Ladbrokes owner Entain settled jitters among shareholders by announcing the appointment of a new chief executive and issuing a strong trading update. Earlier this week, MGM Holdings announced it would not return with an improved bid after the Entain board rebuffed its £8.1 billion takeover bid.
Chief executive Shay Segev departed abruptly last week, just after the bid was rejected, as he was lured to streaming company DAZN by a highly lucrative offer. Shareholders were growing twitchy, but Entain now appears to have eased concerns by appointing Jette Nygaard-Andersen as its new boss.
Nygaard-Andersen is a Danish national who previously chaired CS:GO heavyweights Astralis, and she has held senior roles at Swedish media firm Modern Times Group. She has been an independent non-executive director at Entain since 2019, so she already knows the business well. “I am very excited to have the opportunity of continuing the extraordinary momentum that Entain has in its existing markets, as well as helping it enter new regulated markets and reach new audiences,” said Nygaard-Andersen.
She will receive a basic salary of £750,000, with potential long-term incentives and deferred bonuses worth up to a maximum of £4.2 million. Long-standing boss Kenneth Alexander received several lucrative bonuses before leaving the business last summer, but Segev only lasted around six months in the role before he was enticed away.
Entain announced on Thursday that year-on-year revenues increased by 7% for the final three months of 2020. That means overall revenues for the calendar year were flat compared to 2019, which is a pretty strong performance after Covid-19 ravaged the sporting calendar and forced it to close many Ladbrokes and Coral betting shops for weeks on end.
The firm, previously known as GVC Holdings, now expects to make between £825 million and £845 million for the year. Revenues from BetMGM, its U.S. joint venture with MGM Holdings, more than doubled in 2020 after it expanded into several new states.
A huge opportunity exists in the U.S., as more than half of all the states have now legalised sports betting in one form or another since the Supreme Court overturned a federal ban in May 2018. Caesars Entertainment mounted a successful takeover bid for its British partner, William Hill, but Entain – which also owns Sportingbet, Bwin and several other brands – appears to have fended off a takeover bid from MGM Holdings.
Entain’s share price increased 27.5% at the start of 2021 after news broke of MGM’s failed bid. The board said it undervalued the group. Its share priced decreased by 16.5% earlier this week after MGM decided against making an improved offer, but it has rallied and increased by 8.5% since delivering the news of Nygaard-Andersen’s appointment and the strong trading update.
The UK Gambling Commission (UKGC) has criticised the country’s leading bookmakers for exaggerating the scale of illicit betting in a report written by PwC. The report, the commissioned Betting and Gaming Council (BGC), claims that 200,000 Brits spend £1.4 billion per year on black market wagering, many of whom are under 18.
The report was designed to push back against the potential for tougher regulations as part of the government’s ongoing review of the Gambling Act 2005. The report warned that a regulatory clampdown on licensed bookmakers would simply drive more people into the arms of “unscrupulous” operators that do not have licences.
However, in a letter to a cross-party group of MPs examining gambling-related harm, UKGC chief executive Neil McArthur said the report was “not consistent with the intelligence picture”. He added: “We know that licensed operators and their trade bodies are concerned about the impact of the illegal market, but our own evidence suggests that the impact may be being exaggerated.”
McArthur said that black market concerns should be kept in proportion, despite “reports from consultants paid for by the industry, and should not distract from the need to continue to drive up standards and make gambling safer in the regulated market”. BGC members include Entain, William Hill, Bet365, Flutter Entertainment – which owns Paddy Power, Betfair and Sky Bet – Betfred, 888, Unibet and many more leading lights within the industry.