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Entain will consider strategic alternatives for CrystalBet as its Capital Allocation Committee (CapCo) concluded its extensive review of the business.

The review recommended little change to Entain’s portfolio, including its brands, capabilities and geographic footprint, belying previous rumours of a wide-ranging asset sale.

The initiative, which launched in January, saw all business units except its US joint venture BetMGM placed under strategic review.

Following the review’s conclusion, the company instead said there is significant upside in focusing on delivering its strategy of returning to organic revenue growth, expanding margins and succeeding in the US.

Entain chair Barry Gibson (pictured) said: “Whilst we still have more work to do to improve our operational performance, the board is pleased with the progress Entain is making so far in 2024 in line with our strategy.

“The group has the core strengths, brands and products to be competitive across its markets and continues to be a global leader in betting and gaming.”

Entain added its balance sheet and leverage position is robust and highlighted recent refinancing measures as proof of this.

The company’s PartyPoker brand was rumoured to be on the chopping block in the review, with Entain reportedly targeting a £150m selling price.

Entain looks to sell ‘non-core’ CrystalBet

However, Entain has now concluded that only its Georgian CrystalBet brand is “non-core” to the group.

Strategic alternatives for the business will now be considered, said Entain, with interest already received from potential buyers.

CrystalBet was named one of the brands most likely to be sold, alongside Netherlands-facing BetCity, Australia’s Ladbrokes arm and Sweden’s Enlabs, according to reports.

Entain said the CapCo considered developments in key markets and operational progress towards objectives.

These have included the Brazilian market’s return to growth, the impact of UK regulatory changes and the product roadmap for BetMGM.  

The business said the CapCo will continue to regularly review strategic progress and consider options to maximise shareholder value.

A time of flux

The conclusion of the strategic review comes at a time of flux for the company, with the business searching for a new CEO amid a mixed quarterly performance.

Previous chief executive Jette Nygaard-Andersen resigned in September 2023 following investor concerns over questionable M&A deals, a flatlining share price and slowdowns in core markets.

This included a campaign by several activist investors, led by Eminence Capital’s Ricky Sandler, which eventually led to him being appointed to Entain’s board.

The Ladbrokes-Coral operator’s Q1 2024 financial report saw a 3% overall revenue decline resulting from headwinds including UK regulatory pressure.

Consultants at Regulus Partners said at the time: “The online gambling industry has a habit of promising easy growth and delivering complex operational and regulatory challenges.

“Historically, sound operations management within the tram lines of regulatory risk tended to decide success or failure, with M&A scale and operational synergies appearing to offer easy momentum to disguise flagging secular growth.

“However, customers and markets are now far more complex than this simple bottom-up business approach allows.

“Entain has the scale, diversification, and middle-management expertise to deliver a turnaround.

“However, Entain now needs a level of (lonely, nervous, terrified) senior strategic leadership and direction that it has never really had to prevent dis-synergies from forcing the pieces to fall apart.”

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