Ladbrokes owner Entain sees cost crunch hit online gambling spend
The betting group is now guiding for flat online net gaming revenues for the full year.
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.Ladbrokes and Coral owner Entain warned that online gaming revenues are set to remain flat this year as it revealed gamblers are cutting their spending in the face of soaring cost pressures.
The betting giant said online gaming revenues fell 7% on a constant currency basis in its first half to June 30, with the decline picking up pace to 8% in the second quarter.
It cut its full-year online gaming revenue outlook, saying the “weaker macroeconomic environment is reducing customers’ rate of spend”.
The group guidance for flat net gaming revenues comes after it predicted in March that annual growth would be in the mid to high single figures range.
Shares fell 6% in Thursday morning trading after the downgrade.
Gambling groups saw a surge in online betting during lockdowns at the height of the pandemic, with Entain enjoying a 12% increase in online net gaming revenues last year.
But the ending of Covid restrictions has sparked a drop-off in online betting, while Entain’s latest update has revealed a further hit as the cost-of-living crisis knocks customer spending.
But Entain said trading in its 4,300 high street bookies was better than it expected, with betting volumes recovering above pre-Covid levels between April and June, driven by gaming and self-service betting terminals.
Overall, group net gaming revenues rose 18% on a constant currency basis in the first half, although growth eased back to 6% in the second quarter.
Chief executive Jette Nygaard-Andersen said: “The macroeconomic outlook is uncertain; however the underlying performance of our business remains strong.
“With an increasingly recreational customer base and relatively resilient revenue, we remain confident that our customer focus, diversification and proven ability to grow both organically and through M&A (mergers and acquisitions) will enable us to deliver further progress against our strategy.”