Entain H1 Revenue Rises as UK Gambling Tax Hike Squeezes EBITDA

Entain grew the top line in the first half of 2026 but watched a step-change in UK gambling duty eat the gain, reporting net gaming revenue up 5% on a constant-currency basis to £2,545.3m while underlying EBITDA slipped 2% to £479.3m. The interim results, published on August 13, 2026, land as the Ladbrokes and Coral owner begins dismantling its Central and Eastern European business to pay down debt.

Both the revenue and the profit line came in ahead of the company’s own expectations; its compiled analyst consensus, last updated July 17, 2026, put FY26 Group EBITDA at £934m excluding parent fees and discontinued operations. The beat on the top line was not enough to protect earnings, because the increase in the UK’s remote gambling duty, which took effect on April 1, 2026, raised the tax the group pays on its largest market.

Chief executive Stella David framed the half as a strong start to the year.

“I am pleased with Entain’s start to 2026 with strong momentum and volume growth continuing as well as strong player engagement across the Group throughout the World Cup tournament,” David said. “This performance reflects our strengthening operations and focused execution which reinforces the resilience of our globally scaled business.”

The World Cup did real work. Online net gaming revenue rose 7% on a constant-currency basis, with gaming up 9% and sports up 4%, and the group said first-time depositors during the tournament were double the number seen at the 2022 World Cup. The UK and Ireland, Entain’s biggest market at more than 45% of group revenue, grew online NGR 13% on a constant-currency basis, with Australia up the same 13% and Canada, New Zealand and Spain all delivering double-digit online growth. Spain was the fastest-growing online market at 28%.

Tax Turns a Revenue Beat Into an EBITDA Decline

The half’s central tension is that growth and profitability moved in opposite directions, and the connector is tax. The UK raised its remote gambling duty from 21% to 40% from April 1, 2026, and Entain’s contribution margin absorbed a 2.9 percentage-point hit from the increase, with gross profit margin in the UK and Ireland falling to 64.1%, down 4.1 points year on year.

The group’s corporate tax charge on continuing operations climbed to £57.8m from £19.5m a year earlier, and the underlying effective tax rate rose to 34.4% from 30.3%. Cash taxes actually paid more than doubled to £93.1m from £42.1m, an increase the company attributed largely to timing. Online underlying EBITDA fell 5% to £395.2m, while retail EBITDA rose 6% to £141.7m, leaving the group total at £479.3m against £488.7m in H1 2025.

Underlying operating profit dropped 10% to £318.9m. After £187.0m of separately disclosed items, the largest of which was a £96.1m legal and onerous-contract provision driven by an increased provision for German player claims, group operating profit came in at £131.9m, down from £146.5m. The bottom line nonetheless improved sharply: a pre-tax profit of £46.4m against a £66.3m loss a year earlier, and a loss after tax from continuing operations narrowed to £11.4m from £85.8m, helped by a £31.4m net gain on financial instruments and foreign exchange.

David leaned on the mitigation programme the group has been building since the duty rise was announced in November 2025.

“Entain is becoming a sharper, fitter, and better connected business,” she said. “I am confident our disciplined focus on growth and optimisation will deliver strong future cash-generation.”

The CEE Exit and the Balance Sheet

Alongside the trading numbers, Entain is executing the first stage of a phased withdrawal from Central and Eastern Europe. On June 25, 2026 it agreed to sell a 20% interest in Entain CEE to joint-venture partner EMMA Capital for roughly €425m, implying an enterprise value of about €2.1bn for the business, or around ten times EBITDA. Completion is expected in early Q4 2026, subject to regulatory approvals.

The deal takes Entain’s stake from 67.5% to 47.5% and hands EMMA majority control through a separate voting agreement. Entain CEE, built on the SuperSport brand in Croatia and STS in Poland, generated £269m in NGR and £94.7m in underlying EBITDA in the half and is now reported as a discontinued operation. Critically for the balance sheet, completing the sale extinguishes a put-option liability carried at £587.4m at the end of 2025 and delivers an estimated £20m annualised interest saving, with proceeds from an eventual full exit earmarked to cut reported leverage below 3x. As at June 30, 2026 adjusted net debt stood at £3,598.9m, a ratio of 3.1x underlying EBITDA.

The group also declared an interim dividend of 10.3p per share, up 5%, payable on September 28, 2026.

The Story So Far

The UK duty rise has been the axis of Entain’s financial story for nine months. Announced in the November 2025 Budget, it drove the group to book a £488m impairment in its 2025 full-year results on March 5, 2026, a year that closed with a statutory loss after tax of £681m. At that same results presentation Entain upgraded its mitigation commitment, saying it now expected to offset more than 50% of the incremental UK tax burden from 2027, up from an earlier estimate of about 25%, through group-wide optimisation.

That optimisation has a cost. The group’s Project Romer restructuring programme and the reshaping of the UK retail estate generated £16.2m of restructuring costs in the half, and the wider efficiency drive has already bitten headcount, with Entain announcing 500 redundancies in July 2026 after earlier ruling out layoffs. Entain is not alone in absorbing the new regime: rival Rank Group lifted its profit outlook in July 2026 even as job cuts offset its own tax hit, and Flutter, which swung to a Q2 net loss earlier in August 2026, is navigating the same UK duty environment.

What Happens Next

The dated markers from here are largely legal and transactional. The German Federal Court of Justice has scheduled an oral hearing for September 2026 in a lead case on online-casino player restitution claims, a ruling Entain expects to set the authority for its own exposure, having already recorded a €100m provision after an adverse European Court of Justice ruling in April 2026. A separate ECJ ruling on sports-betting player claims is expected by the end of 2026, and a further mediation meeting in the AUSTRAC civil-penalty proceedings against Entain’s Australian arm is expected at the end of September 2026, with the provision held at AUD$100m.

On the portfolio, the initial 20% CEE sale is expected to complete in early Q4 2026, with a further payment reflecting full-year 2026 performance due in early 2027. Entain reiterates full-year 2026 guidance of 5-7% online NGR growth on a constant-currency basis and an underlying EBITDA range of £910m to £960m excluding parent fees, and it continues to target at least £500m of annual adjusted cash flow from 2028. The next scheduled trading update is the Q3 statement on October 15, 2026.

The drag from its US joint venture is the one item without a fixed date. BetMGM, which began paying parent fees to Entain and MGM Resorts in 2026 after reaching sustainable profitability, delivered H1 net revenue of $1.4bn, up 4% on a constant-currency basis, and adjusted EBITDA of $99m, and reiterated full-year guidance of $2.9bn to $3.1bn in revenue and $300m to $350m in adjusted EBITDA, though toward the lower end of both ranges. BetMGM now expects its longer-term target of more than $500m in adjusted EBITDA to land beyond the previously anticipated 2027 timeframe, a delay that follows the profit-target push it signalled in July 2026 as prediction markets squeezed its US sportsbook economics.