GVC signals strategic shift with corporate rebrand to Entain PLC

GVC Holdings has rebranded to Entain PLC amid a strategic pivot at the FTSE 100 operator under chief executive Shay Segev.

GVC said the rebrand, which is still subject to shareholder approval, is necessary to reflect changes in the business and in the wider industry, as the operator prepares to prioritise long-term sustainability over short-term gains.

The rebrand will come into force from 10 December if cleared by shareholders, EGR understands.

“This new identity will represent a new chapter for the group under a re-energised management team and reflects our ambition to be the world leader in sports betting and gaming entertainment,” GVC said in a statement.

As part of the shift, GVC has committed to generating 100% of group revenue from nationally regulated markets by the end of 2023, and 99% by the end of 2020.

At present, 96% of GVC revenue comes from nationally regulated markets or those which are in the process of regulating.

GVC is intending to work with legislators in the remaining 1% of unregulated markets in which it is present by the end of 2020 and has committed to exiting those markets should regulation appear unlikely by 2023.

The London-listed operator flagged a potential £40m hit to 2021 EBITDA as a result of the strategy, although the operator is widely expected to report earnings £50m ahead of guidance next year.

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“We are not looking to maximise our profitability in the short term, but build a proper industry in the long term and that means making some sacrifices,” Segev told the Financial Times in his first full interview as CEO.

This pledge forms part of a five-pronged sustainability charter which also includes responsible gambling objectives, making RG a part of remuneration, pursuing high standards in corporate governance and investing in local communities.

In addition to this, the operator has confirmed the launch of the Advanced Responsibility and Care programme (ARC), which will use proprietary technology to enhance player protection through additional checks and improved monitoring.

To support this focus on player protection, GVC will introduce a responsible gambling metric into its annual group wide staff bonus conditions from 2021.

A new Entain foundation will also be launched, committing to donate £100m over the next five years to its Pitching In campaign, which was launched in September.

GVC CEO Shay Segev

GVC has further confirmed four strategic objectives for growth over the next three to five years. These include becoming a market leader in the US market via its BetMGM brand and continued growth in core markets.

Entering new markets through organic growth and via M&A forms the third strategic objective, while a focus on reaching new audiences rounds out the list of goals.

In particular, GVC highlighted esports and digital gaming as being of “significant potential” for the business going forward.

“Today marks an exciting new chapter for the group, and an important step forward in achieving our ambition of being the world leader in sports betting and gaming,” Segev said.

“Under our new corporate identity, we will continue to use our unique technology platform to build on the exceptionally strong momentum that we have in our existing markets, grow into new markets, reach new audiences, enhance the customer experience and provide industry-leading levels of player protection,” he added.

In wake of the news, Peel Hunt analyst Ivor Jones reiterated his Buy rating for firm and said: “GVC is breaking with the past by changing its name, exiting remaining grey markets and focusing even more on responsible gambling, while committing to donate £100m over five years to community projects.

“Online trading is strong, with these upgrades partially offset by the investments in sustainability,” he added.

GVC recorded a 28% rise in total online net gaming revenue for Q3 2020.