Dear Shareholder,
Entain is a leading sports betting and gaming business, operating in a global industry with attractive dynamics and structural growth. We are the most diversified leader of scale in our sector, only operating in regulated or regulating markets. Our strong brands, leading market positions and increasingly localised offering are supported by inhouse product and technology capabilities.
The Group’s strategy is focused on delivering the most entertaining customer experience supported by market leading player protection to deliver quality growth and sustainable returns for our shareholders.
While 2023 presented many challenges and our performance in some of our markets was behind our expectations, overall we made good strategic progress. We reshaped our geographic footprint enabling us to focus on leadership positions in regulated or regulating markets, broadened our customer engagement and continued to implement leading player safety measures. We also secured a conclusion to a material overhanging legacy issue.
Reflecting the significant progress made in re-focusing our business, in November 2023 we revised our strategic ambitions, focusing on key objectives and priorities for the next three years that will drive shareholder value.
One of these changes has been leadership. I have been on Entain’s board as Senior Independent Director since March 2021 and was honoured to accept the role of Interim CEO. Although my appointment is on an interim basis, the business will not be treading water. We have clear targets to deliver. I will focus on driving the execution of our revised strategic priorities until the appointment of a new, permanent, CEO.
Aligned with our strategy, 2023 saw delivery of growth coupled with sustainability, ensuring more diversified, sustainable and ultimately higher quality earnings.”
Performance in 2023
During 2023, we achieved total revenue growth of 14%, including our 50% share in BetMGM, in spite of operational and regulatory challenges. We expanded into the regulated markets of Croatia, Poland and New Zealand as well as adding to our capabilities with the acquisitions of 365Scores and Angstrom.
Entain’s operations now span over 30 regulated or regulating territories, with established brands supporting leading positions in many of our markets. Regulation remains an over-arching factor in our industry and for the Group’s performance. Clear regulatory frameworks that are appropriate and well enforced, are positive for us and our customers. However, in the short term, they can create headwinds as significant changes are put in place and uneven implementation can occur ahead of consistent enforcement.
During 2023, we managed regulatory change in a number of our larger markets, impacting headline organic performance. The most notable being our implementation of ever-tightening UK affordability measures and the persistent lack of impactful regulatory oversight in Germany. We estimate the aggregate of regulatory impacts was a negative 6ppt headwind to Online NGR performance in 2023. As a result, proforma3 organic Online NGR was down 3%cc2 versus the prior year, whilst proforma3 Retail NGR grew 2%cc2. Total Group NGR, including our 50% share of BetMGM was up 14% and up 2%cc2 on a proforma3 basis.
Notes:
1. Awarded; EGR North America Socially Responsible Operator 2023, SBC Global and SBC LATAM Socially Responsible Operator of the Year, and Vixio Global Regulatory Award for Outstanding Contribution to Safer Gambling.
2. Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2023 exchange rates.
3. Proforma references include all 2022 and 2023 acquisitions as if they had been part of the Group since 1 January 2022.
