Entain is reportedly evaluating various strategic options for its joint venture in Central and Eastern Europe, which may include a potential sale. This development arises as the owner of Ladbrokes grapples with increased expenses due to rising online gambling taxes in the UK, as reported by three sources familiar with the situation.
The London-based firm, which also owns Coral and operates BetMGM in the United States, is actively seeking methods to mitigate the financial impact of these tax hikes. The tax on online casino games and slots is set to increase from 21% to 40%, while the rate for sports betting will rise from 15% to 25%.
Entain anticipates that these changes will lead to an additional £200 million ($264.3 million) in annual costs. The company plans to offset approximately 25% of this impact this year, with aspirations to exceed 50% by 2027.
One potential avenue being considered is divesting Entain's stake in the Central and Eastern European venture to EMMA Capital, the Czech investment firm that is currently a partner in the joint venture. Any funds generated from such a sale could be utilized to reduce the company's debt, according to one of the sources.
It is important to note that discussions are still in the preliminary stages, and there is no guarantee that a transaction will materialize, as stated by the sources who requested anonymity due to the confidential nature of the talks.
This review follows Entain's recent financial disclosures, which revealed a market valuation of £3.5 billion ($4.63 billion) and an adjusted net debt of £3.64 billion ($4.81 billion) at the end of 2025.
Despite reporting an annual profit of £1.16 billion ($1.53 million), the company faced a £488 million ($645 million) non-cash impairment charge against its UK operations due to the government's tax changes, resulting in a post-tax loss of £680.5 million ($899.5 million) for the year ending in December.
Since the announcement of the new taxes in November, Entain's shares have dropped by approximately 30%. However, following the Reuters report on Thursday, the shares experienced a slight increase of 0.8% on Friday.
The Central and Eastern Europe venture, primarily owned by Entain, was established in 2022 when Entain and EMMA Capital acquired the Croatian sportsbook operator SuperSport. This transaction included a call-and-put option regarding EMMA's stake, which either party can exercise starting from the third anniversary of the deal, potentially paving the way for Entain to gain full ownership.
In 2023, the venture expanded further with the acquisition of Polish betting operator STS for around £750 million ($991.4 million). According to the company's full-year results, Entain CEE generated £183.7 million ($242.8 million) in earnings before interest, tax, depreciation, and amortization in 2025, an increase from £170 million ($224.7 million) the previous year.