Entain reported a robust first half of 2026, achieving a 5% year-on-year increase in net gaming revenue (NGR) to €3.0 billion. This growth was fueled by strong performance in its online sector and steady results from retail operations. However, profitability faced challenges due to rising gambling taxes and regulatory expenses, which constrained earnings despite the positive revenue trends.
The growth in NGR surpassed management expectations, bolstered by a 7% rise in online revenue on a constant-currency basis and a 1% increase in retail revenue. The group saw particularly strong performances in the UK & Ireland, Australia, and Canada, where higher player engagement and ongoing product improvements led to increased customer activity. In continental Europe, Spain stood out as Entain's fastest-growing online market, with a remarkable 28% growth in constant-currency NGR.
Much of the growth was attributed to enhancements made to the product lineup ahead of the 2026 FIFA World Cup, particularly improvements to both the sportsbook and mobile platforms. In the UK and Ireland, strong double-digit growth in both sports betting and gaming highlighted effective execution in key regulated markets. CEO Stella David emphasized that these results reflect the strength of Entain's operational model and the advantages of sustained investments in technology and product development.
Despite the positive revenue growth, profitability was pressured by new gambling tax laws that took effect. Underlying EBITDA fell by 2% to €560.7 million, largely due to increased gambling duties resulting from the new remote gambling duty framework implemented in April across the UK and other regulated markets. Entain's effective tax rate rose significantly to 34.4%, compared to 30.3% the previous year, leading to more than doubling of total tax payments to €108.9 million, which negatively impacted operating profits despite heightened revenues.
Underlying operating profit saw a 10% decline to €372.1 million, while gross margin dipped to 60%. The company also maintained a robust marketing spend during the World Cup, investing €18.7 million to seize opportunities from increased customer interactions. Separate disclosed items amounted to €218.8 million, which included €112.5 million set aside for ongoing legal matters related to player claims in Germany.
In a noteworthy development, Brazil's performance was disappointing, with constant-currency NGR dropping 25% amid a highly competitive environment and unfavorable sportsbook margins in the first quarter. Customer engagement did show improvement, with total sports wagers rising by 10%. Moving forward, Entain plans to focus on profitability rather than market share in Brazil, emphasizing a disciplined approach to customer acquisition and positioning Sportingbet as a core aspect of its operation there.
Additionally, Entain made strides in its strategic exit from Central and Eastern Europe, agreeing to sell a 20% stake in Entain CEE to EMMA Capital for €425 million, which values the regional business at about €2.1 billion. In the first half of the year, the entity reported €314.7 million in NGR and €111.2 million in underlying EBITDA. The completion of this transaction is expected in the fourth quarter of 2026, with management indicating that proceeds from a full sale would significantly decrease group leverage, bringing it below three times EBITDA before factoring in potential capital returns to shareholders.
Despite rising regulatory costs, Entain confirmed its full-year projections, anticipating online NGR growth of 5% to 7% and underlying EBITDA between €1.06 billion and €1.12 billion for 2026. The company also reiterated its long-term goal of generating €585 million in annual adjusted cash flow by 2028, indicating strong confidence in its ability to sustain operational enhancements and disciplined investment strategies to promote long-term growth.
