'We have a good relationship with Arc' says Entain as Euros help boost half-year results

The owner of Ladbrokes and Coral will not be following the example of gambling industry rival Flutter Entertainment, which is in dispute with major racecourse group Arena Racing Company (Arc).

Entain chief financial officer and deputy chief executive Rob Wood said the company had a good relationship with Arc having signed a long-term horse and greyhound racing contract with them in 2021.

Wood was speaking as Entain released its results for the first half of 2024 on Thursday morning, in which improved performance helped by a boost from this summer's European Football Championship meant the company could upgrade its guidance for the full year.

In recent weeks Flutter brands Sky Bet and Paddy Power have not been offering prices on selected Arc meetings, only betting on the races in the minutes before the off. Flutter wants Arc to return to the negotiating table over the media rights contract between the two sides, arguing that racing has become unprofitable.

In 2021 Entain and Arc announced a long-term media rights deal that covered horseracing media rights and established a joint venture for greyhound racing, which runs to the end of 2029.

Wood told the Racing Post: "For us we have a steadier picture because we have a good relationship with Arc and we entered into long-term deals with them to operate as partners through the decade. So we have stability in there and it's a sharing model. We are fully aligned in terms of wanting to drive the product. We are happy with where things are." 

As for Entain's performance in 2024, Wood said he was happy to be reporting good numbers, adding: "We are ahead of expectations."

Entain's net gaming revenue rose by six per cent to £2.56 billion for the first six months of the year, while underlying core earnings were up by five per cent to £524 million.

The company, which last month announced it had appointed a new chief executive in Gavin Isaacs, said its first half performance was delivered by "focused execution driving improving underlying growth across our business, as well as benefiting from stronger than expected margins in the Uefa Euros tournament".

Gavin Isaacs: new chief executive at Entain

Wood said Entain was pleased with the number of active players and player engagement during the tournament, while results had largely gone its way. He said: "The third quarter was less good because the semi-finals and final were all negative for us but in the second quarter we had so many draws in the group stages so we did have favourable results."

Net gaming revenue in Entain's largest division, the UK and Ireland, was down six per cent overall and eight per cent in online, reflecting "regulatory headwinds".

Wood said: "We did make changes particularly in the second half of last year to reflect where we were with the Gambling Commission and we don't cycle through those changes until we exit this year.

"However, when you look at sequential performance we are growing, which is great. Our first half of this year was up on the second half of last year and our recreational players are growing, our active players are growing."

The company's US joint venture BetMGM delivered "accelerating performance" with sequential quarterly revenue growth, with net gaming revenue for the second quarter up nine per cent year-on-year and four per cent up on the first quarter.

Entain said its better than expected performance in the second quarter had driven its upgraded guidance, with online net gaming revenue growth for the year forecast to be "low single digit positive", and with the group delivering core earnings in the range of £1.04bn to £1.09bn.

Interim chief executive Stella David said: ”Entain’s first half results are clear evidence that our hard work improving the group’s operational performance is bearing fruit. Whilst there is more work to do, we are pleased with the progress so far and look forward to building further on these solid foundations in the second half and beyond."

The results received a favourable reception from the City, with Entain's share price closing more than five per cent up at 550.00p on Thursday.

David Brohan, gaming and leisure analyst at stockbrokers Goodbody, said: "Overall, this is a positive update from Entain, with the group delivering a welcome beat versus expectations."

Read these next:

Entain appoints Gavin Isaacs as new chief executive following seven-month search 

Ladbrokes owner Entain reports fall in online revenues as regulatory challenges continue to bite 

Entain chairman Barry Gibson to step down in September as search for new chief executive continues 

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