BetMGM joint venture boosts Entain's profits
Entain uses AI to reduce production and asset generation costs, CEO said
Entain aims to mitigate tax impact by over 50% in 2027
Adds CEO quote in paragraph 3, CFO quote in 8, details and background throughout
By Yamini Kalia
March 5 (Reuters) - Ladbrokes-owner Entain ENT.L posted slightly better-than-expected annual profit on Thursday and said group-wide cost cuts would offset the impact of more than 50% of Britain's online gambling tax increases, sending its shares up nearly 8%.
The results underscore how the UK's steep tax increase is reshaping the gambling market, with Entain's global scale and diverse portfolio helping it absorb the hit better than smaller rivals and gain market share as competitors struggle under the new regime.
"We're using AI a lot now, so our production costs, asset generation costs have gone down," CEO Stella David told Reuters, adding that the company has implemented measures to reduce marketing and promotion costs.
Entain expects about 200 million pounds in additional annual costs from the UK's proposed gambling tax hikes and plans to mitigate about 25% this year and more than 50% in 2027.
The company, which owns Ladbrokes and Coral and operates BetMGM in the United States, booked a 488 million pound non-cash impairment charge against its UK business after the government's decision in November to sharply raise online gambling duties from April.
That resulted in a loss after tax of 680.5 million pounds in the year ended December.
Entain logged 1.16 billion pounds in underlying core profit for 2025, beating expectations of 1.11 billion to 1.15 billion pounds, according to a company-compiled poll.
The company has benefited from an accelerating shift to online gaming and sports betting, especially through its BetMGM joint venture with MGM Resorts MGM.N in the United States, even as UK tax hikes weighed on operations.
"Both parents are extremely proud of our child," CFO Rob Wood told Reuters, while David noted that the business has become a valuable asset to Entain and MGM Resorts.
Peel Hunt analyst Ivor Jones also called the BetMGM business a "standout", after it distributed $270 million its parent companies during 2025.
(Reporting by Yamini Kalia in Bengaluru; Editing by Mrigank Dhaniwala and Nivedita Bhattacharjee)
((Yamini.Kalia@thomsonreuters.com))