Betting giant Entain set for online slowdown after pandemic boom

The owner of Ladbrokes and Coral is expected to report a slowdown in online growth as the end of lockdown punctures the at-home gambling boom which has boosted profits in the last two years.

Entain, the online and high street gambling firm, will release its trading statement on Thursday April 7 with results from the past quarter.

Last month, it reported double-digit online growth in 2021 for the ninth consecutive year as it profited from bored people locked down during the pandemic.

Expansion in the US further strengthened its position after the relaxation of gambling rules in 2018 ended an era of sports betting prohibition across the country.

But two failed takeover bids in 2021 from US firms MGM and DraftKings could leave investors wondering what the future holds for the gambling giant.

The end of UK lockdowns will see punters returning to high street betting shops, although investors will be keen to see profitable online demand remaining high.

Matt Britzman, equity analyst at Hargreaves Lansdown, said: “Growth has been nothing shy of exceptional, as expansion in the growing US markets brings the business ever closer to profitability.

“For investors, that growth needs to continue, or the higher-than-average valuation could come under pressure.”

The return of a busy sporting calendar this spring offers big opportunities for punters to cash in on bets, with the Grand National, Cheltenham Festival and Formula 1 all likely to help profits for Entain.

Last year, Entain said more than 150,000 customers visited its websites every minute during the Grand National horse race.

Investors will also be hoping the company lays out a robust set to predictions for the rest of the year as the spectre of UK gambling reform once again looms.

Russ Mould, investment director at AJ Bell, warned: “Some shareholders may now be fretting about the outcome of the Government’s review of the 2005 Gambling Act here in the UK, which represents just over one-third of the total group’s business.”

He said much tighter regulation and checking of gamblers’ affordability, losses and maximum stakes could make it much harder for punters to strike a wager in their usual way.

But supporters say the intent is to protect vulnerable people and problem gamblers despite Entain introducing its own range of checks last year.

Analysts at Investec expect Entain to be better protected against regulatory risks than most other companies.