Chairman's introduction

Reflecting on the last year, I would best describe 2023 as a period of necessary, but ultimately positive, transition for Entain. We strengthened our revenue base, enhanced our Board, and delivered a satisfactory resolution to our previous regulatory issues.

We’ve made significant strategic progress; lessons have been learned on operational implementation and we draw to a close a period overshadowed by the behaviours of a different era. Entain can now look forward confidently as a global operator with a clear and sustainable strategy, supported by the hard work and commitment of our 31,000 colleagues.

This year the business has:

• Delivered Total Group revenue growth of 14%, including our 50% share of BetMGM.
• Finalised a £585m Deferred Prosecution Agreement (DPA) to conclude the HMRC investigation into activities by the company’s legacy Turkish-facing business, which was sold in 2017.
• Accelerated our exit from unregulated markets, delivering our commitment to only operate in regulated markets.
• Expanded into new regulated markets, in particular Poland and New Zealand, whilst withdrawing from less attractive opportunities.
• Refined our operational strategy to streamline the business, grow revenues and improve margins, as well as invest behind our US business to drive market share gains.
• Refocused our leadership under our Interim Chief Executive, Stella David, and added new expertise to our Board.
• Led by example in our commitment to safer gambling and player protection and won recognition for our positive contribution to corporate social responsibility.

Financial performance

During 2023, we delivered Total Group revenue growth of 14%, with Group Net Gaming Revenue (NGR), excluding our 50% share in BetMGM, growing 11%. However, this was down 2% on a proforma basis reflecting the operational and regulatory challenges the organic business faced. We delivered EBITDA of just over £1bn, despite sacrificing profits as we re-shaped the business to focus on regulated markets. Our balance sheet is robust and while leverage is above levels we would ideally like over the longer term, our balance sheet and available cash is healthy. As a result, we are continuing with our progressive dividend with a payment of approximately £113m for the year.

Deferred Prosecution agreement

December’s Deferred Prosecution Agreement with the Crown Prosecution Service was important in drawing a much needed line under legacy GVC issues. Confronting these challenges was never going to be easy, but we can be proud of the positives - particularly the recognition of Entain’s extensive co-operation, the “wholesale changes” within our business and above all, the acknowledgement that “the company in its current form is effectively a different entity”.

Those welcome comments on Entain and our transformation reflect our commitment to operate only in markets that are regulated or have a clear pathway to regulation. We are proud of that commitment to deliver higher quality and more sustainable revenues in the future despite forgoing around £100 million of EBITDA from those 140 + unregulated markets that we have now exited. In our industry we must embrace regulation, it’s the right thing for our customers and it’s the right thing for our stakeholders. Good regulation, properly implemented and well enforced, is good for our business. It improves visibility and stability of earnings, and means that the most credible, respected and responsible operators can engage with customers. We work constructively with industry bodies and regulators around the globe to ensure that wherever we can we influence the development and implementation of better regulation and its application. We are continuing to cooperate fully with AUSTRAC in relation to their investigation into our Australian business, which commenced in September 2022 and remains ongoing.

Over time the wider benefits of regulation will far outweigh the short-term financial cost of market exits. I’m confident that because of our strategic decisions, we are now firmly on the right road to deliver the enhanced value our shareholders and other stakeholders deserve and expect.