Harbor led the way with $66.8m in total revenue. Live! Casino was second with $59.3m, then Horseshoe Casino on $16.0m for the month. 

Fiscal year growth for Maryland 

Looking at the fiscal year to date, beginning with sports betting, handle for the eight months to February hit $3.53bn. This is 120.6% higher than at the same point in the previous year.

Taxable win from sports betting rocketed 331.1% to $247.0m, with state contributions also 330.9% higher at $37.1m.

As for the casino sector, revenue was 6.5% lower at $1.29bn for the same period. 

Mohegan confirms Ari Glazer as new CFO

Glazer will replace Carol Anderson as CFO of Mohegan. The group announced Anderson would be stepping down from the role in October last year. Anderson will exit on 31 March, with president and CEO Ray Pineault to oversee finance functions until Glazer joins in May.

As CFO, Glazer will assume responsibility for all finance activities at Mohegan. These include financial planning and analysis, capital markets, accounting, tax, treasury, procurement and cash management. He will report to Pineault.

Glazer joins Mohegan after more than 20 years with investment bank Citigroup. Here, he most recently served as managing director and global head of gaming and hospitality client coverage. While working with Citigroup, Glazer advised leading companies in the gambling industry on strategic and capital markets transactions.

Prior to his time with Citigroup, Glazer worked for another investment bank in Bear Stearns & Company. In addition, he had a spell at Nextel Communications.

“I am honoured to join Mohegan and to contribute to the company’s dynamic and innovative trajectory,” Glazer said. “I look forward to leveraging my experience to enhance our financial performance, optimise our capital structure and support Mohegan’s ambitious vision as its new CFO.”

Pineault added: “Ari embodies the visionary leadership and deep financial insight that Mohegan is looking for at this stage of our growth. His skills will be key to our strategy of diversifying Mohegan’s portfolio and strengthening our fiscal foundation.”

Record revenue for Mohegan in 2023

The appointment comes on the back of a record 2023 for Mohegan, during which revenue hit an all-time high of $1.67bn ($1.30m/€1.53m).

Mohegan also generated adjusted EBITDA of $399.9m, the second highest in its history. This was just below the $403.9m record set in full-year 2022. This was despite a $4.7m interest impact from Mohegan’s Niagara debenture conversion and related transactions.

A busy Q4 helped push Mohegan to record revenue in 2023. Net revenue for the final three months of the year amounted to $444.3m.

Gaming made up most revenue for Q4 at $297.8m. The remaining net revenue was made up of food and beverage, hotel, retail and entertainment and other.

However, it was not all good news in Q4. Total operating costs and expenses for the quarter increased by 13.3% to $396.2m, Other expenses hit $60.6m, leaving a pre-tax loss of $12.5m.

Income tax provision of $6.3m brought total net loss to $18.8m. This was in stark contrast to net income of $29.6m in the previous year.

Waterhouse VC: Spotlight on industry leaders

In every industry, there are prominent figures who stand out and the wagering industry is no exception.

This month, we shine a spotlight on three distinct leaders in the industry: Tim Heath, a crypto wagering pioneer; Peter Jackson, CEO of Flutter Entertainment; and David Walsh, renowned as one of the world’s largest professional horse racing gamblers.

Over the last decade, the online wagering industry has expanded significantly through the proliferation of mobile-focused platforms. Heath and Jackson lead companies at the forefront of digital innovation in the industry.

YOLO

Originally from Australia, Heath is a serial wagering industry entrepreneur and venture capitalist. After university, he started a software development and ecommerce firm, Heathmont.net.

In 2013, he launched Coingaming Group, a crypto wagering operator and supplier which rebranded to Yolo Group in 2021. Yolo Group is now most known for its large B2C wagering operators, Sportsbet.io and Bitcasino.io. We have discussed the rapid growth of crypto wagering and Sportsbet.io in previous newsletters.

Southampton FC sporting the Sportsbet.io logo. Source: Sportsbet.io

With over 600 employees, Yolo is a well-established group of businesses across wagering and venture investing. Yolo’s B2C brands pioneered the integration of streaming for all major sports and were very early innovators of the now common “cashout” feature.

Sportsbet.io and Bitcasino.io offer players withdrawal times as fast as just 1.5 minutes, ranking among the swiftest in the industry.

Heath’s relentless focus on customer experience has made Sportsbet.io one of the largest global crypto wagering operators. The company records over US$2.7bn of turnover per month. To put that in perspective, in 2023, Australia’s largest operator averaged US$1.2bn of turnover per month and has around 50% market share in the country.

What’s next for him? One thing he would like to reform is the international payments landscape, which today predominantly relies on the SWIFT system. He believes that SWIFT has several inefficiencies, such as delays and lack of privacy.

World domination

Jackson, meanwhile, has been the CEO of Flutter Entertainment since January 2018. Under his stewardship, the company’s valuation has doubled and it is now the world’s largest publicly listed wagering company. Only Bet365 – privately owned by the Coates family – comes close to Flutter in global scale.

Flutter is the only publicly listed B2C wagering operator in our portfolio at Waterhouse VC.

Jackson graduated with a degree in manufacturing engineering from Cambridge and honed his skills during a three-year stint at McKinsey. He then transitioned to various roles at the Halifax Bank of Scotland until its acquisition by Lloyds in 2009.

At 34, he was appointed the CEO at Travelex, a foreign exchange company. He led the company for five years, bolstering revenues and eventually overseeing its £1bn sale. He served on the board of Betfair from 2013 before being appointed Flutter’s CEO five years later.

Early on in his tenure, Jackson recognised the importance of scale and efficiency in an industry which is highly taxed and highly regulated. Leveraging his experience in consulting and banking, Jackson has developed operations that lead their respective markets through a combination of organic expansion and M&A activity – such as MaxBet and Junglee Games.

Flutter’s global brands. Source: Flutter Entertainment Plc

The flywheel effect

By leveraging the broader Flutter Group’s access to global industry knowledge, technological development, customer insights and data analytics, each of Flutter’s divisions benefits from a “flywheel” effect.

This flywheel has driven Flutter’s US business, FanDuel, to an 11-fold increase in revenue from US$300m in 2018 to around US$3.3bn in 2022, with an industry-leading 37% market share today.

Flutter’s flywheel. Source: Flutter Entertainment Plc

Jackson was instrumental in effecting the recent dual-listing of Flutter on the New York Stock Exchange (NYSE:FLUT). The company listed on 29 January this year, enhancing access to US capital markets and simplifying the provision of stock incentives to employees based in the United States.

Historically, US equities have commanded higher valuations compared to other global equity markets. Flutter’s shareholders stand to gain from an increased valuation, while the company could leverage its premium valuation to raise cheaper additional capital.

Peter Jackson ringing the opening bell on the New York Stock Exchange. Source: Youtube

MONA

The wagering industry provides entertainment to people at a cost. There is a very small group of people who bet profitably – they do not need to pay for the entertainment.

We believe that, globally, there are fewer than 50 betting syndicates capable of winning at scale. David Walsh is regarded as one of the world’s most successful gamblers through the syndicate in which he is partnered with Zeljko Ranogajec.

The syndicate bets globally on horse racing, sports, lotto, casino and financial markets. It has been reported that the syndicate turns over in excess of $3bn per year. However, some estimate that their global turnover is far higher.

Walsh invested $75m to open the Museum of Old and New Art (MONA). As a result of his contributions, Walsh was honoured as an Officer of the Order of Australia (AO) for his outstanding service to the visual arts and for his support of various cultural, charitable, sporting and educational organisations.

Can emerging syndicates compete?

Professional bettors are incredibly bright and have a rare skillset. They understand the unique dynamics of each sporting code/casino game/lottery back to front.

They are able to model 100s of factors that predict the “true” likelihood of a result. Then they can put it all together to run a professional betting business, which relies on managing a huge number of people.

Focusing on racing in particular, a team of experts in mathematics, statistics and computer science regularly develop, maintain and refine algorithms that assess vast amounts of historical racing data and individual factors specific to racing – such as track conditions, jockey statistics, sectionals, weather and bloodlines – to inform betting decisions.

As discussed last month, racing betting syndicates are also advantaged by receiving rebates on their wagers regardless of the outcome. To qualify for the rebates, syndicates must wager vast amounts of money. The rebates effectively enhance their existing “edge”, making it increasingly challenging for emerging syndicates to compete in racing.

Waterhouse VC is a fund for wholesale investors, specialising in global publicly listed and private businesses related to wagering and gaming.

Since inception in August 2019, Waterhouse VC has achieved a gross total return of 2,858% as at 29 February 2024, assuming the reinvestment of all distributions.

Entain awards 846,067 shares to interim CEO David and deputy CEO Wood

David, who took over as Entain’s interim chief executive in December following the departure of former CEO Jette Nygaard-Andersen, has been awarded 526,626 shares of €0.01 each. This is under the business’ 2017 Long Term Incentive Plan (LTIP).

Wood, meanwhile, has been awarded 307,202 shares of €0.01 under the LTIP rules. These awards are expected to vest on 11 March 2027.

The LTIP payments are subject to continuous employment, as well as satisfaction of certain financial targets which will be revealed in Entain’s 2023 Annual Report. This report is set to be published on 22 March. There will be a two-year post-vest holding period placed on the post-tax number of shares vesting from the LTIP awards.

Entain has also awarded Wood 12,239 shares, again worth €0.01 each, for his 2023 bonus under the business’ Annual and Deferred Bonus Plan (ADBP). According to the company’s remuneration policy, 50% of executive directors’ annual bonuses are to be deferred in shares. Wood’s ADBP shares are expected to be awarded on 11 March 2027.

Crucial 2024 for Entain

A turbulent 2023 set Entain up for an eventful 2024, as it looks to steady the ship.

A settlement with His Majesty’s Revenue and Customs (HMRC) and the Crown Prosecution Service (CPS) in the UK, relating to Entain’s historical activities in Turkey, set out a £585m (€684.4m/$748.2m) financial penalty. Entain will also pay a charitable donation of £20.0m and contribute £10.0m to CPS and HMRC costs.

Just days after the settlement was announced, chief executive Nygaard-Andersen left her role with immediate effect. Entain is currently searching for Nygaard-Andersen’s permanent successor.

Nygaard-Andersen’s exit came alongside mounting pressure over her mergers and acquisitions strategy. Entain acquired Polish sportsbook operator STS Holding in August 2023, before also finalising its purchase of Angstrom Sports in October. While those two deals were outlined as beneficial by Nygaard-Andersen, she had left the company before the full potential of the moves could be reached.

Activist hedge fund Corvex Management, which acquired a 4.4% stake in Entain in December, described Nygaard-Andersen’s departure as a “necessary” first step. However, Corvex also called for further changes following an “unacceptable” recent performance by the group.

Entain reports hefty 2023 loss

With the HMRC and CPS settlement factored in, Entain reported a net loss of £936.5m for 2023. This is despite an 11.1% rise in net gaming revenue (NGR).

NGR for 2023 climbed to £4.8bn, while group revenue also rose 11% to £4.8bn. Entain noted that revenue was higher across all core business segments.

However, higher spending more than offset the revenue growth, leaving the group with a net loss for 2023. Other expenses affecting Entain over the year included increased impairment costs, amortisation of acquired intangible assets and restructuring spending. Combined, these expenses pushed Entain to a net loss of close to £1bn.

Despite the loss, chairman Barry Gibson remained upbeat about Entain’s long-term prospects. Gibson explained 2023 was a year of “necessary, but ultimately positive, transition” for the company.