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FTSE 100: Ladbrokes owner Entain eyes World Cup betting boost

Entain  A pedestrian walks past a branch of Ladbrokes in London, Britain December 22, 2017. REUTERS/Simon Dawson
Entain is the parent firm of betting firms Ladbrokes and Coral. Photo: Simon Dawson/Reuters (Simon Dawson / reuters)

Betting giant Entain (ENT.L) expects fourth-quarter online gaming revenue to improve on the prospect of the Qatar World Cup, which begins in November.

The Ladbrokes and Coral owner posted a 2% rise in revenue for the three months to the end of September, while online revenue were 1% higher.

Meanwhile, it recorded a “strong trading performance” in its betting stores, which recorded a 10% rise in net gaming revenues for the quarter as they continued their recovery following pandemic restrictions.

Gambling firms, which are seeing more punters returning to retail shops, are now facing challenges from a cost of living crisis as customers seek to cut spending wherever they can.

Entain said it expects further growth in the current quarter as it looks set to benefit from the football World Cup in Qatar, which starts next month, and the planned return to operations in the Netherlands.

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Jette Nygaard-Andersen, Entain’s chief executive officer, said: “We have healthy momentum across the business and look forward to a strong finish to the year which includes the World Cup.

“Looking ahead, we remain vigilant of the economic backdrop.

“However, our diversified revenue base and robust business model enable us to remain confident in our ability to deliver on our growth and sustainability strategy.”

The firm also reported “strong” growth at its US BetMGM business, which has seen a roughly 90% year-on-year revenue jump on the back of a “successful start to the NFL season”.

Entain said group earnings for the year are expected to meet previous guidance of between £925m ($1027m) and £975m.

“For all the progress, Entain has been unable to shake off the shackles of some factors working against it. The most pressing concern is inevitably the consumer’s propensity to spend, given the wider economic picture, and whether the cost of living crisis will simply evaporate some of the revenues which may otherwise have come Entain’s way. In addition, the spectre of regulation is a constant threat, with problem gambling being an easy political target in any of the jurisdictions in which the group operates,” Richard Hunter, head of markets at Interactive Investor, said.

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“Two rebuffed acquisition attempts has also taken some of the wind from the sails of the company, with the result that Entain shares have declined by 47% over the last year, as compared to a dip of 4.4% for the wider FTSE100. Even so, over the last three years the shares remain ahead by 35% and, with a clear strategic runway full of growth opportunities, the market consensus of the shares as a strong buy reflects real optimism in the group’s prospects,” he added.

Watch: Watch out for 'terrifying' poster with rules that World Cup visitors must follow in Qatar