Entain PLC (LSE:ENT), the sports betting firm that owns Ladbrokes and Coral, has a strong route to the American betting market with its BetMGM joint venture, but the path to profits is likely to be one of the main issues when it reports results tomorrow.
Having already revealed its headline numbers, investors will be keeping an eye on what's new, including how its plans to make the US sportsbook profitable and how the American market is reacting to the product.
BetMGM said last month that made a loss of US$440mln in 2022, but net gaming revenue and underlying earnings (EBITDA) both rose 12%.
It is this strong growth that has left Entain’s management confident that the US product can become profitable in the second half of 2023.
The FTSE 100-listed group, which also owns Gala Bingo, bwin and Sportingbet, said online revenues fell 2% but were offset by retail gaming revenues increasing by two thirds, as things evened out after the pandemic distorted normal trends.
Full year results are likely to show EBITDA coming in at the lower end of guidance at around £987mln, analysts at UBS reckoned.
Entain’s share price hit an all-time high above £22 in 2021 as it received approaches from DraftKings at £28 per share and BetMGM partner MGM Resorts International (NSX:MGM), at £13.83.
Yet earlier this year, MGM’s chief executive Bill Hornbuckle ruled any more bids for the near future, which sent the shares tumbling to around £13.
Another important aspect for the business will be its approach to the upcoming UK government review of the Gambling Act, with changes expected to help protect customers further and reduce the likelihood of money laundering.