Specialist
Former executive at 888 Holdings plc
Agenda
- Regulatory outlook across mature markets, including the UK, Netherlands and Germany and impact on Entain’s (LON: ENT) gross gaming revenue growth
- US licensing overview and expectations, potential expansion, highlighting competitiveness of BetMGM and strategic outlook
- Central and eastern Europe entry analysis, highlighting regulatory dynamics and expansion potential throughout the region
- Player behaviour and engagement expectations throughout a downturn, highlighting Entain’s exposure to lower-margin players
Questions
1.
What is your outlook for a possible timing on the UK white paper? What do you expect to see in this change to regulation? The UK is a key region for Entain.
2.
How feasible is the single-customer view if it limits loss across operators? What cooperation is required across operators? How challenging might it to be implement this?
3.
The single-customer viewpoint you mentioned obviously limits single customer loss across operators. Is this loss still GBP 125 or is it increased because it’s across operators?
4.
You mentioned the grey market and channelisation efforts. How do you think the reform might impact these? What does it mean for operators’ net gaming revenue? What’s the risk of customers migrating to dark or grey markets?
5.
How might all the white paper’s potential elements impact Entain’s net gaming revenue in the UK?
6.
How exposed do you think Entain is to VIPs vs recreational players? The company had a target of around 90% recreational. Do you think that’s feasible?
7.
How would you assess Entain’s self-imposed measures to date? Is there anything the company has not covered, or anything you think could be improved in preparing for a potential white paper?
8.
Regarding Entain’s recent fine, you mentioned it’s due to historical performance. Would you expect the Gambling Commission to increase fines for any breaches? I think it was around GBP 17m, which seems relatively low compared to the profitability of tier 1 operators.
9.
On the macroeconomic environment, Entain reported some consumer weakness in Q2 2022, but it didn’t seem to be the case across other peers. Why do you think the company might be overexposed to softening demand?
10.
Do you think Entain can effectively gear its customers towards higher-margin products, or are we talking about a brand portfolio issue?
11.
Is there anything else you think we should be discussing around the UK?
12.
To confirm, you don’t think the pure-led initiatives you mentioned would significantly impact gross gaming revenue for tier 1 operators?
13.
Would you expect Entain to still pursue a direct entry into the Dutch market following its June 2022-agreed acquisition of BetCity? If so, do you have a rough timeline?
14.
Are there any other operators in the Dutch market that might present a risk to BetCity or Entain’s brands’ market share, aside from Kindred and Bet365?
15.
Could you share a ballpark figure for the upside when you successfully migrate a brand to a proprietary tech stack?
16.
While out of the Netherlands market, Entain took quite a hit on a monthly basis. Do you think this can be recouped through the announced acquisition of BetCity? I appreciate it’s a crowded market. What’s the opportunity to grow and return to profitability in that market?
17.
What’s your outlook for Germany’s regulation changes? Could you outline the potential impact on Entain?
18.
There’s quite a stark contrast between the two regulatory scenarios for the German market. Is there any indication of where regulation might go or is it a 50/50 chance at the moment?
19.
Regarding overall strategy, do you think Germany is a good decision for Entain? Could the company exit the market if the situation got to a loss-making scenario?
20.
Are there any additional core markets for Entain that we should monitor? My understanding is that there might be some changes to Australian regulation, but I’m not sure how much impact there would be from that.
21.
What is your outlook for regulation in additional states in North America, aside from the ones that are currently live? Could you highlight any key opportunities for Entain?
22.
What is the opportunity for Entain to leverage its JV with BetMGM to gain market share from Flutter?
23.
How would you evaluate BetMGM’s comments suggesting an interest in Entain’s business? Is this a possibility that we should consider?
24.
On other growth prospects, how would you assess Entain’s August 2022-announced acquisition of SuperSport? What are your growth assumptions for the central eastern Europe region?
25.
What additional opportunities do you think there are in central and eastern Europe for Entain to consolidate the footprint? I appreciate you mentioned expansion, but would any other targets in the region make sense?
26.
What are your assumptions around player behaviour throughout a downturn in Europe as a whole? Are we expecting any softness, as reported in Q2 2022?
27.
How should we think about potential churn? Are you expecting anything abnormal?
28.
What are your thoughts on casino products? I appreciate sports betting is obviously supported by a strong calendar, but how might an economic downturn impact the casino customer?
29.
What are your expectations for Entain’s marketing expenditure in 2022, in light of our discussion? Is there anything we should watch out for?
30.
What do you expect to see in terms of consolidation across operators over the next 3-5 years? What role might Entain play? We’ve discussed acquisitions in central and eastern Europe.
