Yahoo Finance Ladbrokes owner warns of £40m hit from gambling safety crackdown
Ladbrokes owner Entain has warned of a potential £40m hit to profits amid the Government’s crackdown on gambling.
The business said on Thursday that it expects a blow to sales in 2024 as it comes up against a raft of new rules designed to boost safety in the gambling sector.
Entain’s warning comes as ministers attempt to respond to the surge in online betting, which has sparked concerns over potential harm to consumers.
Shares in Entain fell by more than 6pc in early trading.
It emerged last month that the Government was preparing to introduce a £5 stake limit for adults betting online. This will then fall to £2 for people aged between 18 and 25.
Entain has already sought to get ahead of gambling laws by introducing affordability checks and online caps, although it said new legislation could cause short-term financial pain.
In an update to investors, Entain said: “While we expect these changes to be a positive for Entain in the long run, we may see continued player disruption over the short term, and with leading brands we may see opportunities for us to invest in marketing to grow market share.”
The company’s online gambling revenues fell by 6pc in 2023, which interim chief executive Stella David blamed on the “imposition of cumulative safer gambling measures”.
She said: “In the short term we expect that the measures currently in place will continue to weigh on performance.”
Entain also said the introduction of tighter deposit limits in the Netherlands could hurt profitability.
It comes after a difficult 2023 for Entain, during which it agreed to pay a penalty of £585m linked to a bribery scandal in its Turkish business – which has since been sold.
The came in the form of a deferred prosecution agreement (DPA), which was one of the largest corporate criminal settlements ever reached in the UK.
Shortly after the penalty was announced, its chief executive Jette Nygaard-Andersen stepped down after three years in the role.
This followed pressure from activist investors unhappy with the company’s share price performance.
According to the Financial Times, Ms Nygaard-Andersen, who took home £1.9m in 2022, was nicknamed “Private Jette” by some staff because of her use of private jets.
A source close to the business previously told The Telegraph that she had taken seven private jet flights over the course of three years.
In November, Entain kicked off a drive to slash £100m of costs from the business, as it warned of job cuts.
Since taking over in December, Ms David has been battling to shore up support from investors after Entain’s share price has fallen by 41pc over the past year.
Entain’s net gaming revenues rose by 11pc to £4.8bn in 2023, the company said on Thursday, with net losses of £879m.
Ms David said: “2023 presented a number of challenges for the group, both industry-wide and Entain-specific. I am extremely proud of how our people around the world came together to navigate the business through an eventful and at times difficult year.”
