Entain hopes to ride out cost crisis as hard-up punters stay at home more
The Ladbrokes and Coral owner said it expects customers to cut back on their spending in bars and restaurants and have a flutter instead.
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.The finance boss of Ladbrokes and Coral owner Entain has said the group may be one of the “lucky ones” amid the cost-of-living crisis thanks to punters choosing to stay home more to save cash.
Rob Wood, chief financial officer and deputy chief executive of Entain, told the PA news agency it is hoping to weather the crisis as customers cut back on their spending in bars and restaurants and have a flutter instead.
He said while the firm is “not immune,” it has proven to be resilient in times of wider economic woes.
It's low spend and cheap entertainment, and that's why our customers carry on
He said when feeling financially under pressure, consumers “tend to go to pubs, restaurants and cinemas less, which means they are at home more, which means they may be watching the telly” and look to bet on big televised sports events.
The women’s Euro football championship saw it take five times more bets than the tournament in previous years, he added, with around two million bets placed in a sign that demand has so far not easing off for sports betting.
“It’s low spend and cheap entertainment, and that’s why our customers carry on,” he added, pointing out that the average size of a bet in the UK is around £7.
The group’s half-year results showed that online gaming revenues fell in an early sign that customers are beginning to cut their spend in the face of soaring cost pressures.
It also dropped as the group comes up against strong comparisons from a year earlier, when Covid restrictions provided a boost to online gambling.
Entain said it hopes for growth in online gaming revenues over the second half, though it last month cut its full-year online gaming revenue outlook, predicting flat growth having previously guided for mid to high single figures range.
The group said: “The current economic pressures, increasing rates of inflation and increasing energy costs are a cause for concern for many consumers.
“Whilst the group considers itself as relatively resilient to the impacts of economic pressures, it is not immune.
“The directors continue to be vigilant of the economic backdrop.”
The firm – which also owns bwin and partypoker online brands – posted a 17% hike in underlying pre-tax earnings to £471 million for the six months to June 30 as revenues lifted 19% to £2.1 billion, helping shares rise 6% in the FTSE 100 Index.
It unveiled a deal alongside the results to drive growth in central and eastern Europe markets through a joint venture with Czech Republic-based investment firm EMMA Capital and snap up Croatia’s SuperSport Group.
Entain will pay 600 million euros (£506 million) in cash upfront to EMMA for a 75% economic stake in SuperSport, with the new joint venture to be called Entain CEE.
It comes as part of aims to tap further into the central and eastern Europe gambling market, which is estimated to be worth around £5 billion.
Half-year figures for Entain showed retail net gaming revenues jumped by a better-than-expected 244% year-on-year as punters returned to bookies now that Covid restrictions have lifted, which helped offset the fall in online gaming revenues.