Entain, once brimming with ambition in Central and Eastern Europe, made significant investments in the region by acquiring 75% of Croatia's SuperSport for approximately €690 million in 2022 and purchasing STS, Poland's leading sports betting operator, for £750 million in 2023. Both companies were integrated into a joint venture named Entain CEE, alongside Czech firm EMMA Capital, with Mikolaj Cymerman, the corporate development head for the unit, expressing aspirations for growth across a dozen targeted countries.
However, plans have drastically shifted. On June 25, Entain announced an agreement to sell a 20% interest in Entain CEE back to EMMA Capital for about €425 million, marking the initial step in a full withdrawal from the venture. Entain has not provided any comment regarding this development.
Despite its recent performance—Entain CEE reported a net gaming revenue of £522 million for 2025, an increase of 7% year-over-year, with EBITDA also rising 7% to £183.7 million—the decision to exit the region stands in stark contrast to expectations. The two companies, STS and SuperSport, have maintained their leadership positions throughout this period.
According to a report by Reuters on June 18, the recent decision comes as Entain faces financial pressure due to increased tax rates in the UK; these liabilities rose significantly, with remote gaming duty increasing from 21% to 40% and sports betting excise from 15% to 25%, effective April. Following this announcement, Entain's stock has dropped approximately 30%, pushing its effective tax rate on UK earnings above 80%.
Andrew Tam, an analyst at Rothschild & Co Redburn, estimates the implied enterprise value of the CEE sale at £1.83 billion, roughly 9.3 times EBITDA. He has suggested that Italy may be next on the chopping block and that a streamlined balance sheet could allow investors to better assess BetMGM's value, which he terms "the main prize" in Entain's portfolio.
Interestingly, the existing ownership arrangement between EMMA and the Juroszek family facilitated this initial sale—the result being that Entain's stake will decline from 67.5% to 47.5%, while EMMA’s share will grow to 42.5%. The Juroszek family's 10% interest will remain, but their voting rights will transfer to EMMA, granting it effective control after completion, now expected in the fourth quarter of 2026. Chief Executive Officer Stella David characterized this deal as a clear move towards an eventual full exit from Entain CEE and reflected a commitment to disciplined capital allocation. The proceeds from this sale will be used to reduce debt, potentially saving around £20 million annually in interest payments.
This shift does not necessarily indicate declining business performance. Marek Plota, a gambling lawyer from Wrocław, remarked on Poland’s paradoxical market, pointing out that while the tax environment is challenging, the licensing model for sports betting has succeeded since reforms in 2017, enabling local operators to develop competitive offerings. He noted that channelisation in betting is approximately 78%, a solid rate by European standards. However, online casino operations struggle with channelisation rates much lower, around 61%, which illustrates the limitations of the current regulatory model.
Plota candidly addressed the impact of Poland's taxing structure, with a 12% betting tax on stakes that has persisted since the Gambling Act of 2009, altering the economics of the business by compressing margins and reducing pricing flexibility. He suggested this taxing environment has paradoxically led to stronger local products, whilst deterring many global operators from entering the market, where restrictions also inhibit online casino offerings.
Despite this, Plota anticipates that Poland will attract significant operators eventually, including Betano, Bet365, and MGM, urging investors to recognize the market's potential instead of underestimating the effect of current taxes and restrictions. He acknowledged that Entain’s past expectations of entering the online casino market have not materialized, hindering its growth potential compared to more liberal European markets.
The recent financial status of Entain indicates some challenges, as CFO Rob Wood noted in early 2025 that Poland had a gross gaming revenue margin in the 20% range, compounded by increased competition. Consequently, the company reported a slight loss of market share in the second quarter, primarily due to its rivals' promotional strategies.
Entain’s initial excitement over STS was predicated on the belief that Poland might introduce reforms allowing private operators into the online casino sector, yet substantial legal constraints persist. According to Dr. Gabriele Stark-Lütke Schwienhorst, this limitation means while Entain can offer valuable support to STS, it cannot deliver a comprehensive sportsbook-plus-casino model in Poland, which caps potential synergies that Entain might have sought.
Stark-Lütke Schwienhorst observes that the sale reflects a broader trend of UK-listed operators reassessing their assets in light of rising taxation and the current regulatory landscape. The reality of the Polish betting market’s growth should be balanced with a clear understanding of its governing laws, and future investor interest will hinge on realistic assessments rather than hopes for imminent liberalization of associated casino operations.
Plota also cautioned that while past reforms in Poland have improved enforcement against illegal gambling, they have not eliminated it, as illegal operators find ways to evade restrictions. This situation only highlights the perceived caution surrounding Entain’s sale of a well-performing asset after its difficulties in executing previous African acquisitions. Stella David's earlier statements about no portfolio being a "sacred cow" suggest that Entain's strategy is increasingly pragmatic.
In the evolving landscape, the sale of Entain CEE offers key lessons for investors: even profitable businesses are being viewed as potential sources for balance-sheet relief amidst severe taxation, and the Polish market’s regulatory environment has cultivated a resilient local industry, while the absence of online casino liberalization functions as a considerable limit on substantial growth potential. Investors will now look to see how Entain manages its strategic vision following the divestiture of one of its more reliable assets.
