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Entain has drawn the curtain on 23 consecutive quarters of double-digit online growth by reporting a 9% decline in online revenue for Q4 2021.

The downturn was anticipated and actually came in ahead of management expectations after CFO Rob Wood predicted a 13% decrease for Q4 in a post-Q3 earnings call.

The year-on-year decline was driven by several factors, including Entain blocking its services to consumers in the Netherlands and weaker sports margins across the board.

It was also a particularly tough comparative quarter after Q4 2020 revenue rose by 41%, primarily influenced by digital gains as a result of Covid-19 lockdowns.

When broken down by vertical, online sports betting revenue fell by 14% for Q4 2021, while online gaming revenue dropped by 4%.

Total group revenue for Q4 came in 4% higher, aided by the reopening of Entain’s vast retail estate. This led to a 60% year-on-year rise in Q4 retail revenue.

The FTSE-100 operator also provided a full-year 2021 update, in which online NGR rose by 12% thanks to strong growth in all major markets excluding Germany, where the new regulatory regime is still making life difficult for online gambling operators.

Entain’s online growth continues to be driven by active customers, the number of which climbed 25% annually.

Group NGR for 2021 increased by 7%, or 14% when including the US-facing BetMGM joint venture, with retail a 3% drag due to more Covid-19 restrictions than in the prior corresponding period.

EBITDA for full-year 2021 is expected to be in the range of £875m and £885m, which is again ahead of the firm’s previously communicated expectations.

Looking ahead to 2022, Entain has promised to invest £25m into its “new opportunities” division to support the launch of its first esports skill-based wagering products. This follows the firm’s undisclosed acquisition of esports operator Unikrn in August 2021.

Entain CEO Jette Nygaard-Andersen said: “2021 has been a successful and eventful period for Entain, and our market-leading platform has driven another year of strong, sustainable and diversified growth.

“All of our major markets have performed well. BetMGM, our hugely exciting business in the US, has been a particular highlight with FY21 net gaming revenue ahead of expectations and an upgraded outlook for 2022.

“We have also made significant operational progress and have continued to provide our customers with even better content, experiences and excitement as the worlds of media, entertainment, technology and gaming converge.

“We continue to see significant growth opportunities ahead of us, with a total addressable market of around $160bn across our new and existing markets, as well as in emerging areas of interactive entertainment.

“We believe these opportunities will enable us to at least treble the size of our business. As a result, we remain confident in our prospects for the year ahead and beyond,” she added.

London-based investment bank Peel Hunt said Entain’s share price (1,725p) currently fails to reflect BetMGM’s increasingly strong position in the US. It reiterated its Buy rating for the stock and 2,400p target price.

Numis has also stuck with its Buy rating and 2,800p target price. “Entain remains our key gaming pick owing to its trading momentum, scale, geographic diversification, US position and valuation support from a potential return bid from MGM,” said Numis director Richard Stuber.

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