Oct 12 (Reuters) - British gambling company Entain,
the subject of a $22 billion takeover approach from U.S. rival
DraftKings, reported higher quarterly revenue on
Tuesday, led by stronger betting activity at its fast-growing
BetMGM joint venture.
Entain, home to Ladbrokes and Coral betting shops as well as
the bwin and partypoker online brands, said net gaming revenue
rose 4% in the three months to Sept. 30 while revenue from
online sports betting jumped 12%.
The results come a week before a takeover rules deadline
requiring DraftKings to make a firm bid for Entain or walk away.
DraftKings' $22 billion offer is double a bid Entain rejected
from joint venture partner MGM in January.
Some analysts say that strong results and signs of progress
on major initiatives, such as U.S. expansion, could convince
Entain to reject DraftKings' offer on the grounds that it
undervalues its prospects.
Entain and MGM's jointly owned BetMGM online sportsbook grew
its online gaming market share to 32% for the three months to
Aug. 31, compared with 30% for the quarter to June 30. The
venture launched a national advertising campaign to coincide
with the start of the National Football League (NFL) season last
BetMGM is viewed as a major factor driving DraftKings'
interest in Entain. The U.S. venture has grown steadily and
challenged FanDuel owner Flutter, the No.1 player in
the sports betting and online gaming market.
MGM has said that any deal in which Entain or its affiliates
end up owning a competing business would require its consent.
"The BetMGM JV is making a credible push for ... market
leadership," analysts at Peel Hunt said in a client note on
Tuesday, calling the business a "roaring success."
"This could be the perfect time for Entain to sell out of
the BetMGM JV if MGM can be pushed to overpay," they added.
Like its rivals, London-listed Entain has enjoyed a boom in
online gambling through the COVID-19 pandemic, with events such
as last summer's European soccer championship and the NFL having
helped to revive sports betting.
Dealmaking in the industry is also heating up as the United
States opens up to sports betting and companies look to expand
into more developed gambling markets such as Britain.
Meanwhile, gambling volumes at Entain's betting shops, long
a feature of Britain's high streets, were above 90% of
pre-pandemic levels, while retail betting activity was steadily
recovering in Europe, Entain said.
The company also maintained its forecast for annual core
earnings of 850 million to 900 million pounds ($1.16 billion to
($1 = 0.7350 pounds)
(Reporting by Sachin Ravikumar in Bengaluru
Editing by Sriraj Kalluvila and David Goodman)