ii view: Ladbrokes owner Entain eyes massive US profit
A joint venture with MGM in the USA could be hugely lucrative over the coming years. Buy, sell, or hold?
8th July 2025 15:37
by Keith Bowman from interactive investor
Raising full-year estimates for US business BetMGM
- Now expects full-year (FY) BetMGM revenues of $2.6 billion, up from a previous $2.4 billion
- Now expects FY BetMGM adjusted profit (EBITDA) of $100 million, up from a previous forecast of ‘positive’
- BetMGM targeting $500 million of adjusted profit (EBITDA) over the coming years
ii round-up:
Sports betting and gaming company Entain (LSE:ENT) operates both online and via the High Street.
Entain’s sporting related betting brands include Ladbrokes, Coral, bwin and Sportingbet. Gaming related brands take in CasinoClub, Foxy Bingo, Gala and PartyCasino.
The FTSE 100 company also operates in the USA via a 50/50 joint venture with MGM Resorts International (NYSE:MGM) and under the brand BetMGM brand, as well as in more than 30 other markets across the world.
For a round-up this latest trading update announced on 16 June, please click here.
ii view:
Formerly GVC Holdings, Entain today employs over 30,000 people. It provides the technology and capabilities which power its joint venture BetMGM business as well as exclusive games and products. BetMGM has exclusive access to all of MGM Resorts' US land-based and online sports betting, major tournament poker, and online gaming businesses.
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For investors, adverse sporting results hindering profit margins can impact, while 2024’s football Euros potentially provide tough comparatives this year. Intense competition at its joint venture BetMGM business includes rivals such as DraftKings Inc Ordinary Shares - Class A (NASDAQ:DKNG) and Flutter Entertainment (LSE:FLTR) business FanDuel. Problem gambling for some customers and a potential tightening of government regulations cannot be forgotten, while a share price-to-net asset value ratio above the three-year average may suggest the shares are not obviously cheap.
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More favourably, profit progress at its part owned BetMGM business is being made. Geographical diversity includes exposure to the UK and Ireland, parts of Europe, Australia, Brazil, Canada and the USA via BetMGM. Cost savings of £100 million continue to be targeted out to 2026, while a forecast dividend of around 2.2% compares to no payout at major rival Flutter.
For now, and despite ongoing risk, a consensus analyst fair value estimate close to £10 per share is likely to generate optimism around this highly experienced and increasingly international betting brand.
Positives:
- Diversity of business type and geographical locations
- Paying a dividend (not guaranteed)
Negatives:
- Uncertain consumer outlook
- Potential for increased regulation
The average rating of stock market analysts:
Buy
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