Gambling giant Entain gives revenue warning as stricter regulations continue to bite

Shares in Entain fell on Monday after the gambling industry giant warned that revenue performance had been "softer than anticipated" since the start of July.

The owner of Ladbrokes and Coral blamed adverse sports results in September along with the impact of stricter regulation lasting "longer than expected".

Entain said in a trading update that online net gaming revenue (NGR) had been "mixed across the group, but in aggregate, softer than anticipated".

In the third quarter NGR growth was now expected to be up "high single-digit per cent", but down "high single-digit percent" on a proforma basis.

Entain had been proactive in anticipating the proposals contained in the government's gambling review white paper published in April, including the introduction of affordability checks.

However, the company said the implementation of safer gambling measures and "ongoing regulatory headwinds" had persisted longer than expected, "particularly in the UK".

Aside from sports results, Entain said it had also experienced slower growth than expected in Australia and Italy.

Entain did say that its retail division had produced a "robust" performance, while its US joint venture BetMGM was continuing to perform well.

The company reiterated its guidance that full-year earnings were expected to be in the range of £1 billion to £1.05bn.

Entain chief executive Jette Nygaard-Andersen

Chief executive Jette Nygaard-Andersen said: "We continue to see good underlying growth in our online business and are reiterating our ebitda [earnings before interest, taxation, depreciation and amortisation] for the year despite softer than expected revenue growth in the third quarter and the ongoing roll-out of industry-leading safer gambling measures.

"We continue to attract more customers than ever before to enjoy our products and services."

She added: "We have made significant changes to the group over the last three years. Our focus now is on accelerating the actions we are taking to drive sustainable organic growth, expand our margins, capitalise on the US opportunity and deliver long-term returns for our shareholders. We remain confident in our ability to deliver on the vast opportunities ahead of us, and look forward to sharing more detail about the changes that we are making alongside our third quarter trading update in November."

David Brohan, gaming and leisure analyst at stockbrokers Goodbody, said the update from Entain was "mixed", adding: "Online trends in several key markets are disappointing, although we take some encouragement from its US commentary."

Entain's share price was down more than 13 per cent to close at 918p at close on Monday, while shares in Flutter Entertainment fell by three per cent and 888 by more than six per cent on the back of the news.

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