Ladbrokes owner considers returning £102m of furlough cash
The chief executive of Ladbrokes-owner Entain has said she is considering returning £102m of furlough money to taxpayers, amid sustained regulatory pressure on the gambling industry.
In her first profile interview since taking over at the helm last year and becoming one of only eight female FTSE 100 bosses, Jette Nygaard-Andersen defended retaining the money.
She said: “The virus is still here. And as it is, although improving, it’s still far from certain how this will play out.”
The cash had allowed the bookmaker to keep its 14,000 staff on full pay, Ms Nygaard-Andersen said.
However, she added: “The board is keeping, and will continue to keep, the situation under review, but it’s just too early.”
This meant it could be returned in months to come: “When I say ‘keeping it under review’, that’s exactly what I mean.”
With the Government expected to set out its plans for a crackdown on betting laws - the biggest in a generation - this spring, Ms Nygaard-Andersen, 52, urged ministers to strike a “healthy balance” to avoid driving gambling underground.
“It is somewhat unfair, the reputation that our industry has,” she said.
Britain’s gambling industry is under pressure at home while attempting to seize the opportunities opened up by an easing of gambling restrictions on sports betting in the US.
Through its joint venture with MGM Resorts, Entain has prospered in America, but lags blue-chip rival Flutter Entertainment - the market leader for sports betting.
Ms Nygaard-Andersen said she “knows what it takes to win” and was confident that Entain could topple Flutter. “The operator with the best products for the customers will also be number one in the market,” she said.
Entain has pledged its commitment to the UK after selecting London for a £100m “innovation lab”. The project will develop software alongside other technology companies for interactive gaming. Entain will inject £40m into the base.
Interview: Knowing what it takes to win at the bookmakers
If anyone was going to catch coronavirus, you would think it would be Jette Nygaard-Andersen. “I’m on the road every week; I’m on a new flight,” she says. “But I have managed to stay Covid-free throughout the pandemic. It is quite impressive.”
Nygaard-Andersen, 52, has just returned home to her native Copenhagen, where she will spend the weekend before heading off to Los Angeles.
As chief executive of Entain, the FTSE 100 group best known this side of the Atlantic for owning Ladbrokes, Coral and Gala Bingo, the Dane is far from the stereotypical image of a gambling boss. And she insists Entain is no longer a bookmaker: “We’re an entertainment company”.
Her desire to distance the company from its past is understandable. Previously called GVC, former boss Kenny Alexander ventured into so-called “grey” gambling markets such as Turkey, where betting is largely illegal.
After two decades in a variety of roles at Swedish media titan MTG, Nygaard-Andersen joined the company’s board as a non-executive in 2019 to spearhead Entain’s “sustainability” strategy. “This was where we set out on a new journey,” she says.
Her remit was to advise the company on how to retrench from more questionable jurisdictions and broaden the business across “interactive entertainment”. By mid-2020, Alexander had made way for Shay Segev.
After just six months at the helm, billionaire Sir Leonard Blavatnik prised Segev away from Entain with the promise of a payday worth tens of millions of pounds if he could make his dream of turning streaming service DAZN into the “Netflix of sports”.
Before she knew it, Nygaard- Andersen was being offered the top job. “I got a call from Barry [Gibson], our chairman. I was in no doubt that this wasafantastic opportunity.”
Nygaard-Andersen says she spent the first half of 2021 “listening” to her 24,000-strong workforce. But she could be forgiven for being distracted.
Segev’s sudden departure came as Las Vegas casino operator MGM Resorts made an £8.1bn takeover bid for Entain. Within days the offer was dropped, though investors were convinced this was far from the end of their interest.
America is the gambling sector’s biggest prize. A decades-long ban on sports betting, which in effect outlawed gambling everywhere apart from Nevada, was repealed in 2018. As gambling is legalised on a state-by-state basis, experts estimate the US sports betting sector could be worth nearly $180bn (£133bn) by 2028, making it the world’s largest regulated market.
Like many rivals, Entain saw the opportunity and joined forces with US casino MGM Resorts in 2018, the very company that tried to swallow it a year ago. Known as BetMGM, the New Jersey-based joint venture has fared well. It is America’s most popular website for iGaming, online games including bingo, and the second- biggest for sports betting.
New York-based FanDuel, a brand owned by fellow blue-chip bookmaker Flutter Entertainment, sits in first place for sports betting with around 40pc of the market.
While Alexander previously claimed combining with MGM would be a failure if it was not an outright market leader in the years to come, Nygaard- Andersen insists there is still time for that to become reality.
“We’ve built a business from scratch,” she says. “Our two main competitors there, they actually have a head start. FanDuel and DraftKings launched their fantasy business [around] 2012. They were already in the market five, six years before we came in.”
Nygaard-Andersen says she “knows what it takes to win”, arguing that “the company or the operator with the best products for the customers will also be number one in the market.”
More distraction came last September with another takeover attempt. DraftKings, still loss-making, offered £28 a share. The swoop, preliminary in the form of DraftKings stock, valued Entain at £16bn.
Talks collapsed within a month and the American giant walked away. Nygaard-Andersen is tight-lipped on how the DraftKings approach manifested. “I am not going to go into any details on that,” she says. “We are a popular company, I recognise that. As I said, it’s been a busy year.”
Having knocked back two takeover attempts, American gambling sources say it is most likely Entain’s US exit strategy will be to float their joint venture. Although the combination may use the MGM name in the States, Nygaard- Andersen is keen to emphasise it would struggle to operate without Entain’s expertise.
“Remember, BetMGM is really powered by Entain. BetMGM runs on the Entain technology, I think almost 40pc of people associated with running BetMGM, they’re actually Entain people,” she says. “How is it going to look in the future? I am not going to speculate on that.”
Still, the UK market remains a crucial cash cow for Entain – not least from the 2,754 shops it has at home.
Although bricks-and-mortar trading has been difficult during the pandemic, many punters have moved online. In its latest results, Entain unveiled its 22nd quarter of double-digit online growth.
It was able to top up its coffers by claiming £102m from UK taxpayers under the Government’s job retention scheme. Unlike rivals such as William Hill, it has not repaid the money. “The furlough schemes were put in place for a reason. The reason was a pandemic – which, by the way, we are still in the midst of,” she says.
“During the pandemic and the lockdown, we’ve been able to support our colleagues and pay them 100pc of their pay.”
“It’s still far from certain how this will play out. So that’s, that’s really how we view it and the board is keeping,
and will continue to keep, the situation under review, but it’s just too early.”
Does this mean the money could be returned in months to come? “When I say keeping it under review, that’s
exactly what I mean,” she says.
Gambling laws are set for an overhaul in the UK, with many MPs keen to crack down on the sector by reducing maximum wagers and introducing affordability checks.
Gambling minister Chris Philp last week told the Commons he was aware of “extremely troubling practices” in
the industry. A White Paper on the Government’s reforms is now expected in March, having been delayed from last year.
“It is somewhat unfair, the reputation that our industry has,” argues Nygaard-Andersen. “It is utterly important for me that our customers understand that we have their safety at heart, and that they see us as a trusted entertainment provider.”
Nygaard-Andersen says there needs to be “a healthy balance”. A lack of proportionality and too stringent reforms will force gamblers underground, to the unregulated “black market”.
As a woman leading a global gambling company, Nygaard-Andersen is aware she is a rare breed and it is another area she thinks needs more change. Similarly, she is one of just eight women in charge of a FTSE 100 company.
Gender-based boardroom quotas, such as those introduced in Germany last year, are not the answer to even out these statistics, she says. “Progress has been very slow, especially in getting more women into the absolute top positions. These things are rather sad.
“If we want to change things, for the long term, we need to start at a very young age, we need to start with the young girls –and, by the way, young boys. That is where you can create the sense: ‘I can be whatever I want to be.’ “I would wish that we got to a point where it doesn’t matter what gender I have as a CEO. Ideally, we should talk about leaders, and not female leaders.”
CV
Age: 52
Education: MBA/Finance from Copenhagen University; Colombia University, USA and Insead, France
Family: Married
First job: Worked at Egmont/ Nordisk Film Studios at university, learning “everything I could” about the movie and entertainment industry
