Entain Considers Sale of Overseas Operations to Mitigate 40M-Pound Regulatory Blow

Leading British gaming corporation Entain has commenced a process to sell some of its overseas operations. According to The Financial Times, the 7BALL company has reportedly engaged a team of advisors to oversee the possible sale of the brands BetCity in the Netherlands, Ladbrokes in Australia, Enlabs in Sweden and CrystalBet in Georgia.

Regulatory Changes Drive Sale Considerations:

As reported, Entain’s decision to sell BetCity, the Netherland-based gambling operator acquired by Entain in 2023,  has been driven by last year’s proposal of the Dutch lawmakers to enforce tighter limits for deposits with gambling operators in the jurisdiction. The proposal reportedly referring to the second quarter of 2024 could be effective as of 1 April 2024. As reported by Financial Times, Entain said earlier in March 2023 that the measure would affect the company’s annual revenue and profit.

According to the news agency, Entain performs a strategic review of other overseas companies from the list, i.e., Ladbrokes in Australia, Sweden-based Enlabs and Georgia-based CrystalBet. As reported, these brands are not integrated into the parent’s main online gaming platform and their impact on the overall financial standing in currently considered by the company.

Overseas Operations Under Review:

Reportedly, Entain has hired Moelis, the Wall Street advisory company, to help the company’s board and experts determine the way to handle the current circumstances. The Financial Times also reports that the review process includes Entain’s committee for capital allocation, formed to dedicate to considerations of any potential disposal of subsidized operations. Such disposals, Financial Times reports, will currently include only brands that are not integrated into Entain’s technology platform. As reported, such an exclusion from the platform will make these brands easier to sell.

40-Million-Pound Revenue Loss:

Entain’s decision to sell some of its overseas operations reportedly comes after the recent introduction of more stringent gambling regulations in the company’s core UK market, as well as in the Netherlands. As the Financial Times reports, the UK legislature has proposed a 5 pounds ($6.37) stake limit for slot games and the increased gambling affordability checks still in 2024. With the tighter deposit limits proposed in the Netherlands from the second quarter of 2024, the company expects to receive a 40-million-pound blow still this year, according to the Financial Times.

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Therefore the company is now weighing whether the above operators can generate enough revenues to set off the loss caused by the regulatory changes in Entain’s two major jurisdictions. If the review proves different, the 40-million-pound revenue loss is likely to be compensated through the sales process.