Entain’s decision to end Cheltenham sponsorship highlights divisions.
In +More: CFTC boss talks up predictions market support.
Earnings PRO: Las Vegas Sands and Rank report.
Adjacencies: EKG’s social casino review of Q4 and FY25.
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Run ragged
And his coat is torn and frayed: Entain pinned the blame for its decision to end its 52-year sponsorship of the Coral Cup at the Cheltenham Festival squarely on the tax rises on online gaming introduced by the Chancellor in last November’s Budget.
It’s seen much better days: But while the cutting of a high-profile sponsorship is an obvious move to help make the case for the tax mitigation, which Entain spoke about at the time of the Budget news, it is also a “two-finger salute” to the racing industry, as one source termed it.
Existing tensions between the two sectors were exacerbated by the differential treatment of horseracing betting and other forms of online gambling.
The racing sector successfully campaigned for no change to horseracing betting tax.
But the online sector saw the introduction of a new 25% general betting duty and the hiking of remote gaming duty to 40%.
I just want to see his face: Entain framed this week’s ending of the sponsorship with immediate effect as a decision that was “regrettable” and one taken in “sadness.”
“The sheer size of the government’s recent tax increase on betting operators means we are having to take very difficult decisions as we look to mitigate some of the huge impact,” said Simon Clare, Entain’s consumer PR.
Putting a brave face on the news, the Jockey Club spokesperson said it continued to have a “strong relationship with Entain as an official betting partner and will continue to work closely with its brands.”
Exile on main street: The message was similar from Clare, who said racing remained “very important” to Entain. But he added that horseracing would “continue to be the most expensive product we offer, given the huge cost of media rights on top of the statutory levy.”
The news of the cancellation of a sponsorship that dates back to 1974 comes as Betfred’s dispute over media rights fees continues.
As reported at the start of this month, the company has pulled the plug on racing content from 21 UK tracks for the foreseeable future as it holds out against renewing its media rights deal with racecourse owner Arena Racing Company.
A source close to Entain denied allegations that the decision was driven out of spite given the fissure that has opened up between the two sectors. Certainly, Clare argued that racing and betting should work “even harder” on growing the appeal of the sport.
He linked that with the ongoing debate over the costs of covering racing, arguing the two should “ensure that it does not get any more expensive.”
Tumbling dice: An industry commentator who opted for anonymity said the cancellation likely served a dual purpose.
At the same time that it worked as a marker on the wider debate around taxation of the sector, it also signaled to investors the company’s seriousness over seeking mitigations.
Ventilator blues: Another industry insider who preferred anonymity added that “previously there would have been nervousness” at any operator removing a heritage association such as the Coral Cup and Cheltenham. “But that is not the case now,” they added
The source went on to suggest opportunities to save the marketing budget by ending racing sponsorships would be grabbed at.
“The widespread view is that racing has thrown the operators under the bus over tax,” they argued.
“So, if operators have a choice between sponsoring racing or laying out for other sports, they will now be opting for the other sports.”
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+More
Meet the new boss: New Commodity Futures Trading Commission chair Michael Selig told a CFTC-SEC “harmonization” event held yesterday that the regulator would defend its turf on event contracts, including sports, and was withdrawing a rule proposal dating back to 2024 that would have banned event contracts on politics and sports.
Coinbase has launched its prediction markets offering across the US via its partnership with Kalshi, having previously launched on a pilot basis. The company said users can now fund prediction trades with cash or USDC held in existing Coinbase accounts.
High Roller Technologies highlighted that the $25m raised via the recent sale of stock plus the $1m strategic investment from Saratoga Casino will help underpin its expansion into the booming prediction markets space. In an update, the company also spoke about its efforts to build a marketing effort ahead of launch, including its deals with Leverage Game Media and Forever Network.
Jackpot.com has secured a $10m revolving credit facility from House Advantage Fund, a user-acquisition financing strategy backed by Discerning Capital and PvX Capital, to support nationwide expansion. The funding will accelerate growth in existing states and new market launches.
SEGG Media has announced that a US federal court dismissed all remaining claims in a legacy lawsuit after previously eliminating the federal claims, closing the case for lack of subject-matter jurisdiction. However, as reported by Next.io, the company is facing a lawsuit brought by the SEC over allegations of fraud related to its previous SPAC deal.
Datapoints
Nevada: Gaming revenue on the Las Vegas Strip declined 6% YoY in December to $828m but was flat over the whole of Q4 and only 1% lower than 2024 for the full year, “despite all the negative headlines around Las Vegas,” said the team at Citizens. Yet the visitation figures belied such optimism, falling 9.2% YoY in December and bringing the full-year decline to 7.5% vs. 2024.
Read across
Hot potato: Loot boxes are moving into a new regulatory era. Think less legal ambiguity, and more total abandonment. The potential harms have been acknowledged, and in some cases, the rules are black-and-white. From yesterday’s Compliance+More.
Hitchin’ their wagons: Legislators in West Virginia and Massachusetts are weighing punitive increases in online gambling taxes, with proposals that put rates into a very different bracket for operators whilst restricting certain products. From Tuesday’s C+M.
+More careers
Raketech CFO Måns Svalborn has stepped down from his position to pursue outside opportunities. The company is in the process of appointing a successor. SoftSwiss has named Denis Romanovskiy as chief artificial intelligence officer. Sun International has appointed Mark Sergeant as COO. Konami Gaming has appointed Deron Hunsberger as VP of North American game sales.
Head of Marketing – Dubai
Senior .NET Developer – Toronto
Head of Sports CRM – Valencia
Earnings Extra
Las Vegas Sands
Best not good enough: Las Vegas Sands is running out of superlatives to describe the performance of the Marina Bay Sands casino resort in Singapore with CEO Rob Goldstein, conducting his valedictory earnings call before he departs as CEO, describing the quarter just gone as “simply the greatest quarter in the history of casino hotels.” Yet, a post-close 10% slump in the share price suggests investors are more worried about how the company is responding to a competitive picture in Macau.
See yesterday’s Earnings Extra edition (PRO subscribers only).
Rank
Parting shot: In CEO John O’Reilly’s last earnings call after eight years at the helm, he remained positive about the overall business with the company reporting 6% like-for-like NGR growth to £419.8m, with all segments expanding and digital up 8%. Underlying like-for-like operating profit rose 15% to £40.6m.
An Earnings Extra edition covering Rank in full will be sent later today.
Earnings in brief
Groupe Partouche: The French casino operator reported €748m in GGR for the 12 months to October, up 5.1% YoY, driven by slot and table gaming growth. On a like-for-like basis, excluding certain acquisitions and a new casino opening, GGR climbed 3% to €734m. EBITDA rose 28% to €94.4m, and operating income jumped to €86.9m from €15.2m in the prior year.
Betr Entertainment: The Australian bookmaker reported H1 FY26 underlying turnover growing ~13%, outpacing the market by 4x, but delivered a ~A$13.2m ($9.2m) EBITDA loss due to customer-friendly results and “strategic investments.” The company is now targeting H2 FY26 normalized EBITDA of A$5m-A$8m, and A$13m-A$19m in 2027. An on-market share buyback of up to 10% was also announced.
BetMakers: The Q226 trading update showed 14% revenue growth to A$22.9m ($16m) and a positive adj. EBITDA of A$2.7m, marking four consecutive profitable quarters. Gross margin expanded to 66.4%. The company secured major agreements with Stake.com, Penn Entertainment and CrownBet. Operating cash flow turned positive and cash reserves remain solid.
Gentoo Media: the gaming affiliate released a Q425 trading update showing revenue of €25.5m, adj. EBITDA of €14.9m and operating cash flow of €10.4m, bringing FY25 to €98.6m revenue and €41.4m EBITDA. January trading is in line with expectations. The company provided preliminary FY26 guidance of €105m-€115m revenue and €49m-€54m of adj. EBITDA. A full report is due February 24.
Puts+Takes
Las Vegas Sands
Mac attack: LVS’ Q4 print crystallized a now familiar bifurcation: Singapore is compounding into something structurally bigger than consensus ever modeled, while Macau continues to test investors’ patience on margins, mix and near-term visibility.
Stifel argued the quarter would do little to calm investor unease around Macau, with hold-adjusted EBITDA margins down roughly 300bps YoY and little immediate evidence of relief from base mass.
Such are the worries that, as mentioned above, the shares fell nearly 10% in post-close trading as investors digested the news.
Shadow play: Singapore, in Stifel’s words, continues to be “overshadowed” despite generating what increasingly looks like a $3bn-plus EBITDA trajectory, which was picked up on by CBRE who framed the quarter as another example of Singapore overwhelming the group narrative.
CBRE acknowledged Macau margins remain under pressure, driven by VIP mix and elevated promotional reinvestment, but the team were more relaxed about the medium-term outlook.
Seaport went further still in dismissing any post-earnings sell-off, framing the quarter as definitive proof that MBS is now the most profitable casino asset globally.
Macau’s current margin compression is treated as cyclical noise rather than a structural impairment.
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Connections
Octoplay’s games are now live in Michigan via BetMGM FanDuel, Fanatics and Rush Street Interactive. Michigan is Octoplay’s second US state following its launch in New Jersey last June. Alternative sports event X Games has announced a global partnership with Stake. The agreement names the operator as the exclusive online casino and sports-betting partner of the X Games League, a new season format. Circa Sports has been named as the official sports-betting partner of the MLB’s Kansas City Royals.
Adjacencies – social casino
Mad and bad: A review of the social casino sector from Jefferies continued to characterize the market as structurally challenged, but highlighted why Aristocrat Leisure remains relatively well positioned through its Product Madness division.
While top-line conditions remain difficult, Aristocrat is consolidating market share and increasingly offsetting revenue pressure through direct-to-consumer (DTC) monetization.
Jefferies viewed it as the primary driver of earnings growth in the segment.
Industry data from EKG showed that Q425 global social casino revenue declined 4.4% YoY and 0.7% QoQ to $1.68bn, meaning FY25 revenue was down 4.8% YoY to $6.81bn.
Notably, Macquarie pointed out that Q4 represented the least severe decline of the year, potentially signaling early signs of stabilization.
Lording it: Larger operators continued to outperform, with the top 15 publishers –representing roughly 89% of the market – down 4.1% YoY versus a 6.9% YoY decline for the rest of the market, reinforcing the importance of scale and portfolio depth.
Within this context, Aristocrat gained 50 basis points of market share in Q425, lifting total share to 16.2% from 15% a year earlier.
Its Product Madness unit delivered 4.8% revenue growth in the quarter, materially outperforming the broader market decline.
Jefferies attributed this resilience to the durability of Aristocrat’s core franchises, including Lightning Link, Cashman Casino and Heart of Vegas, alongside a more focused portfolio following the completed divestment of Big Fish Games.
DTC momentum remained the central strategic theme. Despite declining platform revenues on iOS and Android, overall DTC revenues grew 5.4% YoY in Q425.
Aristocrat significantly outperformed, with Jefferies estimating Product Madness DTC revenue growth of 77.4% YoY.
Over the longer term, Jefferies forecasts DTC revenues growing at a 1.5% CAGR over five years, compared with a 3.8% CAGR decline for platform revenues, supporting margin expansion even in a low-growth environment.
Brush strokes: Both Jefferies and Macquarie emphasized that sweepstakes gaming continues to be a major headwind, drawing players away from traditional social casino products while inflating marketing costs.
However, Macquarie highlighted an emerging regulatory shift, with cease-and-desist actions increasingly being accompanied by explicit anti-sweepstakes legislation at the state level.
While any immediate benefit to social casino operators remains difficult to quantify, the closure of large states such as New York and California to sweepstakes, alongside similar measures elsewhere, could create a more supportive competitive backdrop over time.
Place setting: Looking ahead, Macquarie believes any upside will be gradual, as operators must re-acquire displaced players.
Nevertheless, combined with early signs of market stabilization and continued share consolidation among scaled publishers, this evolving regulatory environment could provide a more constructive setup for social casino growth in 2026.
Jefferies concluded that, while revenue growth remains elusive, Aristocrat’s scale, franchise strength and accelerating DTC penetration position it to continue outperforming peers through margin-led earnings growth in a structurally challenged market.
Venture capital firm Yolo Investments manages in excess of €500m in capital across 100 exciting fintech, gaming and blockchain companies. The Yolo Investments’ Gaming fund, regulated by the Guernsey Financial Services Commission, has taken positions in fast-growth suppliers and operators, including Dabble and Enteractive. Yolo Investments (yolo.io) wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat about innovative products which can plug into our investment ecosystem.
Upcoming earnings
Feb 4: BetMGM
Feb 5: Evolution, Betsson, Boyd Gaming
Feb 10: Red Rock Resorts, Robinhood
Feb 11: MGM Resorts
Feb 12: Wynn Resorts, DraftKings (earnings)
Feb 13: DraftKings (call)
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Brillinat breakdown of the fracture between racing and operators. The tax disparity really does put bookies in an impossible spot where even historic sponsorships bccome expendable. Saw something similar play out regionally with horseracing venues losing parterships and it spiraled fast.