Entain ceases gaming activities in 140 unregulated marketplaces, foregoing a £100 million revenue stream.
Global betting corporation Entain is planning to exit 140 unregulated gambling territories, giving up substantial earnings in the process. The firm has been hit with substantial fines for breaching gambling regulations on numerous occasions.
Leaked Documents Reveal Exit Strategy
Based on internal Entain files, the Financial Times suggests that the betting corporation has or is set to quit 140 jurisdictions [English article].
The company's restructuring efforts started in November 2020 and were codenamed Project Sunrise. By December 17, 2020, Entain had abandoned 100 markets, with more withdrawals occurring between 2021 and 2023.
Entain estimates that this decision has cost them approximately 100 million GBP (around 116 million EUR) in lost revenue. However, the company's high-up Barry Gibson asserts that "doing what's right" was the right move.
Critics, such as Greg Johnson of Shore Capital, aren't convinced, remarking:
I don't get why leaving markets where you hardly had a presence or shouldn't have been in to begin with is a significant accomplishment. – Greg Johnson, Shore Capital analyst, Financial Times source
However, it's worth noting that Entain is the only major betting company consistently abandoning gray markets, while others continue to generate revenue there.
Which Markets Has Entain Exited?
A comprehensive list of the territories Entain has pulled out of or plans to leave is not public knowledge. According to the Financial Times, Entain is no longer active in Antarctica, Pitcairn Islands, or Vatican City.
These regions might be relevant in the gambling context as service providers may have their base of operations there while offering online gaming.
In larger markets, a decision has yet to be reached. Media sources suggest that Entain has also planned to withdraw from Brazil, Chile, Peru, and Mexico. However, given that Brazil has recently advanced in legalizing gambling, this could imply that Entain will remain active or re-enter some of these markets.
Entain Faces Challenges
Following a leadership shift, Entain's stock initially soared but has since hovered at an even keel.
The exit from unregulated markets seems to result in financial losses but might also help prevent legal disputes and ward off further fines, such as the 585 million GBP recently incurred due to involvement in illicit activities.
The future of Entain's ability to compete and foster growth in legal gambling markets remains uncertain.
Entain's decision to exit unregulated markets also includes resigning from online casinos in Germany, as the company aims to distance itself from jurisdictions with questionable gambling regulations. Despite the financial losses, Entain's withdrawal from these territories, including Germany, could potentially shield them from potential legal disputes and additional fines.
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