Shares in gambling group Entain rise

Shares in Entain, the gambling group behind Ladbrokes and Sportingbet, rose by 5% this week following an encouraging update, says Dominic Walsh in The Times . Entain said that there had been “positive momentum at the start of the second half, with the pace of growth continuing in the third quarter”. Online UK and Ireland operations benefited from an acceleration in the rebound of gaming and sports betting, with volumes and margins improving.

The international and central and Eastern Europe markets also did well. All this provides a “comfortable start” for new CEO Gavin Isaacs. The trading update has definitely “put a rocket” underneath Entain ’s share price, helping to restore the market’s confidence in the company’s “ability to bounce back after a patchy few years”, says AJ Bell’s Russ Mould. Recent problems include a bribery investigation and allegations that it overpaid for acquisitions that have disappointed.

The stock slid by 75% between September 2021 and August 2024. This, in turn, has led to the company being “circled by activist investors hoping to push through change and score an easy win”. As a result, so much bad news has been priced into Entain’s valuation that even “the smallest bit of positivity” has prompted a rally.

Will Entain's luck continue?

Both the recent news and the latest rally in its share price, suggest that Entain seems to be “overcoming recent challenges”, says Derren Nathan for Hargreaves Lansdown . There are also “some attractive growth prospects to go for”, including the “relatively immature but potentially huge market for online betting and gaming” in the US, in addition to Brazil.

Note, however, that regulatory changes remain a risk “and not something that can always be predicted”, while unfavourable sporting results “can also cause financial results to disappoint, regardless of strategic progress and economic conditions”.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription .