The owner of Ladbrokes and Neds says expanding its Aussie footprint is no gamble

Entain, owner of the Ladbrokes and Neds brands, makes about 14pc of its global gaming revenue in Australia and wants an even greater footprint here.

Entain chief executive Jette Nygaard-Andersen.

Entain’s chief executive, Jette Nygaard-Andersen, calls her global betting giant a “consolidator” of the industry and describes the company as “good buyers”.

Which could have big implications for the wagering sector in Australia, where Entain has big plans to grow via merger and acquisition or organically – and likely a combination of both.

As the owner of the Ladbrokes and Neds brands, Entain already has a big presence in Australia, where the company is pushing close to a 20 per cent share of the online wagering market.

Entain last year had a $3.5bn takeover bid for Tabcorp rejected by Tabcorp’s board. Given Tabcorp’s market capitalisation is now about $2.1bn, Entain could return as a suitor again soon. It is also pursuing a $1bn bid for the Western Australia gambling licence, with a decision likely due by mid-October.

In an interview to mark her first visit to Australia this week after becoming Entain’s chief executive in January 2021, Ms Nygaard-Andersen makes clear that M&A activity is a central part of Entain’s global growth plans.

“If there’s any opportunities to do M&A, we’ll certainly look at them, but otherwise we will continue to grow organically in the (Australian) market,” she tells The Weekend Australian.

Entain chief executive Jette Nygaard-Andersen

“As I said back in the days when we put the offer forward for Tabcorp, I believe we would be a great owner of that business. And I believe we put a fantastic offer forward but the (Tabcorp) board decided to do otherwise.

“So anything I can do to back the team here and help them grow and we’ll look at all opportunities …(and) certainly anything that can help us grow and that we think is a great strategic fit for the company – we’ll look at.”

Entain’s Australian business, headed by Brisbane-based Dean Shannon, contributes about 14 per cent of Entain’s global gaming revenue, which hit £3.8bn ($6.5bn) last year, making it Entain’s second biggest market for now behind only the United Kingdom.

The United States, where Entain has a joint venture with MGM Resorts International called BetMGM, is “easily going to be the largest betting and gaming market in the world”, says Ms Nygaard-Andersen, and forms a big part of Entain’s growth plans. But she describes Australia as an “amazing market” for her business.

“It is a business that’s taking market share and we are extremely ambitious in this market. The team here continues to innovate, launch new products and we have an ambitious target for (even) more market share. So we love it here.”

Entain is launching a global innovation hub at its Brisbane headquarters, where the company wants to help nurture start-ups, budding entrepreneurs, and test new technologies and entertainment products as part of a global £100m investment.

Entain is the owner of the Ladbrokes and Neds brands.

That could lead to Entain providing seed funding for start-ups connected to the betting and entertainment industries.

In the meantime, Ms Nygaard-Andersen says Entain is scouring the globe for acquisition opportunities in dozens of countries where new betting markets are opening up.

“I’ve done nine acquisitions since I took over as a CEO and there’s a couple of reasons for that. In our industry, M&A is just a great way for us to grow fast. But also the returns on M&A in our industry is just fantastic.

“So we use M&A for a way for us to grow both into new markets but also to deepen our presence in existing markets.

“So when I look across the industry and our growth strategy, I look at potentially 40 to 50 new markets that are being regulated over the next couple of years. We will be able to grow into those markets and very often to use M&A.

“And that’s why I think of us as the consolidator of the industry with smart buyers and we are good buyers.”

The US is the obvious market for growth, she says, given only about 40 per cent of the country has legalised online betting state by state. Most other states are considering making similar moves, giving companies like Entain an “enormous pathway for growth going forward”.

With new markets comes increased regulation. While Ms Nygaard-Andersen says “regulation is part of business as usual in our industry” and that betting is a “regulated industry and should be a regulated industry”, it does provide some challenges.

In Britain, amid a mooted crackdown on gambling laws, Entain was told to pay a record £17m settlement in August over anti-money laundering and customer safety practices.

Meanwhile, in Australia, Entain faces an AUSTRAC investigation over whether it failed to comply with its responsibilities to combat serious and organised crime from July 2016 to June 2020.

“I think it’s important to note that this investigation predates all the things that we have put in place over the last couple of years,” Ms Nygaard-Andersen says, when asked about the AUSTRAC investigation.

Entain is pursuing a $1bn bid for the Western Australia gambling licence.

“(There is) the player protection framework that we now have here in Australia, which is called Punter Assist, and all the different processes around compliance and protecting our players that we’ve put in place.

“So (the investigation) predates that. It’s still early days. So we will engage with the regulators and we co-operate as fast as possible.”

This week, The Australian revealed that the federal government is set to unleash an advertising crackdown on online wagering companies, forcing them to comply with a raft of pre-written taglines and other messages aimed at curbing problem gambling.

In the paper, the government has drafted seven new taglines to replace the “gambling responsibly” statement that currently features on online wagering advertisements.

The new government-written taglines include: “Chances are you’re about to lose; what’s gambling really costing you? Imagine what you could be buying instead” and “What are you really gambling with?”, which must feature at the end of gambling advertisements published across all mediums within six months.

“When new regulation comes in place, it’s typically a benefit for the established operators with the strong brands and the strong products and then have processes and procedures and player protection in place,” Ms Nygaard-Andersen said.

“And so it’s part of doing business in our industry, and we have a lot of experience around it. So we’ll engage with the regulator and hopefully have a good discussion of what is appropriate.