Entain, once seen as a forward-looking company in Central and Eastern Europe, is significantly altering its strategy. The gaming giant acquired a 75% stake in Croatia's SuperSport for approximately €690 million in 2022 and bought Poland's leading sports-betting company, STS, for £750 million just the following year. These acquisitions were incorporated into a joint venture with Czech firm EMMA Capital, dubbed Entain CEE, with Mikolaj Cymerman, the head of corporate development, describing it as a haven for regional brands.
However, the ambitious plans for regional expansion have now been put on hold. On June 25, Entain agreed to sell a 20% stake in Entain CEE back to EMMA Capital for roughly €425 million. This deal marks the initial step toward a complete exit from the venture, and Entain has not provided comments regarding this transaction.
The decision to divest is particularly striking given the performance of Entain CEE. In 2025, the unit reported £522 million in net gaming revenue, reflecting a 7% increase year-on-year, while earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by the same percentage to £183.7 million. Both STS and SuperSport have maintained their top positions within their markets throughout.
According to Reuters, which reported on this development on June 18, Entain has faced mounting pressure to reduce expenditures following substantial tax increases in the UK that came into effect in April 2023. The remote gaming duty rose from 21% to 40%, and the sports betting duty increased from 15% to 25%. Since this tax rise was announced, Entain's shares have plummeted by around 30%, bringing its effective tax rate on UK profits above 80%.
Analyst Andrew Tam from Rothschild & Co Redburn estimated the implied enterprise value of the CEE sale at £1.83 billion, equating to a multiple of 9.3 times EBITDA, indicating Italy might be the next target for disposal. He suggested that streamlining the balance sheet would enable investors to better assess the value of BetMGM, which he described as the primary asset in the group.
The existing put-and-call arrangements with EMMA and the Juroszek family facilitated this initial transaction. Following the sale, Entain's stake in Entain CEE will decrease from 67.5% to 47.5%, while EMMA's stake will increase to 42.5%, with the Juroszeks maintaining their 10% without voting rights, which will shift to EMMA, granting it effective control. Completion of this deal is anticipated in Q4 of 2026. CEO Stella David characterized the agreement as a "decisive first step" toward a full exit from Entain CEE, while reinforcing the company's commitment to disciplined capital allocation. The proceeds from this transaction will be used to reduce debt, resulting in an estimated savings of £20 million annually in interest payments.
The decision to sell these assets does not signify a declining business. Marek Plota, a gambling attorney based in Wrocław, described Poland as a "paradoxical market." He observed that the licensing model for sports betting has been effective despite a challenging tax environment, noting strong growth since reforms were enacted in 2017. Local operators have developed highly competitive products, with channelization in betting reported at around 78%, which is solid by European standards. However, the online casino sector faces limitations, with channelization significantly lower at approximately 61% due to the restrictions of the current monopoly model in Poland. Despite these constraints, the state operator Totalizator Sportowy has rapidly gained market share.
Concerning taxes, Plota highlighted the significant burden of a 12% betting tax on stakes, which has not changed since the Gambling Act of 2009. This taxation structure significantly affects business economics, compressing profit margins and limiting pricing flexibility, compelling licensed operators to innovate in marketing and product development. Interestingly, he believes that this demanding environment has propelled local betting products to strength, allowing incumbents like STS and Fortuna to thrive while deterring many international operators.
Looking ahead, Plota anticipates that the Polish market, given its size and dynamism, will attract attention from larger groups in the long run, although a quick liberalization of the tax regime may not be forthcoming. Entain's own financials indicate a more complex situation than mere headline growth. CFO Rob Wood noted that Poland's gaming revenue generation faced challenges due to intensified promotional competition, particularly admitting some market share losses against aggressive rivals.
The initial optimism surrounding STS was heavily dependent on the assumption that Poland would soon permit online casino operations for private entities. However, significant legal restrictions remain. This limitation affects the synergies Entain can achieve compared to other European markets. While the Polish betting market continues to perform well, its prospects for expansion are hampered by the absence of a regulated online casino sector.
On the topic of possible political changes, both legal experts express caution. The current political situation is unpredictable, and any favorable modification to online casino regulations might not occur swiftly. Plota noted that potential reforms would likely stem from evidence of declining tax revenues and regulatory oversights rather than simply a desire for progress. The next elections in Poland are scheduled for autumn 2027.
Entain's decision to offload what appears to be a successful venture can be viewed within the context of its broader corporate strategy. Historically, the company has faced challenges integrating its various European acquisitions, contributing to underwhelming fiscal performances in recent years. As of Q1 2025, Stella David emphasized a flexible approach to the company's portfolio management, indicating that nothing was off-limits — a sentiment that now seems particularly relevant as they pivot away from Poland and Croatia.
The sale of their CEE interests illustrates two important points. First, even profitable businesses are not immune to pressures that compel firms to make difficult financial decisions in the face of soaring tax rates. Additionally, regulatory frameworks can have dual effects; while Poland’s tax policies have fostered a competitive local market, they have also bottlenecked potential growth in online casino operations, ultimately affecting Entain's valuation of its acquisition.
As Entain seeks to manage these challenges, stakeholders will be eager to see if the firm can maintain its position as a frontrunner in the industry despite the loss of a significant performer in its portfolio.
