Entain’s 1H26 net gaming revenue rises 5% as online drives growth

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The Backstory

Online momentum offsets pressure elsewhere

Entain’s first-half 2026 results sit at the intersection of two strategic shifts: a sharper focus on regulated online growth and a push to simplify the balance sheet after years of expansion. The company’s 5% increase in net gaming revenue to £2.5 billion was led by online betting and gaming, where volume growth and stronger player engagement helped offset weaker profit conversion and continuing cost pressures.

The headline growth figure masks a more complicated operating backdrop. EBITDA fell 2% to £479 million, even as it beat market expectations cited in the results. That split reflects the central challenge for large gaming groups in 2026: digital demand remains resilient, but tax, regulatory compliance, customer acquisition costs and technology investment are weighing on margins. Entain’s decision to maintain its full-year outlook indicates management believes the online gains are durable enough to absorb those pressures.

The company’s recent moves also show a business becoming more selective. Rather than chase scale across every geography, Entain is prioritizing markets where regulation, brand strength and online migration can produce higher-quality growth. That puts Australia, the UK and Ireland, New Zealand and the U.S. BetMGM joint venture at the center of the investment case.

CEE exit signals debt discipline

The most visible example of Entain’s new capital discipline came in June, when the company announced a phased withdrawal from its Central and Eastern Europe business. Entain agreed to sell a 20% stake in Entain CEE back to joint venture partner EMMA Capital for €425 million, or about $484 million, in a transaction that implied a €2.1 billion valuation for the unit.

The deal marked a reversal from the company’s earlier push into the region. Entain CEE was created in 2022 after EMMA sold a 75% stake in Croatian operator SuperSport to Entain. The venture later expanded with the acquisition of STS, Poland’s largest bookmaker. Those assets gave Entain meaningful exposure to regulated sports betting markets in Croatia and Poland, but also added complexity at a time when investors were pressing the company to reduce leverage and improve cash generation.

As detailed in Entain’s agreement to sell part of Entain CEE to EMMA Capital, the initial proceeds are earmarked for debt reduction, with completion expected in the fourth quarter of 2026 pending regulatory approvals. Entain also said it would continue evaluating options to exit its remaining minority interest. Once the sale closes, the company will stop recognizing its share of Entain CEE profits and dividends until a full exit is completed.

The effect is twofold. In the short term, reported earnings lose a contributor. In the longer term, Entain reduces leverage and narrows management focus. The company’s updated guidance after the deal kept online net gaming revenue growth expectations intact but lowered the expected online EBITDA margin range, underscoring that the exit improves balance-sheet flexibility more than immediate profitability.

New Zealand becomes a test market

New Zealand has emerged as one of Entain’s most important growth laboratories. The country’s Online Casino Gambling Act 2026 came into force May 1, setting up a licensing regime that will replace a market long dominated by offshore casino operators. From Dec. 1, only licensed operators will be able to serve New Zealand customers, with up to 15 licenses available and a cap of three licenses per operator.

Entain enters that process with a major advantage. Through its long-term strategic partnership with TAB New Zealand, the company operates the country’s sole regulated online racing and sports betting platform. That position gives it an existing customer base, local infrastructure and brand awareness as online casino licensing opens. Entain has said it intends to bid for multiple licenses and aims to become a full-suite online gambling provider in the country.

The company has also reorganized leadership around that opportunity. In July, Entain appointed Chris Haigh as managing director of its New Zealand operation, a newly created role meant to sharpen local execution ahead of the casino market launch. The change, covered in Entain’s New Zealand leadership overhaul before online casino licensing, reflects how central the market has become to the group’s online strategy.

New Zealand’s contribution remains smaller than Australia’s, but its growth rate is drawing attention. Entain’s first-half results showed international online net gaming revenue rising strongly in the country. That growth follows earlier comments from regional management that the New Zealand business was expanding rapidly as Entain shifted away from lower-return projects and back toward core digital wagering.

Australia reset sharpens regional focus

Entain’s Australia and New Zealand operations have gone through their own internal reset. The company previously pursued a broader entertainment strategy in Australia, including investments in thoroughbred horse ownership and pub-based gambling lounges. Those efforts failed to generate the expected returns and became a distraction from the company’s core online betting brands.

Andrew Vouris, who became chief executive of Entain’s Australia and New Zealand business in 2025, has since moved to cut costs and narrow the agenda. The company has reduced head count in the region, divested its horse-ownership interests and sold its venue-entertainment branch. The shift was outlined in Entain’s move to refocus on online growth in New Zealand, which also highlighted plans to improve the Ladbrokes and Neds apps and build market share through a stronger sports betting product.

That regional turnaround matters because Australia and the UK and Ireland were among Entain’s strongest online markets in the first half. Australia remains competitive and heavily regulated, while online casinos are not permitted there. New Zealand, by contrast, offers a newly regulated casino channel that could complement the group’s existing sports betting operation. The contrast increases the strategic value of New Zealand within the broader regional portfolio.

There are risks. Entain continues to face scrutiny from Australia’s financial intelligence agency, AUSTRAC, over historical anti-money laundering issues. Any enforcement outcome could add costs or require further compliance investment. Still, the operational logic is clear: simplify underperforming ventures, invest in digital product and use regulated openings such as New Zealand to expand addressable revenue.

Cost cuts reflect a tougher industry

Entain’s growth strategy is unfolding as the broader gambling sector faces heavier fiscal and regulatory burdens. In the UK, tax increases introduced in April have raised costs for operators, with Entain previously estimating an annual impact of about £200 million. Those pressures have contributed to investor concern about profitability and cash flow, even for companies still posting online revenue growth.

The company has responded with workforce reductions and efficiency measures. According to reports that Entain planned to cut 500 jobs amid UK gambling tax pressure, the reductions affect corporate, product and technology teams and represent about 2% of its workforce. Entain framed the cuts as part of a wider effort to improve efficiency, support margin expansion and strengthen cash generation.

The job cuts, CEE divestment and regional restructuring all point to the same financial priority: protect investment capacity for markets and products with the clearest path to regulated online growth. That is why first-half EBITDA performance matters almost as much as revenue growth. Entain is trying to prove that higher online volumes can translate into cash generation after taxes, compliance costs and marketing spending.

The U.S. remains another key part of that equation. BetMGM, Entain’s 50-50 venture with MGM Resorts, retained its 2026 guidance for $2.9 billion to $3.1 billion in revenue and $300 million to $350 million in adjusted EBITDA. The venture gives Entain exposure to a large regulated market without carrying the full capital burden alone, fitting the broader effort to balance growth with financial discipline.

Competition is moving toward regulated openings

Entain is not alone in targeting new regulated online markets. The coming launch of New Zealand’s online casino licensing regime has attracted interest from international operators looking for jurisdictions with clear rules and limited license numbers. That increases the stakes for Entain’s application strategy: its TAB relationship provides an incumbent advantage, but it does not guarantee dominance in casino once licenses are awarded.

Philippine operator DigiPlus Interactive Corp. has also signaled plans to pursue New Zealand. In its second-quarter 2026 results, the company said its board had approved filing an expression of interest to apply for a New Zealand gaming license. The move, reported alongside DigiPlus’ sharp increase in second-quarter net income, shows how profitable Asian online operators are looking to export platforms, data capabilities and proprietary content into regulated markets.

That competitive pressure helps explain Entain’s urgency. The company’s first-half online growth gives it momentum, but the next phase depends on execution: securing licenses, improving product, controlling costs and reducing debt. If management delivers, the 2026 results could mark the start of a more focused growth cycle. If margins remain under pressure or new markets disappoint, investors may view the revenue gains as insufficient against the industry’s rising cost base.

For now, Entain’s backstory is one of retrenchment and redeployment. The group is selling down a once-prized European venture, cutting costs where necessary and putting more weight behind regulated online markets where it believes it has structural advantages. The first-half results suggest that strategy is beginning to show in revenue. The unresolved question is how much of that growth will convert into sustainable earnings.