Ladbrokes owner to post lower margins amid regulatory headwinds

The gambling giant behind Ladbrokes and Coral has said it expects profit margins to be lower this year in the face of regulatory headwinds.

Entain, which also owns Bwin, saw shares slide on Thursday after it told shareholders that core profit margins are set to dip to 26% in 2023.

The margins, which will nevertheless remain above pre-pandemic levels, come as the firm faces higher costs for wages, energy and the impact of strengthened regulations.

Rob Wood, chief financial officer of the firm, told the PA news agency that tougher online safety rules for gamblers in the UK hit the business last year.

“We saw an online revenue decline of 2% last year,” he said.

“There was partly an impact from the return of shops after Covid but about five percentage points was from the regulations in the UK and Netherlands.

“We would have seen 3% growth without it.”

Tightened affordability checks were introduced last year after pressure from the UK’s Gambling Commission.

Entain is also among gambling firms awaiting the publication of the Government’s delayed white paper on the sector.

The company said it has “been in conversation with Government” to prepare for the paper.

It came as Entain revealed that total net gaming revenue increased by 12% to £4.35 billion in 2022, compared with the previous year.

This was largely driven by betting shops, with net gaming revenue across the firm’s UK retail operation increasing by 56%.

It said this was driven by sharp jumps in sports wagers, supported by the winter World Cup, and gaming trade.

Jette Nygaard-Andersen, chief executive officer of Entain, said: “We made excellent financial, operational and strategic progress during 2022, and took significant strides towards our goal of being the global leader in betting, gaming and interactive entertainment.

“I am particularly proud that Entain leads our industry on responsible gaming and we are now the only global operator exclusively in domestically regulated or regulating markets.”