As others in the US online gambling industry shrink away from financial gambles, Entain is embracing them. Six days after its Q3 2022 trading update, the company that’s best known as half of BetMGM‘s ownership team announced today that it secured a $1 billion loan.
The term loan will fund Isle of Man-based Entain’s acquisition goals. Those include buying BetCity (the Netherlands) and SuperSport (Croatia).
Entain’s announcement today reads:
The New Loan was upsized from $750m to $1,000m following strong demand from global credit investors.
Entain, half of the BetMGM joint venture with Las Vegas-headquartered MGM Resorts International, didn’t mention any US online casino uses for the $1 billion.
Besides the two planned acquisitions, the announcement said vaguely that the loan would maximize “Entain’s liquidity and provide further balance sheet flexibility.”
Entain’s stock (ENT) closed down 3% today.
Bold Action in a Stalled M&A Market
During the Oct. 13 trading update, Entain CEO Jette Nygaard-Andersen hinted that after the company turns a profit in 2023, there may be a US BetMGM IPO.
And then when we reach that point, that could open up further opportunities for us. So whether it’s through dividend[s], or … we – at some point – could look at an IPO.
The idea likely interests investors, considering a long-awaited US FanDuel IPO is on hold.
Also, taking BetMGM public may put the brakes on bids from Entain suitors. Entain rejected takeover offers from BetMGM partner MGM and competitor DraftKings.
In addition to a possible US BetMGM IPO, Nygaard-Andersen briefly talked about Unikrn. That’s a Seattle-headquartered esports betting platform Entain bought in October 2021.
However, she continues not to provide a launch date.
On Sept. 22, Nygaard-Andersen said during her presentation at the East Coast Gaming Congress and NexGen Gaming Forum (ECGC) that Unikrn was about to launch.
She repeated it on Oct. 13:
Alongside the US, we continue to see growth across our other strategic pillars.
Our core online markets are expected to grow at around 7[%] to 8% CAGR over the next five years, with some of our newer markets growing at double-digit rates. We have announced nine transactions in the last 18 months, five this year, taking us into new markets, as well as deepening our presence in growing markets.
And in new opportunities, Unikrn is getting ready to launch our skill based wagering product, opening-up an exciting and potentially significant new opportunity.
Whether or not Entain’s avoiding the unicorns and elephants of esports launch dates in the room, the company now has a lot of breathing room. The $1 billion loan’s cash arrives this month.
Entain CFO and Deputy CEO Rob Wood said on Oct. 13:
We’ll continue to look at a mix of bonds and term loans. And we’ll get the SuperSport financing done first. And then we’ll assess the market. And we’ll keep monitoring it. And, when it feels like the right time, we’ll move forwards with likely a mix of bonds and term loans in the future. So, we have flexibility there.
It was a bit of a surprise how quickly that flexibility arrived.