Ladbrokes owner Entain beats first-half profit view as World Cup offsets UK tax blow (updated)
UPDATE 2-Ladbrokes owner Entain beats first-half profit view as World Cup offsets UK tax blow Adds shares in paragraph 5, CEO comments in 3 & 8, details and background throughout
By Yamini Kalia
Aug 13 (Reuters) - Ladbrokes owner Entain ENT.L beat first-half profit expectations on Thursday as group-wide cost cuts and a surge in player engagement during the men's Soccer World Cup helped the bookmaker absorb the impact of higher British gambling taxes.
The scale of Entain's revenue stream across the U.S. and Britain helped it mitigate the impact of the taxes, which have put pressure on smaller rivals such as Evoke EVOK.L, while the sporting spectacle also lifted consumer spending and morale.
CEO Stella David told Reuters that "massive engagement" from the World Cup has spilled over into Entain's current quarter, with first-time bettors doubling from the 2022 version.
Group net gaming revenue rose 5% on a constant currency basis in the first half, with online net gaming revenue up 7% and retail up 1% on the same basis.
Entain shares were up marginally at 0830 GMT, having risen as much as 3% earlier.
BETMGM STRATEGY
Entain operates BetMGM in the U.S. along with MGM Resorts MGM.N, and that business has been a highly lucrative one for the British group.
Analysts believe BetMGM could be a good independent asset for Entain, thanks to its strong U.S. market position and standalone technology infrastructure.
Entain's David, who has been vocal about being open to a change in ownership structure for the business, said the company has been separating BetMGM's technology and infrastructure from MGM Resorts so that Entain could run the business independently if needed, though there is no plan for a transaction yet.
Entain's first-half underlying core profit fell 2% to £479 million ($645.6 million), but still topped company-compiled estimates of £455 million.
It began a phased exit from its Central and Eastern European business in late June, with plans to also cut 500 jobs, as it reduces its cost and debt burden, which stood at £3.6 billion at the end of June.
($1 = 0.7420 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Mrigank Dhaniwala and Jan Harvey)