Entain Took a £56m Tax Hit in H1 and Says the Same Tax Is Winning It Share

Entain absorbed a £56 million hit to first-half EBITDA from the UK's higher remote gaming tax and used its results call to argue the increase is working in its favour.

"The tax obviously steps up in the second half of the year, and that has created a huge amount of disruption in the UK market, which we have been taking advantage of," CFO Michael Snape said. "We are gaining market share. We are growing really nicely."

Remote Gaming Duty went from 21% to 40% on April 1, so only three months of it sit in the first half. UK online net gaming revenue rose 13%, with gaming up 13% and sports up 11%, and the retail estate recorded an eighth consecutive quarter of outperformance. Australia online NGR also grew 13%, Spain 28%, New Zealand 21% and Canada 11%, while Brazil fell 25% on unfavourable sports margins.

Group numbers were weaker. NGR rose 5% at constant currency but underlying EBITDA fell 2% to £479 million, with the stronger revenue more than offset by the tax. Entain posted a loss after tax of £11.4 million, a £74 million improvement on last year, and adjusted diluted EPS down 19% to 20.3 pence. Net debt stood at £3.6 billion with leverage of 3.1x. The interim dividend rose 5% to 10.3 pence.

Management did not lift full-year guidance despite beating expectations, citing the full six months of higher tax in H2, planned marketing spend and market uncertainty. It kept the range at 5% to 7% online NGR growth and £910 million to £960 million in group EBITDA. "You cannot predict what that competitive environment looks like in the second half of the year," Snape said.

Entain is targeting £100 million in net annualised run-rate savings by the end of 2027 to offset at least half the tax impact, having already cut 500 roles. Snape called it "capital reallocation" rather than defensive cost-cutting, and said marketing spend will rise this year. The UK and Ireland account for more than 45% of group revenue.

The read across the rest of the sector is harsher, with the industry reporting 540 betting shop closures since the Budget. Consolidation is under way too: evoke shareholders have approved a takeover by Bally's Intralot.