Annual Report 2021
It’s
your
game
We are Entain.
A world leader in sports
betting, gaming and
interactive entertainment
with a clear strategy to
deliver sustainability
and growth. Our purpose
is to bring moments
of excitement into our
customers’ lives.
It’s our game,
it’s their game...
Start here
Overview
02 We are Entain
Strategic report
06
10
20
22
24
32
34
36
40
44
54
57
64
66
72
78
79
81
86
Chairman’s introduction
Chief Executive’s Review
Our strategic framework
How we create value
Strategy in action
The industry in which we operate
Regulatory Update
Engaging with stakeholders
Sustainability
Safer betting and gaming
Covid-19
Investing in people
and communities
TCFD Statement
Business Review
Chief Financial Officer’s Review
Chief Governance Officer’s Review
Risk management
Principal Risks
Viability Statement
Governance
88
91
95
103
109
112
116
141
Board of Directors
Chief Governance Officer’s Report
Governance framework
Report of the Audit Committee
Report of the ESG Committee
Nomination Committee Report
Directors’ Remuneration Report
Directors’ Report
Financial statements
144
152
153
154
155
156
157
204
205
206
207
212
213
213
Independent Auditor’s Report
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement of
changes in equity
Consolidated statement of
cash flows
Notes to the consolidated
financial statements
Company income statement
Company balance sheet
Company statement of changes
in equity
Notes to the Company
financial statements
Glossary
Shareholder information
Corporate information
Explore more in our
online annual report:
www.entaingroup.com/
2021annualreport
1
...it’s
your game.
Read more about our best entertainment:
pages 24 to 25
Read more about our
new experiences:
pages 26 to 27
Read more about our
support for customers:
pages 28 to 29
Read more about
doing the right thing:
pages 30 to 31
www.entaingroup.com/
2021annualreport
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 2
We are Entain
At Entain, everything we do is aimed at delivering the
very best in betting, gaming and interactive entertainment.
We are one of the world’s largest sports betting, gaming and
interactive entertainment groups, operating in the online and retail
sectors. As the worlds of betting, gaming media and technology
converge, we are uniquely placed to give our customers what they
want. Through our proprietary cutting edge technology platform,
we provide safe and exciting gaming experiences, to millions of
customers, via many iconic brands.
Where we’re heading
Our purpose is clear – bring moments of excitement into our
customers’ lives. A technology company to our core, we are
uniquely positioned amongst our peers to innovate for customers,
enabling us to grow in regulated markets both old and new,
while ensuring the highest levels of player protection.
Continued success
Our market-leading platform enables us to deliver robust,
sustainable and diversified growth. In 2021 we once again
performed strongly in all of our major markets. BetMGM, our hugely
exciting business in the US, which is now the second largest in the
market, was a particular highlight.
In addition to growing in our traditional areas of strength, we have
broadened our horizons, investing in new areas of interactive
entertainment such as esports and virtual reality (“VR”) while
providing a broader and richer experience for our customers.
Equally important to our growth story is our focus on sustainability.
We believe that the most sustainable business in our sector will be
the most successful. That is why we continue to lead the way in the
critically important area of player protection, via our technology-
based Advanced Responsibility and Care™ (“ARC™”) programme,
and why we are investing in programmes to encourage diversity
through technology and support grass roots sport.
Entain plc | Annual Report 2021 Overview 3
Operational highlights
Fulfil our core strategic objectives to
deliver growth and sustainability.
Now live in 21 US jurisdictions, our BetMGM
joint venture is the second largest in the US
and the clear leader in iGaming..
Strong growth across the Group with
market share gains in all major markets.
Full year online net gaming revenue up 13%
in constant currency and total net gaming
revenue +8% in constant currency.
Launch of Ennovate, our new innovation
hub with £100m investment to develop
and showcase disruptive technologies
and first consumer products for the sports
and entertainment metaverse.
Roll-out ARC™, our technology led safer
gaming programme with real-time customer
interaction tools.
Through our Entain Foundation, invest in
socially positive programmes to support
grassroots sports and increase diversity
in the field of technology.
Financial highlights1
Group Revenue
£3.9bn
+8% (constant currency)
2020: £3.6bn
BetMGM Net Gaming Revenue
$850m
+378%
2020: $178m
Profit After Tax
£275.6m
+142%
2020: £113.8m
Diluted EPS
53.8p
-14%
2020: 62.8p
Online Net Gaming Revenue
£3.1bn
+13% (constant currency)
2020: £2.7bn
Group Underlying EBITDA
£881.7m
+5%
2020: £843m
Net Debt
£2.1bn (2.4x)
2020: £1.8bn (2.1x)
Adjusted Diluted EPS (excluding US JV)
81.1p
+11%
2020: 73.1p
1. From continuing operations.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
4
We are Entain continued
Our commitments
We have long held the view that the most sustainable
business will be the most successful business in our industry.
We aim to meet the highest standards in everything we do,
from the way we run our business to the way we support our
colleagues, our customers and our communities.
Our sustainability
commitments
An exclusive focus on regulated markets
– we have committed that by the end of
2023 we will only operate in domestically
regulated markets. We now generate
nearly 100% of our NGR from regulated
markets, more than any other major
global operator.
Lead on safer betting and gaming –
provide our customers with the safest
and most trusted environment to play.
Our culture commitments
Five values guide every decision we
make and action we take. They are vital
to our culture.
Why? Well that’s simple…because they
map out how we do things. They’re at the
heart of how we work together, serve our
customers and even celebrate success.
At Entain we strive to:
Excite our customers.
Drive innovation.
Pursue the highest levels of corporate
Do what is right.
Customer commitments
Customers are the focus of
everything we do.
Our purpose is to provide them with
moments of excitement.
We will offer them exciting and trusted
entertainment products and services.
Listen to and respond to customer needs.
Using our technology platform, we will
continuously innovate to introduce new
products and create a personalised
experience for each of our customers.
governance with rigorous processes and
oversight through a diverse Board.
Invest in people and communities
– we want Entain to be recognised as the
best place to work in the industry as well
as ensure we make a positive impact on
the communities and markets in which
we are based and operate.
Win together.
Be bold.
Entain plc | Annual Report 2021 Overview 5
> 100 Licences across 31 regulated
Offices worldwide
territories
100+
20+
Employees & contractors
c.25,000
Leading brands
Currencies accepted
Languages offered
24
42
33
1
78.8%
20.3%
0.8%
Our divisions
2021 NGR Split
3
2
1. Online
2. Retail
3. Other
2021 EBITDA Split1
2
3
1
1. Online
2. Retail
3. Other
92.5%
6.9%
0.6%
1. New Opportunities and Corporate
are excluded as they are negative.
Market position
Online
Online sports wagers
£14.2bn
+20% (+22%cc)
2020: £11.8bn
Retail
4,300+ global outlets
Retail sports wagers (like-for-like)
£2.3bn
-10% (-9%cc)
2020: £2.6bn
UK
#1
Belgium
#1
Italy
#3
Ireland
#3
UK
#2
US
#2
Italy
#1
Germany
#2
Australia
#3
Brazil
#1
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 6
Strategic report
Chairman’s introduction
Entain has now
delivered nine years of
double-digit growth in
our online business.”
J M Barry Gibson
Chairman
Entain plc | Annual Report 2021
Overview | Strategic report | Governance | Financial statements
7
2021 has been an extraordinarily successful
and eventful year for Entain, albeit one in which
we continued to contend with the significant
challenges of operating against the backdrop
of the Covid-19 pandemic. In successfully doing
so, we proved beyond doubt the resilience of
our business model as well as our ability to take
advantages of growth opportunities in the most
challenging of circumstances.
It is the strength and viability of this
platform which is behind our conviction
that, as we announced in August, our total
addressable market will grow more than
three-fold to $160bn. There are vast growth
opportunities ahead of us, which we intend
to capture by: achieving leadership in the
US market; growing our presence in core
markets; expanding into new regulated
markets; and extending into new interactive
entertainment experiences.
As a result, it was no surprise that Entain
attracted interest from other industry
players during the year. We strongly felt
that the proposals that we received from
MGM Resorts in January and DraftKings in
September both substantially undervalued
the Company and its prospects. But their
interest was a great endorsement of the
attractiveness of our strategy, operations,
technology, and people. In the case of
MGM Resorts, our relationship through our
BetMGM joint venture in the US continues to
go from strength to strength.
If 2020 was the year in which Entain
redefined its strategy and articulated its
ambition to be the world-leader in sports
betting and gaming entertainment, then
2021 has been the year in which we
emphatically delivered on the first stage of
that journey.
Entain has now delivered nine years of
double-digit growth in our online business,
so we feel confident in asserting our strong
belief that this is a business that is capable
of delivering sustainable and meaningful
long-term returns for all of its stakeholders.
This confidence is underpinned by our
powerful, unique and market-leading
platform, which encompasses everything
from our outstanding proprietary
technology to our capabilities in digital
marketing, customer interaction, regulatory
engagement, and M&A. And, of course, the
foundation on which the Entain platform is
built – and which connects it directly to our
customers – is the industry-leading talent
that we have across the business. On this
front, we are working hard to continue to
attract and retain the very best people at
all levels at Entain and we know that, as a
world-leader in technology, we need to be
able to compete with the global tech giants
in order to do so.
Read more about our Board:
pages 89 to 90
Entain plc | Annual Report 2021
8
Chairman’s introduction continued
ESG at the heart of Entain
2021 was also a year in which we
cemented our commitment to putting ESG
at the heart of everything that we do.
We are clear that this approach will make
us an even more successful business for
the future, and we want to take a lead on
the issues that matter most to us including
sustainability, diversity, and responsibility.
As part of this, our goal is to provide the
most trusted environment for betting and
gaming in the world, so that our customers
know that they can have a fantastic
experience with us and that we have their
interests at heart. This philosophy has been
the driving force behind the development
of our Advanced Responsibility and
Care™ (“ARC™”) programme, which has
made great strides during the year and is
redefining the critically important area of
player protection.
As a further demonstration of the fact
that safer gambling sits at the core of
our strategy, we have incorporated a
safer gambling metric into remuneration.
Colleagues are now assessed against
whether certain milestones have been
achieved in implementing our ARC™
programme, as part of the conditions of
their annual bonus. We will be adding to
this further in 2022, with an additional
portion of the Group annual bonus being
based on ‘customer centricity’.
Read more about remuneration
metrics: page 126
Financial performance
I’m pleased to be able to reflect on another
set of strong results, delivered whilst both
the business and our customers continue to
face the challenges presented by Covid-19.
This performance is a tribute to the quality
of our people and resilience of our business
model due to its diversification across
product, brand, territory and channel.
Group net gaming revenue (“NGR”) was
up by 8%cc for the full year, while our
online NGR was ahead by 13%cc, the ninth
consecutive year that we have delivered
double-digit growth online. With all key
markets in growth, with the exception of
Germany and the Netherlands, which were
subject to regulatory changes – our online
business continues to go from strength-
to-strength. The performance of our US
joint venture, BetMGM, was particularly
pleasing, securing our leading position with
a 23% share of the the states we were
active in during the fourth quarter of 2021.
This is an outstanding achievement, in line
with our target to secure 20-25% of the US
market and we look forward to building on
this position as further states regulate in
2022. Overall this performance enabled us
to deliver £881.7m of underlying EBITDA,
a 5% increase on the year, and gives us
confidence that our strategy of growth and
sustainability remains on course.
Entain plc | Annual Report 2021 Strategic report We recognise the value of having an
inclusive and diverse Board and following
Sandeep’s decision we will not meet
shareholder expectations and our own
Board Diversity Policy with respect to
membership of a Director from an ethnic
minority background. The Nomination
Committee is undertaking an active search
to find an appropriate candidate.
Rewarding our outstanding
global team
As ever, the hard work, dedication and
innovation of our teams across the
globe has been awe-inspiring to see,
and on behalf of the Board I would
like to thank all of our colleagues for
another year of outstanding commitment
and outperformance.
In recognition of their extraordinary
contribution, we were delighted to
launch a Group-wide employee share
ownership plan in April to give our UK and
international colleagues the opportunity
to share in the success and growth of
the business.
A clear commitment to robust
corporate governance
Our outstanding CEO, Jette Nygaard-
Andersen, has now been in the role for
over a year and, as we had hoped, her
background in fast-growing disruptive next
generation digital entertainment companies
has added fresh perspective and impetus to
Entain’s strategic direction. On behalf of the
Board, I would like to congratulate Jette on
a hugely successful first year in charge.
After the significant changes of 2020, this
has been a year of consolidation for the
Board, although we were delighted to be
joined by Mark Gregory as an independent
Non-Executive Director in March. Mark is
now Chair of the Remuneration Committee
and a member of the Audit and Nomination
Committees. He has more than 35 years’
experience in a wide variety of senior
leadership roles across both the financial
services and retail sectors.
Last year we announced that Sandeep Tiku
would be joining the Board as an Executive
Director following his relocation to Gibraltar.
Following ill health due to Covid-19,
Sandeep’s relocation was delayed and he
has notified the Company that he no longer
intends to relocate to Gibraltar and will
therefore not join the Board.
Read more about our strategy:
pages 20 to 21
9
Looking ahead: 2022 and beyond
As we look ahead to the coming year,
the UK Government’s review of the 2005
Gambling Act will be a key milestone
for our industry. We are in full support
of the review, and have been engaging
openly, proactively and transparently
with all aspects of the process. We are
hopeful that it will be a step towards
creating the highest possible regulatory
standards, and that any revised legislation
is not draconian; we have seen in other
markets that imposing arbitrarily low and
disproportionate blanket thresholds will
have the unintended consequence of driving
customers to the black market, where the
small minority of players who are at risk
of harm will have none of the protection
offered by established, regulated operators.
When we think about the future more
broadly, it is clear that the worlds of
media, entertainment, technology and
gaming are rapidly coming together, and
that Entain sits at the very heart of that
convergence. This provides us with a great
opportunity to redefine our industry, and
also to meet the changing demands of
customers who now want a richer and more
engaging experience, with more content,
social interaction, analytics, data, and live
statistics. In simple terms, we are now able
to use our outstandingly strong platform to
give our customers even more reasons to
engage with and stay with us. As a result,
we are more excited than ever before about
the exciting opportunities ahead of us that
will drive Entain’s growth for many years
to come.
J M Barry Gibson
Chairman
3 March 2022
Our goal is to provide the
most trusted environment
for betting and gaming in
the world.”
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 10
Strategic report
Chief Executive’s Review
Entain is a consumer-focused
growth business, and we continue
to make progress on our ambition
as a global leader in betting, gaming
and interactive entertainment.”
Jette Nygaard-Andersen
Chief Executive Officer
A global leader for our industry
Entain is a consumer-focused growth business
delivering profitable and sustainable returns for our
stakeholders. We continue to make progress on our
ambition as a global leader in betting, gaming and
interactive entertainment.
Entain plc | Annual Report 2021
Overview | Strategic report | Governance | Financial statements
Overview | Strategic report | Governance | Financial statements
11
Having substantially increased our online
revenues year-on-year for the last nine
years and grown at a compound annual
rate of 20%cc over the last two years, we
are clearly a business delivering growth.
Our customer base has 25% more actives
than in 2020. Our operations now span 31
regulated or regulating territories and we
have established leading positions in each
of our key markets. We also have further
significant growth opportunities ahead of us
with our addressable markets set to grow
to more than $160bn over the medium term
– providing us with the opportunity to treble
the size of our business. Entain is a business
with growth built into our model, driven by
our industry leading platform comprising our
unique technology, people and capabilities.
It is this platform that enables us to deliver
an ever-better customer experience, evolve
into emerging customer trends and grow into
new markets and products. We continue to
evolve as a business and position ourselves
as a leader in our industry across growth,
innovation, capabilities, player protection
and customer centricity.
By expanding content, products and
experiences to broaden our customer
appeal, creating moments of excitement
across betting, gaming and interactive
entertainment, we are rapidly laying the
foundations to drive customer centric
growth into new markets and products.
This will further broaden our customer base,
increase loyalty, drive greater diversification
in our revenue streams and reduce
acquisition costs.
We have established ourselves at the
forefront of sustainability in our industry
with recognition across a number of indices
as well as earning numerous awards.
Importantly we are delivering ground-
breaking improvements in player protection
through our Advanced Responsibility and
Care™ programme (“ARC™”).
We delivered a strong performance in 2021
with Group NGR up +8%cc (up +15%cc
including our 50% share of BetMGM)
and EBITDA up +5%. Online NGR was
up +13%cc with signs of the new normal
emerging during the final quarter.
We have made great progress in 2021 and
I am delighted all my colleagues hard work
has been recognised externally, especially in
being awarded Operator of the year by EGR
and being recognised as one of the most
admired companies in 2021 by Management
Today. These great achievements are
testament to the high quality and talented
team we have at Entain. I would like to
thank each and everyone of them for the
dedication and the commitment they have
demonstrated throughout the year.
Entain plc | Annual Report 2021
12
Chief Executive’s Review continued
We have a clear strategy that levers this platform to deliver on our
core pillars of growth and sustainability. Our ambition is to be the
world’s leading betting, gaming and entertainment company with our
customers at the core of everything we do. It is through this strategy
that we will continue to drive significant value for our stakeholders.
Customer centric Entain platform
Our Entain platform distinguishes us from competitors, powering our growth, supporting
our customer centric focus and driving value creation. It comprises our unique in-house
technology, our industry leading talent and our customer focused capabilities. It enables
us to act differently, be flexible and agile and deliver on being a responsible entertainment
company whilst also driving significant competitive advantages in five key strategic areas:
Customer centric continuous
Player protection and Advanced
Driving efficiencies – maximising
improvement – customer centricity
is the backbone of our growth across
the Group. Ensuring our customers’
experience is engaging, exciting,
relevant and always improving means
a continuous refreshment and evolution
of our content, our offering and the way
we support our customers. By focusing
on what makes a better customer
experience and creating those little
moments of excitement, we have
grown our active base 25% in 2021
and improved customer loyalty.
Driving growth – with flexibility, agility
and scalability built in, we are able to
expand internationally, integrate new
acquisitions, support growth in existing
markets, including the US, understand
and evolve into changing customer
behaviours and grow into new products
as demonstrated by our successful M&A
and integration delivery to date.
Responsibility and Care™ – ARC™ is
Entain’s industry-leading approach to
customer protection. It is a proactive
player programme that navigates each
customer journey in real-time, using
advanced analytics to monitor markers
of protection and behavioural triggers to
identify risks specific to that customer.
Early trials have delivered encouraging
results, with a 30% overall reduction in
customers increasing their risk levels,
and we are now starting to roll out the
programme internationally.
Innovation engine – continuous
product evolution keeps the customer
experience fresh and engaging. With the
launch of Ennovate, our innovation
hub in London, supported by a £100m
investment, we are exploring new
technologies. These include AI and
both virtual and augmented reality to
create new moments of excitement for
our customers.
cost and revenue synergies from both
acquisitions and efficiencies across the
Group. Operating our own platform
enables us to operate at a lower cost
than our competitors. Having launched
our Evolve programme in 2021, we are on
track to deliver £100m of efficiencies over
three years.
As Entain continues to grow, we are
evolving our operational structures,
processes and capabilities around the
Entain Platform. This will enable us to drive
an even better customer experience and
ensure that we are able to deliver on the
significant growth opportunities open to us
as a leading global sports betting, gaming
and interactive entertainment company.
We have a clear strategy that levers our
platform to deliver on our core pillars of
growth and sustainability. Our ambition
is to be the world’s leading betting,
gaming and interactive entertainment
company with our customers at the core of
everything we do. It is through this strategy
that we will continue to drive significant
value for our stakeholders.
Read more about how we create
value: pages 22-23
Entain plc | Annual Report 2021 Strategic report 13
Growth
Entain is a growth business. We have grown Online revenues at a
compound annual growth rate of 20%cc over the last two years.
We operate in 31 regulated territories across betting and gaming and
we have ambitious plans to expand into new markets and new products
as we lean into interactive entertainment opportunities.
Our growth strategy has four pillars that
will enable us to continue to drive the
Group’s performance and increase our
scale. These include delivering on our clear
ambition to be the leading operator in the
US through BetMGM, growing in our core
markets, entering new regulated markets
– both organically and via M&A – and
expanding to reach new audiences.
Leadership in North America
BetMGM is firmly established as a leading
operator in the US market built on the
strength of the technology and capabilities
of the Entain platform as well as the brand
strength of our joint venture partner, MGM
Resorts International. The North American
market is expected to be worth around
$32bn over the long term. Throughout
2021, BetMGM has gone from
strength-to- strength and, in the three
months to December 2021, delivered a
market share across sports betting and
iGaming of 23% in the markets in which
it operated. This is in line with our long-
term objective of 20% to 25%, and while
that secured BetMGM as the number two
operator, we are ready to challenge for the
number one position in these markets.
BetMGM continues to lead in iGaming with
a 29% market share in Q4, and in Sports
betting BetMGM further built its position
across its markets with an 18% share
in Q4. The unique range of bespoke and
exclusive products provided through the
Entain platform differentiate BetMGM’s
offer, provide a competitive advantage
and supports growth with over 70% of
BetMGM customers engaging with these
exclusive products.
During the year BetMGM went live in nine
markets. In the first two months of 2022 we
added a further four jurisdictions taking the
total to 21. BetMGM is live with 11 retail,
15 online sports betting and four iGaming
markets, reaching approximately 37%
of the US adult population. In addition, it
has launched its horse racing product in
three further markets leveraging our global
expertise in this category. With Ontario
opening up to regulation, we look forward
to taking the BetMGM brand into that
market as well as launching in Illinois during
the first half.
In 2021, we launched our first national
advertising campaign featuring Jamie
Foxx which resonated strongly with
customers as a differentiated approach in
the emergent betting and gaming market.
This was followed by a further campaign
and a refreshed advert ahead of the 2022
NFL Superbowl.
BetMGM benefits from the powerful
Entain platform that provides best in class
digital marketing tools, deep database
analytics and bespoke in-house products.
BetMGM also benefits from MGM Resorts
omni-channel presence and loyalty
programme with around 14% of new
sign-ups having a pre-existing relationship
through one of these channels. During the
year we leveraged Entain’s global leadership
in bingo and horse racing to launch several
ground-breaking products such as Borgata
Bingo in New Jersey and a horse racing app
in three states where we did not have pre-
existing operations.
As a result, BetMGM has grown its
leadership position rapidly while maintaining
financial discipline. Same state revenues
were up around 140% year-on-year and
overall revenues were up nearly five times to
$850m in the full year. Costs per acquisition
were in line with forecasts which reaffirms
our expectation of achieving a long-term
cost per acquisition of $250. We are already
achieving positive contribution in several
markets, some within 12 months of opening.
We anticipate that we will deliver revenues
of over $1.3bn in 2022 and reach positive
EBITDA in 2023.
In summary, BetMGM is firmly on track
to realising its ambition of being a leader
in the US sports-betting and iGaming
market and expects to achieve a 20-25%
market share.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 14
Chief Executive’s Review continued
Grow core markets
Our operations now span 31 regulated
or regulating territories and we have
established leading positions in each of our
key markets. Our combination of customer
focus, strong brands, great products and
digital marketing expertise has enabled us
to grow across all our major online markets.
Our current markets are expected to grow
by a compound annual growth rate of over
8% and are expected to be worth around
$60bn (up from around $40bn today) over
the medium term.
The Entain platform enables us to deliver
a great experience for our customers with
ease of use, stability, great service, and
protection enhanced by fresh, unique and
exciting content. We continue to evolve our
offering and appeal to create moments of
excitement for a broader, more recreational
customer base. Not only will this grow and
deepen our presence in our markets, but it
will deliver earnings with greater stability
and of a higher quality.
In the UK, our brands continue to resonate
with, and be enjoyed by, a growing
number of customers with online actives
growing by 15% in 2021. We have made
significant progress in re-positioning
the UK brands, particularly Ladbrokes
and Coral, to maximise their appeal to a
broader audience. Our new advertising
saw us launch the industry’s first brand-
led marketing campaigns with both
our “Drummers” and “Balloon” adverts
captivating and exciting audiences, whilst
our new range of TV adverts for Foxy and
sponsorship of First Dates also landed
well. We also further enhanced our offering
and user experience, engaging customers
with new games, products and content.
We are creating free-to-play games
in sports and gaming to provide more
options for customers. Our partnership
with ITV to create documentaries around
inspiring stories in sports has reached an
average 800k viewers plus five million on
social channels.
Our digital businesses in Italy and Belgium
both performed strongly, despite the
retail environment across Europe facing
challenges due to Covid restrictions.
The online winners during 2021 were
those operators with the largest retail
network, with omnichannel operations
seeing a significant advantage. In Italy
actives and NGR both saw strong growth,
+18% and +31%cc respectively, as our
offering benefited from product and feature
enhancements as well as user experience
improvements. We also introduced new
NBA game footage, new pre-match
football player markets and in-house
Eurobet games across bwin and Gioco
Digitale. Eurobet continued to bring new
and exciting content to customers with the
release of over 300 new casino games as
well as adding esports streaming to bwin.
tv. The relaunch of Ladbrokes.be in Belgium
drove almost 72% growth in actives, with
the digital offering also benefiting from
refreshed advertising campaigns and
bwin’s sponsorship of Jupiler Pro League
enabling live streaming of football matches
both online and mobile.
During 2021, the German market further
digested the new regulatory regime
including both the Interstate Treaty and the
new Turnover Tax. This structure brought
welcome clarity to the German online
betting and gaming market, however,
challenges remain. We look forward to full
licensing and regulatory oversight, creating
an orderly market that delivers a properly
regulated environment and protects
customers from unregulated operators.
We have continued to differentiate bwin’s
offer with a number of products and
enhancements. During the year bwin
entered into a sponsorship agreement
with UEFA that provides significant brand
exposure through stadia and media
backdrops, not just in Germany, but also in
many other countries around the world that
follow the Europa League and the Europa
Conference League. In addition, bwin’s
exclusive free to play product partnership
with football focused content platform, 433,
has helped to drive a 40% increase in bwin
Instagram followers.
Our Australian business continues to go
from strength to strength with excellent
performances from both Ladbrokes and
Neds brands with actives +9%, versus
strong 2020 comparators, and NGR +20%
(+18%cc) year-on-year. Its refreshed
approach has engaged with new and
lapsed customers delivering exciting
content, engaging material, eye-catching
adverts, and an unwavering focus on
customer experience. Since kicking off
our content-led growth strategy, we
have produced over 250 content pieces
with Ladbrokes Deep Dives for both the
Melbourne Cup and the Ladbrokes Cox
Plate, as well as our ‘Moody on the Mic’
podcast. To date, this content has had more
than 440m impressions, with Peter Moody’s
podcast reaching an average of 2.5m
people per episode. We launched free-to-
play games and a new quiz-based game
to coincide with the launch of the domestic
20/20 cricket season.
Enlabs in the Baltics continues to perform
ahead of our expectations with Entain’s
core products now fully integrated in the
Optibet offering helping to drive actives
up +38% on a proforma basis. During H2
2021, Optibet rolled out a new esports
betting product in Latvia and Estonia,
with customers now able to bet and watch
gaming such as eFIFA, eNBA, Fortnite, and
Call Of Duty.
Our acquisition of Bet.pt saw Entain enter
Portugal, one of Europe’s fastest growing
markets. Since its platform migration and
brand alignment to bwin.pt the business
now benefits from a larger and broader
range of products with greater availability
of live games whilst also leveraging our
existing sportsbook strength alongside
bwin’s partnership with Liga Portugal.
Crystalbet continues to deliver strong
growth with a leading market share of 32%
and retaining its position as number one
operator in the Georgian market.
We opened our ‘shop of the future’ in
the UK that better connects with the
retail environment.”
Entain plc | Annual Report 2021 Strategic report 15
Our business in Brazil continues to be
the market leader, delivering exceptional
growth with actives +156% and NGR
+111%cc in 2021. Performance remains
very strong and despite the heightened
competition ahead of regulation of sports
betting expected during 2022 (and gaming
in 2023), the strength of our Sportingbet
brands and operational expertise ensure
we continued to outperform other
operators, as there is clear demand for the
high quality experience and breadth of
product offering which Entain provides.
PartyCasino and partypoker brands
were consolidated to become One Party.
The business performance was in-line
with expectations, with pleasing growth
in casino actives in particular. One Party
continues its renewed focus on recreational
players and their entertainment experience.
The impact of Covid restrictions and
associated disruptions impacted all our
Retail operations throughout 2021, but
to varying degrees. However, we were
encouraged by the resilience of our Retail
operations as customers demonstrated
that they enjoy the in-store experience
with volumes growing quickly as
restrictions eased.
Our shops in Europe were a step behind
the UK on the recovery path due to the
later easing of restrictions. Early reopening
activity was machine-led with sports
volumes returning with the football season
and broader sporting calendar.
Evolving the customer experience across
Retail, leveraging digitalisation and
improving the omni-channel journey is a
key driver across our retail business in the
UK with customers highly engaged with
the range and depth of our offering. As part
of our brand reinvigoration we leveraged
the media value of our store windows
through digitalisation of displays. Omnia,
our proprietary EPOS system, is now fully
rolled out in Great Britain and our in-
house Betstation terminals, being enjoyed
by customers in over 200 shops, have
supercharged our machine-led growth for
both sports and gaming. Positive feedback
and encouraging data suggests customers
are enjoying our Digital Hubs in the current
30 locations.
With a portfolio of strong brands across the
Group, some with global recognition such
as bwin and Party, we are able to grow into
new markets organically. We were one of
the first operators to launch in Colombia as
that market regulated and having acquired
the enabling tools in Impala we will launch
organically across Africa through 2022
and beyond.
New market entries, both through M&A and
organic expansion, collectively contributed
3% of Online NGR during the year.
We continue to look for further opportunities
to enter new, growing and regulated or
regulating markets where we can drive
greater value for shareholders.
Expanding into new markets
There are significant growth opportunities
across the globe with around $40 billion in
long-term gross gaming revenues in over
50 regulated markets in Central & Eastern
Europe, Latin America and Africa where we
do not currently operate today.
We have a strong track record of integration
and value creation through M&A and
completed four acquisitions during 2021
including Enlabs across the Baltics, Bet.pt
in Portugal, Impala to drive access across
Africa and Unikrn to take us into the esports
wagering market. We have already been
active in 2022 with three transactions
to date.
In February 2022, we acquired Avid Gaming
which, through Sports Interaction, provides
access to the highly attractive, fast growing
and regulating sports betting and gaming
market in Canada. Sports Interaction’s
sports-led offering is highly complementary
to Entain’s existing business, and the
combination will provide customers
with a broader offering of engaging
products and services for customers in the
Canadian market.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 16
Chief Executive’s Review continued
Engaging and attracting
new audiences
Technology is changing consumer
behaviour with new trends and ecosystems
creating exciting opportunities. We are
listening to the customers, we understand
these changes, and we adapt and
innovate to drive further growth across
new audiences.
Customers are seeking more content,
more engagement, more interactive and
social experiences, more video, more audio
and more free-to-play entertainment.
Simply put, interactive entertainment and
media are converging with our traditional
markets of betting and gaming.
Entain sits at the heart of this convergence
and provides us with a tremendous
opportunity to leverage our platform to
meet customers’ needs whilst attracting
more customers into our network. This not
only increases engagement and stickiness,
but also starts creating powerful flywheel
effects that enhance product cross-sell and
reduce acquisition costs.
During the year, we laid some of the
foundations to grow into these markets
and start to benefit from those flywheel
effects. As discussed above, in markets like
the UK, Australia and Germany we have
created rich content and media to engage
customers around sports. These have
already shown significant success in
broadening our actives base. We have
created new products across both our
free-to-play and real money offering that
broadens engagement with customers.
In August, we acquired Unikrn to provide
access to the esports wagering market
that we expect to be worth c$12bn over
the medium term. Since the acquisition we
have been re-setting the product suite and
working with partners and regulators to
develop a product that we will launch later
this year.
The casual mobile gaming market has
grown rapidly in recent years and our
technology, data analytics and other
capabilities align with how this market
operates. To fully benefit from this market
we will likely acquire or partner with an
existing operator. We believe that this
market aligns closely with the evolving
demands of our customers and will help
drive flywheel effects of reducing costs,
increasing stickiness and diversifying our
revenue base.
As we evolve Entain to address these
changing customer needs and broaden
our product markets, we will increasingly
look to partnerships to expand our growth.
For example, our partnership with McLaren
provides richer and more engaging
experiences for Formula 1 fans that are not
available anywhere else. Our partnerships
with BT & Verizon will help us benefit from
innovative new experiences for customers.
Technology continues to evolve and the
Entain platform puts us in a unique position
to be able to explore and innovate to
create exciting new unique products and
experiences for our customers. In order
to accelerate that we have created the
Ennovate hub supported by a £100m
investment over three years. The Ennovate
hub will develop new products around
augmented reality (“AR”), virtual reality
(“VR”), 5G and edge computing technology
both directly and through funding for
incubators and accelerators. We recently
acquired an interest in Draw & Code, a
leading immersive experience studio to
develop VR products. We will also work
with a number of partners such as Verizon,
BT and Theta Labs in developing the
technology and products that drive the
emerging ecosystems within the metaverse.
In addition, it will support initiatives in
Entain’s Sustainability Charter around
environmental and social issues as well as
supporting EnTrain the Group’s global D&I
initiative to provide more opportunities in
technology and technology-related careers.
We positively promote an inclusive
culture as we believe that the
more diverse your colleague group
the better the business.”
Entain plc | Annual Report 2021 Strategic report 17
Sustainability
Sustainability is at the heart of everything we do, and we firmly
believe that the most sustainable business will be the most
successful business in our industry. Our Sustainability Charter
underpins this approach and is built around four core principles: an
exclusive focus on regulated markets; continuing to take the lead on
responsible betting and gaming; best in class corporate governance;
and investing in our people and local communities.
Read more about our Sustainability
Charter: pages 40 to 65
We made significant progress across all
four of these during the year, many of
which we highlighted at our first Entain
Sustain event in November. Globally, we
lead the industry on responsibility, with
revolutionising player protection at the
core of our approach. We continue to make
great progress with ARC™ with both the
real-time customer interaction trials and the
international rollout well underway.
Having withdrawn from a number of
markets since November 2020, we continue
to monitor the regulatory timetable for
other countries, working closely with the
relevant authorities to help develop a
robust framework that protects players and
maintains the highest regulatory standards.
In October 2021, we ceased trading in the
Netherlands whilst we await the licensing
process to complete.
It is pleasing to see our efforts being
recognised externally with Entain being
awarded Operator of the Year by EGR, and
Socially Responsible Operator of the Year
at the SBC Awards North America, our
continued participation in the FTSE4Good
index and the Dow Jones sustainability
index as well as being recognised as a most
admired company in Management Today’s
annual awards.
Focus on regulated markets
We continue to make progress towards our
commitment that all our revenues will come
from regulated markets by the end of 2023.
As at end of 2021, almost 100% of our NGR
was from regulated or regulating markets,
with Brazil, Canada and Netherlands
being the most significant in the process of
regulating within this.
Being a trusted entertainment provider,
protection of our customers is fundamental
to our customer centric strategy.
Operating in a well-structured regulatory
regime ensures revenues have greater
clarity and certainty and are ultimately
more sustainable and therefore are of
higher quality than earnings from non-
regulated markets.
We actively engage with regulators in
order to help support a well-structured
regulatory environment that balances a fair
and open recreational market with the need
to provide protections for the small minority
of customers who may run into problems.
In the UK, the 2005 Gambling Act is
currently under a much-needed review that
will set out the regulatory framework for
years to come. We are contributing to this
process both directly and with our industry
peers through the Betting & Gaming
Council to help find the right balance for
a well-regulated market that protects the
minority at risk, polices the fringes of the
industry such as the black market and
preserves the market as entertainment
for the vast majority of customers who
enjoy betting and gaming as part of their
recreational activity.
We are also engaging with regulators
around the world to support emerging
regulation around esports skill-based
wagering as this market opens up across
the world.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 18
Chief Executive’s Review continued
As a reflection of the importance of this
across our business, last year we introduced
a responsible betting and gaming metric to
our Group-wide remuneration policy.”
ARC™ employs sophisticated algorithms,
using 26 different markers of protection
to identify signs of risk and, when needed,
steps in to interact with the customer,
modify the operation of games such as
limiting stakes or slowing down play and
suppressing marketing activity. Our initial
trials have been very encouraging, with
results showing a risk assessment accuracy
of over 80%, a 120% uplift in the use of
safer gambling tools by those most at risk
and a 30% overall reduction in customers
increasing their risk levels.
We continue to refine ARC™, as the
programme continuously improves through
machine-learning. Having been initially
trialled in the UK, the programme is now
being rolled-out internationally.
During the Covid-19 lockdowns, mindful of
the impact of restrictions on customers, we
expanded our monitoring and markers of
protection and increased communication
and messaging to all customers on the
importance of safer betting and gaming.
Lead on Responsibility
We continue to lead the market in the
critically important area of responsible
betting and gaming. As a reflection of the
importance of this across our business, in
2021 we introduced a responsible betting
and gaming metric to our Group wide
remuneration policy which, in 2022, will
expand its measurement and accountability
further into our international markets.
Through our award-winning Changing
for the Bettor safer betting and gaming
programme, we take a holistic approach
to protecting customers, investing millions
into research, education and treatment.
In 2021, we introduced ARC™ which, using
revolutionary AI technology, operates in
real-time, and, crucially, is individually
tailored for each customer. It is built
on a foundation of academic research
and is designed to work invisibly in the
background stepping in when needed.
Entain plc | Annual Report 2021 Strategic report 19
Best in class corporate governance
As a world-leading company we are
committed to the highest standards of
governance in all areas of our operations
and our Board has been strengthened and
revitalised during the year. In March 2021,
Mark Gregory was appointed to the Board
as an independent Non-Executive Director
and as the Chair of the Remuneration
Committee. The Board is now made-up
of a Chairman, three Executive Directors
and seven independent Non-Executive
Directors, with a 64%:36% male to female
gender split.
In line with our objective to operate
best in class corporate governance, we
commissioned Alvarez & Marsal (“A&M”),
an independent professional firm to conduct
a comprehensive review of the Group’s
governance and compliance practices.
Having completed their review, A&M
concluded the Group had “put in place
all the key components of a compliance
framework to enable it to identify and
manage its general compliance and
regulatory risks”. While welcoming this
positive assessment, the Group is taking
on a number of specific recommendations
within A&M’s report to further strengthen
our processes.
Best place to work and investing in
our communities
We want Entain to be a great place for
our people to thrive, develop careers
and feel empowered to do what’s right
for our customers, our colleagues and
our communities.
We positively promote an inclusive culture
as we believe that the more diverse your
colleague group the better the business
will be and, as importantly, will be better
representative of our customer base.
We have always had a flexible approach
to office-based working and with the
evolution taking place as a result of the
Covid pandemic, we are further evolving
that flexibility recognising the needs of
different teams and different global offices
will vary. We want to provide the right
environment to continue to attract the
best talent and to enable them to thrive.
However, the power of collective thought
and idea creation, particularly in face-to-
face environments will remain a core part of
how we do business and so we are evolving
our workspaces to enable that flexible co-
ordination to evolve. We have completely
refurbished our offices in Stratford, London
to create the right sort of collaborative
environment for our people. We will be
testing and reviewing our findings from
this and take those into development of our
other offices.
We are committed to lightening our
footprint on the planet and have already
reduced our greenhouse gas emissions
by 15% from 2018 to 2021. Last year, we
committed to Net Zero carbon emissions
by 2035 – 15 years ahead of the target set
by the Paris Agreement on climate change.
In doing so we have formally joined the
Science Based Target initiative and are
seeking to demonstrate leadership within
our sector.
Our two Foundations – the Entain
Foundation and the Entain Foundation US,
continue to support research into problem
gambling, education initiatives that align
with our sustainability ambitions as well
as investing into local communities and
grass roots sports across our key markets.
In November we launched EnTrain, an
initiative to provide access, education and
technology for groups underrepresented
across all sectors. EnTrain set the ambitious
target to positively impact one million
people through increased diversity in
technology by the end of the decade.
This builds on our partnerships with
organisations such as Girls Who Code,
the international non-profit body working
to close the gender gap in technology and
redefine the image of what a programmer
does; and The Tech Girls Movement
Foundation, the Australian based
foundation which is challenging gender
stereotypes to increase female participation
in STEM industries. The Entain Foundation
is looking to build on these partnerships
throughout 2022.
The Entain Foundation has also continued
to invest in grassroots sports through its
Pitching In programme and partnered
with the Pitching In Trident Leagues
containing 245 clubs and over 15,000
community based non-league football
players. In addition to funding the running
of the leagues, the Foundation is also
the Founding partner in the Trident
Community Fund, which enables clubs
to run community engagement projects.
In 2021 we also extended our long-term
collaboration with SportsAid, the UK
based sports charity, through which we
sponsor and provide personal development
coaching to 50 young athletes each
year. We are also internationalising
our investment in grassroots sport and
are backing projects in Italy, Greece
and Colombia.
In Canada, since our recent acquisition of
Avid Gaming and its Sports Interaction
brand, Entain are delighted that our new
unique relationship allows us to support
the socioeconomic efforts of the Mohawks
of Kahnawà:ke through our Mohawk
Online agreement.
Jette Nygaard-Andersen
Chief Executive Officer
3 March 2022
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 20
Our strategic framework
Our vision
The world leader in betting, gaming
and interactive entertainment
2021 priorities
Growth
2021 progress
Priorities for 2022
KPIs
Risks
Remuneration
1 – Leadership in North America
Clear ambition to be the leading operator in the North American
sports betting and iGaming market through BetMGM.
Now the second biggest US operator, BetMGM
achieved a 23% market share in the markets which it
operates in, in the fourth quarter, in line with our long-
term objective of 20% to 25.
2 – Grow our core markets
Continue to grow rapidly in the 31 territories
in which we already operate.
3 – Expanding into new markets
Significant opportunities exist for expand into new regulated
markets through organic opportunities as well as M&A.
4 – Engaging and attracting new audiences
Entain will be at the forefront of leveraging opportunities
created as new technology-enabled forms of entertainment
continuously evolve.
Sustainability
We have now delivered nine years
of double-digit growth in online NGR with a
two-year compound annual growth rate of 20%cc.
Completed acquisitions of Enlabs in the Baltics, Bet.pt
in Portugal, Impala to drive access across Africa and
Unikrn to take us into the esports wagering market.
Broadened focus to new areas of gaming
entertainment, exploring new partnerships
and opportunities.
Enter new states as they
Market access
marketing.
NGR growth
regulate with market
leading customer offer.
Continue to innovate in
existing markets focusing
on product, brands and
Identify new opportunities
in the 50 regulated
markets where we do not
currently operate.
Deliver new customer
propositions outside of our
traditional product offer.
150m
people
+13%cc
Online net gaming revenue
£3,067m
Underlying EBITDA
£881.7m
Technology failure.
Loss of key locations.
Trading, liability and
pricing management.
Increased cost of product.
Executive annual bonus
are linked to Operating
Profit, Online NGR growth
and safer betting and
gaming targets and
customer metrics.
5 – Focus on regulated markets
All revenues to derive from regulated markets by end of 2023.
In 2021 nearly 100% of our revenue derived
from nationally regulated or regulating markets.
Work with authorities in
Contribution to safer betting
Ensuring health, safety and
Furloughed colleagues
remaining markets to find
and gaming initiatives
wellbeing of our people.
received 100% of salary.
6 – Lead on responsibility
Our technology enables us to continuously upgrade and
personalise our protections for customers.
7 – Best in class standards of corporate governance
Ensuring the highest standards in all areas of our operations.
8 – Best place to work and investing in our
people and communities
Ensure Entain is the best place to work while contributing
to communities where we are based and operate.
Trialled our Advanced Responsibility & Care™
(“ARC™”) programme to use technology to
proactively intervene to prevent betting and gaming
related harm developing. Establish appropriate safer
betting and gaming metric to link remuneration with
safer betting and gaming practices.
Strengthened and diversified our Board and
governance practices under Chairman
Barry Gibson. Appointed Robert Hoskin as
Chief Governance Officer.
In line with its with its commitment to donate £100m
to good causes over five years, the Entain Foundation
invested in research, education and treatment of
problem gambling; its grassroots sports investment
fund; and launched EnTrain, its diversity through
technology programme.
Safer betting and gaming
metric for 2021 bonus
schemes implemented.
a path to regulation.
Continue roll-out of ARC™
and increase investment
in all areas of research,
education and treatment
of problematic behaviour.
Continuation of safer
betting and gaming metric
to make-up 15% of 2022
bonus payments for all
office based employees.
Continue to diversify Board
and evolve governance
best practice.
Roll-out Foundation
investment programmes in
more international markets.
Employee satisfaction with
cybersecurity.
approach to wellbeing
£12.9m
87%
Ability to recruit and
retain employees.
Data breach and
Changes in betting and
gaming legislation.
Changes in betting and
gaming tax regimes.
Target set for carbon Net
Zero throughout operations
Continued impact of
Covid-19.
2035
Commitment to Entain
Foundation over five years
£100m
Entain plc | Annual Report 2021 Strategic report
The world leader in betting, gaming
and interactive entertainment
Our vision
2021 priorities
Growth
1 – Leadership in North America
Clear ambition to be the leading operator in the North American
sports betting and iGaming market through BetMGM.
Now the second biggest US operator, BetMGM
achieved a 23% market share in the markets which it
operates in, in the fourth quarter, in line with our long-
term objective of 20% to 25.
2 – Grow our core markets
Continue to grow rapidly in the 31 territories
in which we already operate.
3 – Expanding into new markets
Significant opportunities exist for expand into new regulated
markets through organic opportunities as well as M&A.
4 – Engaging and attracting new audiences
Entain will be at the forefront of leveraging opportunities
created as new technology-enabled forms of entertainment
continuously evolve.
Sustainability
We have now delivered nine years
of double-digit growth in online NGR with a
two-year compound annual growth rate of 20%cc.
Completed acquisitions of Enlabs in the Baltics, Bet.pt
in Portugal, Impala to drive access across Africa and
Unikrn to take us into the esports wagering market.
Broadened focus to new areas of gaming
entertainment, exploring new partnerships
and opportunities.
5 – Focus on regulated markets
All revenues to derive from regulated markets by end of 2023.
In 2021 nearly 100% of our revenue derived
from nationally regulated or regulating markets.
6 – Lead on responsibility
Our technology enables us to continuously upgrade and
personalise our protections for customers.
7 – Best in class standards of corporate governance
Ensuring the highest standards in all areas of our operations.
8 – Best place to work and investing in our
people and communities
Ensure Entain is the best place to work while contributing
to communities where we are based and operate.
Trialled our Advanced Responsibility & Care™
(“ARC™”) programme to use technology to
proactively intervene to prevent betting and gaming
related harm developing. Establish appropriate safer
betting and gaming metric to link remuneration with
safer betting and gaming practices.
Strengthened and diversified our Board and
governance practices under Chairman
Barry Gibson. Appointed Robert Hoskin as
Chief Governance Officer.
In line with its with its commitment to donate £100m
to good causes over five years, the Entain Foundation
invested in research, education and treatment of
problem gambling; its grassroots sports investment
fund; and launched EnTrain, its diversity through
technology programme.
Key:
Achieved
On target
Not achieved
21
Our purpose
Bring moments of excitement
into people’s lives
2021 progress
Priorities for 2022
KPIs
Risks
Remuneration
Technology failure.
Loss of key locations.
Trading, liability and
pricing management.
Increased cost of product.
Executive annual bonus
are linked to Operating
Profit, Online NGR growth
and safer betting and
gaming targets and
customer metrics.
Enter new states as they
Market access
regulate with market
leading customer offer.
Continue to innovate in
existing markets focusing
on product, brands and
marketing.
Identify new opportunities
in the 50 regulated
markets where we do not
currently operate.
Deliver new customer
propositions outside of our
traditional product offer.
150m
people
NGR growth
+13%cc
Online net gaming revenue
£3,067m
Underlying EBITDA
£881.7m
Work with authorities in
remaining markets to find
a path to regulation.
Continue roll-out of ARC™
and increase investment
in all areas of research,
education and treatment
of problematic behaviour.
Continuation of safer
betting and gaming metric
to make-up 15% of 2022
bonus payments for all
office based employees.
Continue to diversify Board
and evolve governance
best practice.
Roll-out Foundation
investment programmes in
more international markets.
Contribution to safer betting
and gaming initiatives
Ensuring health, safety and
Furloughed colleagues
wellbeing of our people.
received 100% of salary.
Safer betting and gaming
metric for 2021 bonus
schemes implemented.
Ability to recruit and
retain employees.
Data breach and
cybersecurity.
Changes in betting and
gaming legislation.
Changes in betting and
gaming tax regimes.
Continued impact of
Covid-19.
£12.9m
Employee satisfaction with
approach to wellbeing
87%
Target set for carbon Net
Zero throughout operations
2035
Commitment to Entain
Foundation over five years
£100m
Read more: pages 40–65
Read more: pages 79–85
Read more: pages 116–140
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
22
How we create value
1. Our purpose
4. Delivering a differentiated
customer experience
Bring moments
of excitement into
people’s lives
2. Our platform
The Entain Platform
provides us with unique
competitive advantages
to provide customers
with a great experience
and to deliver on our
strategy
People and Talent
Content Creation and Products
Global Scale and
Brand Awareness
Marketing Excellence
Proprietary Technology
M&A and Integration Track Record
Customer Relationships and Data
Regulatory Expertise
and Responsibility
Understanding and responding to
customers’ needs, particularly as they
evolve, enables us to benefit from
powerful flywheel effects that, in
turn, broadens our customer reach,
increases engagement and loyalty,
grows revenues and drives down
acquisition costs.
Enhanced
content and
media
experience
Great
experience in
real money
gaming
The Entain
platform
Expanded
interactive
entertainment
experience
3. Our strategy
Growth
We are focused on a range of
exciting growth opportunities
that will significantly increase
the value of the Group.
Sustainability
We believe the most
sustainable business will be
the most successful business.
Read more: pages 20 to 21
Entain plc | Annual Report 2021 Strategic report
5. How we add value
6. Our stakeholder outcomes
23
Create moments of excitement
Personalised offers.
Effective marketing.
Omni-channel approach.
Great customer experience.
Read more: pages 24 to 25
Grow our business
Gain market share.
Maximise US opportunity.
Enter new markets.
Innovate for new audiences.
Read more: pages 13 to 16
Strengthen the quality
of our earnings
Diversify geographic and product mix.
Broaden our customer base.
Focus on regulated markets.
Deliver scale efficiencies.
Read more: pages 13 to 18
Ensure sustainability
Be a great place to work.
Deliver ARC™.
Protect the environment.
Support our communities.
Customers
Best betting and gaming experience
We are focused on delivering our customers
the most exciting and trusted entertainment.
Online performance
+19% NGR CAGR 2019–2021
(+20%cc)
Our people
Great place to work
In a global ‘Your Voice’ survey 87% of respondents
reported that they felt Entain genuinely cared
about our people.
Satisfaction
87%
Communities
Community activity
We actively support the communities in
which we operate.
Entain Foundation
£100m
committed over five years
Investors
Positive returns
Everything we do is ultimately focused
on delivering value to our shareholders.
Underlying EBITDA
£881.7m +5%
2020: £843.1m
Dividends
Recognising the importance of dividends to
shareholders alongside our capital allocation
priorities in support the Group’s growth strategy,
the Board continue to keep the recommencement
of the payment of dividends under ongoing review.
Read more: pages 40 to 65
Read more: pages 66 to 76
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
24
Strategic report
Our strategy in action
We are constantly working to provide a richer and
more engaging experience for our customers. At
the product level this means a continuous process
of optimising our sites, apps and games to create
the smoothest, most enjoyable experience.
Explore more in our
online annual report:
www.entaingroup.com/2021annualreport
Free-to-play
We have a built a hugely popular free-to-play
portfolio that provides great entertainment at
no cost to the customer. In Australia our Neds
brand has introduced a live trivia quiz which takes
place while sports are in play. At Coral we have
a fully featured free arcade where customers can
win prizes, while Ladbrokes offers 1-2-Free, a
prediction game offering free bets. In the UK, our
six free-to-play games are enjoyed by 700,000
customers a week, many of whom go on to enjoy
our real money offer.
be
enter tained
Entain plc | Annual Report 2021
Entain plc | Annual Report 2021
Overview | Strategic report | Governance | Financial statements
25
McLaren F1
In 2021 our partypoker and PartyCasino brands
teamed-up with McLaren Racing. Featuring the
Party brands on two of the fastest cars in
Formula 1 was only the beginning of the story.
Working with the McLaren team, we took fans
behind the pit wall with the See the Unseen video
series in which driver Daniel Ricciardo gave his
unique insights into the world of F1. The series
proved a massive hit, having been viewed
over 40,000 times. See the Unseen was part
of a broader McLaren Access content package
that included rich media and money-can’t-buy
competition prizes.
Against the Odds
2021 was also the year that Coral turned
documentary maker, creating Against the Odds,
a groundbreaking series of 10 full-length sporting
documentaries broadcast on primetime television
by ITV. Featuring the unique stories of Danish
international goalkeeper Kasper Schmeichel,
trailblazing female flat jockey Hollie Doyle and
darts world champion Gerwyn Price, the series
captures some of the most inspiring stories
in sport. Backed by social media campaigns,
Against the Odds, which runs until July 2022, is
enabling Coral to engage with customers in a
more thought-provoking way.
esports
With our acquisition of Unikrn in August 2021, we
got serious about esports. Boasting an audience
of over 450 million viewers annually, the sector
is more popular with viewers than the NFL, NBA
or NLB. The global esports betting market is
projected to be valued at $12bn by 2025. We are
developing a dynamic new offer which will enable
customers to bet against each other on their
own performance, in either casual, skill-based
games or in the massively popular blockbusters
titles such as League of Legends and Counter
Strike. The Group is also building an esports book
where bets can be placed on professional esports
athletes. The experience will be surrounded with
rich media and social integrations.
enter tained
Entain plc | Annual Report 2021
Entain plc | Annual Report 2021
26
Our strategy in action continued
VR Arcades
Through Ennovate, we are taking the immersive
VR experience to customers on the high street,
converting two of our betting shops into new
VR retail experience zones. Consumers will
soon be able to try out ground-breaking new
experiences in immersive sports and interactive
entertainment for themselves. Our first VR
arcades are expected to open in 2022.
new
experie nces
While we enrich the betting and gaming
experiences on our core products to entertain
our customers in the present, we are also looking
to the future, expanding our horizons to develop
new cutting-edge products which will thrill our
customers tomorrow and beyond. In January
2022 we announced the launch of Ennovate, our
global innovation hub, with a brand-new London-
based lab, backed by £100m of funding.
Entain plc | Annual Report 2021
Entain plc | Annual Report 2021 Strategic report 27
Virtual Sports Club
Soon to launch, we have developed a brand-new
concept for socialising around sport – the virtual
sports club. Utilising the world’s most popular
VR headsets the Oculus Quest 2, customers will
be able to meet and hang out with each other
in a virtual environment. There they will be able
to chat, play games against each other, watch
broadcast quality live-streamed sporting fixtures
and even place a bet.
NFTs
NFTs or Non-fungible tokens, are unique digital
collectible assets which have rapidly exploded
in popularity over the past year. In partnership
with Theta Labs, we are developing NFTs to
enable our customers to own unique moments
of digital history. Our first NFTs from partypoker
will showcase some of the most iconic moments
and tournament hands in the history of poker,
while others will feature PokerApes, a series of
high-definition images with a partypoker twist,
featuring full 3D artwork.
experie nces
Entain plc | Annual Report 2021
Entain plc | Annual Report 2021 Overview | Strategic report | Governance | Financial statements 28
Our strategy in action continued
As we entertain our customers, our number one
priority remains ensuring they can play safely
and within their means. Through our award-
winning Changing for the Bettor safer betting and
gaming programme, we take a holistic approach
to protecting the customers, investing millions into
research, education and treatment.
player
prot ection
Entain plc | Annual Report 2021
Entain plc | Annual Report 2021 Strategic report 29
ARC™
In 2021 we introduced ARC™ – Advanced Responsibility and Care™
– which takes a technology-led intelligent approach to risk reduction.
Using revolutionary AI technology, ARC™ operates in real-time, and
crucially, it is individually tailored for each customer. It is built on a
foundation of academic research and will always be working invisibly in the
background stepping in when needed.
ARC™ employs sophisticated algorithms, utilising 26 different markers of
protection to identify signs of risk and when needed steps in to interact
with the customer, modify the operation of games such as limiting stakes or
slowing down play and suppressing marketing activity.
Our initial trials have been very encouraging, with results showing a
risk assessment accuracy of over 80%, a 120% uplift in the use of safer
gambling tools by those most at risk and a 30% overall reduction in
customers increasing their risk levels.
We continue to refine ARC™ , as the programme continuously improves
through machine-learning. Having been initially trialled in the UK, the
programme is now being rolled-out internationally.
Read more: pages 46 to 47
N
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prot ection
Entain plc | Annual Report 2021
Entain plc | Annual Report 2021 Overview | Strategic report | Governance | Financial statements
30
Our strategy in action continued
As a major international business, we embrace our responsibility
to make a positive contribution to the societies and communities
in which we operate – it’s what our customers and colleagues
rightly expect of us. Our Sustainability Charter is at the heart of
our business and sets out our commitment to operate exclusively
in regulated or regulating markets, to lead on responsible
gambling, pursue the highest standards in corporate governance
and invest in our people and our communities.
Net Zero
We have taken an industry leading role on
the environment, by formally committing to
reach net zero for carbon emissions by 2035,
15 years ahead of the target set at the Paris
Agreement. To deliver on this we are working
with the Carbon Trust to develop our carbon
reduction plan before submitting it to the Science
Based Target Initiative. We are also working
with an independent third-party to plant a one
million tree Entain forest to capture carbon from
the environment.
Read more: pages 63 to 65
the
right thing
Pitching In
Sport is in our DNA at Entain and we are focused
on providing support at the grassroots level,
where it is most needed. In the UK we operate
two flagship projects, partnering with SportsAid,
to provide young athletes with their first external
funding and personal development training and
the Pitching In Trident Leagues, made up of
245 clubs at the heart of non-league football.
In Greece we run our Team Future programme,
supporting the next generation of Greek athletes
to reach their potential, with six bwin sponsored
athletes featuring at the Tokyo Olympics.
Elsewhere we are backing community football
projects in countries including Italy, Germany
and Colombia.
Read more: page 61
Entain plc | Annual Report 2021
Entain plc | Annual Report 2021 Strategic report
31
Chance for Childhood
At the community level one of our
largest projects has been supporting
Chance for Childhood, the award-
winning charity working in Africa to
help the most vulnerable children.
In partnership with them we are
working to break the vicious cycle
of poverty and exclusion through
an approach tailored to the unique
needs of each child. With this support
from the Entain Foundation, in 2021
Chance for Children supported
714 marginalised women, children
and families.
EnTrain
At Entain:Sustain we launched
EnTrain, a global programme to
promote increased access to, and
diversity within, technology. We set
a bold ambitious target for EnTrain
to positively impact the lives of one
million people around the world – either
directly or through their families and
dependants – by 2030. Working with
non-profit partners such as Girls Who
Code and the Tech Girls Movement
Foundation, we are delivering
programmes to inspire, educate
and equip young women with the
technology and IT skills to help them
take leading roles in STEM industries
in the future. EnTrain encompasses:
the Entain Academy to develop tech
skills; scholarships to provide academic
learning; and apprenticeships to
provide in-job training.
Read more: pages 61 to 62
right thing
Entain plc | Annual Report 2021
Entain plc | Annual Report 2021 Overview | Strategic report | Governance | Financial statements
32
The industry in which we operate
Online Europe
Geographically, the combined Online UK
and European market represents 47% of
the total online gaming market in 2021,
with year-on-year growth of 18% and 20%
respectively. Entain’s Online proforma NGR
in Europe represents over 70% of total
Group Online NGR in 2021.
The next largest market is the unregulated
Asian market (where Entain does not
operate) which represents 28% of the
global total, followed by North America
(15%), Oceania (7%), Latin America
(2%), and Africa (1%). Entain also has
online operations in Australia, Brazil,
and North America.
Global Online Growth
Entain operates in the global online gaming
market, which is estimated to be worth
c£75bn in 2021. Over the past 10 years
the market grew at 14% CAGR and growth
from 2020 to 2021 was 24%, driven by
channel shift from pandemic enforced retail
closures and the increasing number of US
states legalising online gaming.
.
n
b
5
4
7
£
.
n
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1
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6
£
14%
The global online market
grew at 14% CAGR over
the last 10 years.
.
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7
8
4
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3
4
£
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Online Market by Product
Online growth has been driven by product
development, with the fastest growing
product areas, Betting and Casino, growing
at 29% and 23% vs. 2020 respectively.
Entain’s brands offer online betting, casino,
bingo, and poker; these products represent
87% of the total online gaming market
in 2021.
47%
UK and Europe represent half of the
global online gaming market in 2021.
87%
Online betting, casino, bingo and poker
represented 87% of all online gambling
in 2021, with betting and casino
forecast to have grown 27% globally.
5 67
1
4 56
4
3
2
3
2
1
1. UK
2. Europe
3. Asia / Middle East
4. North America
5. Oceania
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
6
1
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2
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8
1
0
2
9
1
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2
0
2
0
2
E
1
2
0
2
6. Latin America / Caribbean
7. Africa
Source: Data provided by H2 Gambling Capital,
unless otherwise indicated.
13%
34%
28%
15%
7%
2%
1%
1. Betting
2. Casino
3. State lotteries
4. Poker
5. Bingo
6. Skill / other gaming /
commercial lotteries
54%
27%
12%
4%
2%
1%
Entain plc | Annual Report 2021 Strategic report 33
Forecast
The Online gaming market is forecast
to grow at 11% CAGR over the next five
years driven by US regulation, product
innovation, mobile growth, and the
return of Retail. The US gaming market
is forecast to grow at 23% over the next
five years.
UK Retail betting and gaming is forecast
to grow at 2% CAGR post the pandemic
between 2023 to 2026. In our smaller
Retail betting businesses, forecasted
growth in Italy, Belgium and ROI is flat
between 2023 to 2026.
11%
Online gaming is forecast to grow 11%
CAGR between 2021 and 2026, with
the US growing at 23%.
£bn
130
120
110
100
90
80
70
60
50
40
30
20
10
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Global Online
Italy Retail (Betting)
UK Retail
(Betting & Gaming)
Belgium Retail (Betting)
ROI Retail (Betting)
Retail
Entain’s key Retail operations are in the UK,
Italy, Belgium, and the Republic of Ireland
(ROI).
The UK Retail market (excluding lotteries)
is estimated to be worth £2.5bn in 2021,
a small decline from £3.0bn in 2020
and significantly lower than the £5.0bn
market in 2019. This decline is a direct
result of enforced shop closures due to
the pandemic.
Excluding the pandemic, the UK Retail
market has remained relatively flat over
the past 10 years, with growth in machines
offset by the £2 B2-machine (Fixed Odds
Betting Terminals) stake limit implemented
in April 2019 and the decline in betting
driven by online channel shift.
The UK Retail betting sector is dominated
by four operators which account for over
85% of all betting shops. Entain is the
number one operator in the UK, operating
under the Ladbrokes and Coral brands.
The Italian Retail betting market is
estimated to be worth £0.7bn in 2021, a
decline from £0.8bn in 2020 and £1.1bn in
2019, as enforced closures and restrictions
as a result of Covid-19 impact the market.
Entain operates via the Eurobet brand as
the third largest operator in the market for
over the counter sports betting in Italy.
The ROI and Belgium Retail betting markets
are much smaller, estimated to be worth
£0.2bn and £0.1bn respectively in 2021.
Entain operates in Belgium and the ROI
via the Ladbrokes brand and is the largest
operator in Belgium and third largest in
the ROI.
>85%
Four operators account for over
85% of all UK betting shops.
t
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UK
Italy
ROI
4.8 14% 11% 24% 3% 48%
8.8
7% 1% 43% 1% 48%
0.5 29% 3% 36% 5% 28%
Belgium
0.8
8% 6% 25% 0% 61%
(Entain areas of operations are highlighted)
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
34
Regulatory Update
Gaming is a truly global market and in 2021 the
Group held licences in 31 territories and jurisdictions.
By the end of 2023, we have committed to only
operate in regulated or regulating markets.
The UK
United States
Germany
The UK Government’s review of the
2005 Gambling Act is ongoing, with the
promise of a white paper setting out its
conclusions sometime in 2022. We continue
to engage government actively in this
process, both directly and via our trade
body. It is our consistent view, based on the
experience we have with customers, that
it is more sensible to target interventions
on the small minority who may develop
gambling problems, than to penalise
the responsible majority. We therefore
have continued to develop and enhance
our Advanced Responsibility and Care™
(“ARC™”) programme, which offers tailored
identification of customers who may be at
risk, as well as targeted interventions and
interactions. However, we fully support
sensible additional regulation where
justified. We are participating in a trial of
an industry-wide database of those with
gambling problems and working to develop
a new industry ombudsman. Many of these
changes can be implemented without the
delay inherent in primary legislation and
would represent the most expedient path.
The sports betting regulatory activity
continues at pace in the United States.
Arizona, Louisiana, Maryland and South
Dakota are amongst the US states that
have regulated and launched their sport
betting markets in 2021 or early 2022.
Crucially, the state of New York opened
up its mobile sports betting market in
early January 2022. In addition, other US
states such as Massachusetts, Missouri
and Georgia continue their efforts to
regulate throughout 2022, with Ohio,
having adopted sports betting legislation,
launching its regulated sports betting
market no later than on 1 January 2023.
Indiana and Illinois continue to explore
potential expansion of their markets to
cover online casino. In light of the fact that
some 30 US states have already allowed
for sports betting in one form or another,
the Group remains of the view that in the
coming years some 35 to 40 US states will
have regulated sports-betting, which will
provide BetMGM, the Group’s US JV, with
even broader market access across the
country. The number of states that permit
online casino is also expected to grow.
On 1 July 2021, the new German online
betting and gaming regulation (Interstate
Treaty on Gambling) came into effect.
Additionally, the new Joint Gambling
Authority (“GGL”) in Saxony-Anhalt has
been established on 1 July but will not
be operational until 2023. With the new
regulation entering into force, operators
were able to apply for nationwide slots
and poker licences. As a result, the Group
submitted three slots and two poker licence
applications for its key German facing
brands at the end of August 2021. Due to
various delays on the side of the licensing
authority, no licences have been issued to
this day, but the Group still fully expects its
applications to be successful.
Unlike slots and poker, casino table games
will be regulated on a state-by-state, as
opposed to nationwide, basis. The states
may either create a monopoly or issue as
many licences as the state has land-based
casinos. By the end of 2021, only the states
of Schleswig-Holstein and North Rhine-
Westphalia opted for a licensing system,
with the tendering process not yet released.
The Group has been taking steps towards
securing adequate market access for
these products.
Furthermore, a newly implemented 5.3%
stake tax on virtual slots came into effect on
1 July 2021. Entain has been taking steps
to file a complaint against this stake tax at
an EU Commission level as well as on an
administrative court level in Berlin.
Entain plc | Annual Report 2021 Strategic report 35
2021 Global online gross
gaming revenue
In 2021 online global gross gaming revenue
was estimated to be valued at £74.5bn1.
Below are the largest 15 markets that
are either regulated or in the process
of regulating.
United Kingdom
£9,068.25m
United States
£7,966.21m
Australia
£4,764.39m
Italy
France
£3,279.02m
£2,785.22m
Germany
£2,650.65m
Canada
£1,856.32m
Sweden
£1,523.77m
Spain
Greece
Finland
£1,164.84m
£945.32m
£840.29m
Netherlands
£822.82m
Poland
Ireland
£774.55m
£733.58m
Denmark
£702.90m
Other Europe
Canada
The regulated Ontario online gambling
market will launch on 4 April 2022.
Ontario will have thus become the first
Canadian Province to allow for licensing
of private operators, with other Provinces
such as Alberta expected to follow in the
foreseeable future. The Ontario regulation
allows for sports betting, including single
sports wagering (following the removal
of the previously existing federal ban)
betting on esports, as well as online
casino and poker. Entain has applied for
an Ontario licence.
Latin America
The Group was one of the first global
operators to obtain a Colombian online
betting and gaming licence in late 2020
and continues to deploy its Latin American
regulatory strategy. The Group expects that
the Brazilian sports betting market will be
regulated by the time of the 2022 Football
World Cup, with Entain entering the
regulated market at that time pursuant to
a domestic licence. In addition, the Chilean
government remains on track to have
regulated its online betting and gaming
market by the end of 2022.
Following a sudden change in enforcement
policy by the Dutch authorities, Entain ceased
its offering to players in the Netherlands
on 1 October 2021. In December we were
able to submit our licence application and
are currently awaiting feedback from the
regulator. We hope to receive a licence
later in H1 this year and enter the regulated
Dutch market.
In 2021, we were granted permanent
operating licences for our brands in Greece
and we also relaunched the bwin brand in
Portugal following our acquisition of bet.pt
earlier in the year.
Looking ahead, a new Responsible Gambling
Royal Decree will come into force in Spain
in July 2022 which will require us to make
adjustments to the way we interact with
certain customers. In Italy, the Government
is expected to announce gambling market
reforms later this year, including reconciling
national and local regulations; amendments
to licensing rules; and new measures to
tackle problem gambling. In Georgia, new
online casino regulations will come into force
in the Spring bringing new taxes, a ban on
advertising and increasing the minimum age
for gambling from 18 to 25.
In Sweden, the Government recently
announced that it would not reimpose
Covid-19 related deposit and bonusing limits,
instead opting to consolidate its efforts
into a new gambling regulation bill, which
will include provisions on B2B licences,
marketing restrictions and measures to
tackle illegal gambling.
Elsewhere in Europe, we are still expecting
the Austrian Government to announce
reforms to its online casino market and, in the
meantime, continue to make the case for an
open EU compliant licensing regime.
Read more about our engagement
with regulators: page 39
1. Source: H2 Gambling Capital (including both regulated
and non-regulated GGR).
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 36
Engaging with stakeholders
The Board recognises the importance of effective governance and operates
in line with the UK reporting regulations. The information below should be
read in conjunction with the rest of the Strategic Report.
Section 172 of the Companies Act 2006
imposes a general duty on Directors to act
in a way that they consider, in good faith,
to most likely promote the success of the
Company for the benefit of shareholders as
a whole. The Directors in setting policies
and strategies continue to have regard
to the interests of the Group’s employees,
shareholders, investors, suppliers,
customers, regulators, including the impact
of its activities on the community and on the
Group’s reputation. These factors underpin
the way in which the Directors discharge
their duties and the Board is cognisant of
the need to foster strong relationships with
all stakeholders to help the Group deliver its
strategy and support its long-term values
including sustainability.
Our approach
The Board understands the importance
of effective engagement with all of its
stakeholders. Depending on the nature
of the issue in question, the relevance of
each stakeholder group may differ and
not every decision the Board makes will
necessarily result in a positive outcome for
every stakeholder.
The Board at each meeting ensures that the
process of considering its stakeholders is
embedded in papers it receives to enable it
to discharge its duties. The Board monitors
the progress and delivery of strategic
initiatives through metrics reported
in meetings.
In addition, the Remuneration Committee
assesses the overall performance of
the Group, including progress against
its responsible betting and gaming
ambitions as well as delivery against its
Environmental, Social and Governance
(“ESG”) strategy to support decision making
on remuneration outcomes.
To ensure that the Group continues to
operate in line with good corporate practice,
Directors as part of their induction receive
training on the scope and application of
Section 172 to ensure that they are aware
of how a Board, in its decision making,
must consider its stakeholders.
Colleagues
While the Board’s ability to meet with colleagues in person was again limited in 2021
by Covid-19 related restrictions, Board members have taken part in virtual employee
events and heard colleagues around the Group giving their views on our strategy,
purpose and responsible betting and gaming commitments.
Virginia McDowell, Chair of the
ESG Committee, was appointed as
Designated Workforce Director in
2019. She has attended our Employee
Forums (representing retail and business
colleagues) and engaged in discussions on
topics including protecting our customers
and how the Company has supported
colleagues during Covid-19. Our CEO,
Jette Nygaard-Andersen and Deputy CEO
and CFO, Rob Wood also attended the
Employee Forum, with Jette answering
questions from colleagues around the
Group on her priorities and reflections
following her appointment.
We do not discriminate on the basis
of age, disability, gender or gender
reassignment, pregnancy or maternity,
race, religion or belief, sexual orientation
or marriage/civil partnership.
Read more: pages 57 to 59
Entain plc | Annual Report 2021 Strategic report 37
Customers
Our customers’ interests range from product availability, ethical behaviour, service,
pricing and promoting responsible attitudes to betting and gaming. The Group, as
part of its commitment to safer betting and gaming, engages through initiatives such
as Responsible Gambling Week, where responsible betting and gaming messages
dominated our websites and social media channels.
In addition, the Group offers the Gamban software which blocks access to thousands of
betting and gaming sites. In early 2021, the Group commissioned independent research
to survey the views of the general public on betting and gaming related issues. We also
established ‘The Players’ Panel’ to provide consumers with a platform to voice their
opinions on issues relating to the regulation of betting and gaming in the UK.
Read more: pages 44 to 53
Shareholders
The Group’s investors and shareholders expect, and get, a comprehensive view of the
financial and sustainable performance of the business as well as a clear commitment
to, and delivery against ESG objectives. The Group undertakes regular conference calls
and meetings with investors through roadshows, investor conferences, one to one
and group calls, publication of the Annual Report, press releases and Stock Exchange
announcements. In 2021, much of this activity was conducted virtually due to the
limitation imposed by Covid-19 restrictions. During the year the Group conducted a
total of 747 investor interactions, with over 300 unique institutions. These interactions
involved a combination of the CEO, CFO, the Chairman, the Chief IR & Communications
Officer, Head of IR and other management as appropriate.
The quantitative analysis and qualitative
feedback were presented to the Board
during the year. The audits showed
positive progress in investor engagement
through the year with Entain performing
more positively than the benchmark
in all measures. In addition, Board
members listen in to results and trading
updates held by the Group for analysts
and institutional investors and can hear
directly the questions and comments
on Company performance and are
kept abreast of relevant newsflow and
commentary on the Company throughout
the year.
In addition to these meetings, the Group
also held three shareholder events
throughout the year. The first, held in April
2021 provided a detailed update on the
Group’s BetMGM joint venture. This was
followed in August with a capital markets
day, updating on the Group’s strategic
direction and opportunities, while in
November, the Group held its inaugural
Entain:Sustain sustainability showcase,
with a comprehensive presentation on the
Group ESG and sustainability strategy.
The Board receives feedback on
shareholder views in different ways,
including through the Chairman and
executive management who meet
regularly with shareholders throughout
the year. In the past year the investor
relations team conducted two feedback
and audit exercises to better understand
investors views based on a number of
satisfaction and confidence measures
– including perception of the Group’s
strategy, management and opportunities
as well as delivery versus expectations
and transparency.
Read more: page 99
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 38
Engaging with stakeholders continued
Suppliers
The Group works responsibly with its suppliers and regularly reviews its customer and
creditor payment policies. In 2021 we updated our Modern Slavery Statement to set out
the steps taken to prevent modern slavery in our business and various supply chains.
Our supplier interests range from fair trading, payment terms, success of the business
and long-term partnerships. The Group engages with suppliers by direct engagement,
supplier conferences and corporate responsibility and ethics reporting. The Board in its
duties receives regular reporting on retail performance and modern slavery.
Read more: page 111
The Community
As set out in the Company’s Sustainability Charter, Entain is committed to supporting
the communities in which it is based and operates. Through the Entain Foundation, the
Group has committed to investing £100m over five years on a range of projects and
good causes including safer betting and gaming measures, investment in grassroots
sport, reducing environmental impact, diversity in technology and projects with a clear
link to our local communities.
A flagship project of Entain Foundation is
the Group’s Pitching In grassroots sport
investment programme through which
the Entain Foundation supports The
Trident Leagues in the UK, made up of
245 clubs at the heart of England’s non-
league football pyramid. In November, the
Group announced its EnTrain initiative,
setting a target of positively impacting
one million lives through a range of
diversity in technology projects by the end
of the decade. The Company engages
through the publication of its ESG report
and employee-matched funding for
charity policy.
The Board has overall oversight of
corporate responsibility planning
and reporting as well as involvement
in corporate affairs strategy which
is delegated to the ESG Committee.
The ESG Committee is advised by the
executive ESG Steering Group and
also works with external consultants
which assist the operational units and
review the environmental and social
performance data.
Read more: pages 57 to 63
Entain plc | Annual Report 2021 Strategic report 39
Regulators
As a global operator and one of the world’s largest online betting and gaming companies,
Entain engages with a wide variety of stakeholders. These include regulators, investors,
trade associations, safer betting and gaming charities and customers. This engagement is
core to our ability to offer first class player protection through our cutting edge technology
and product platform, while upholding all licensing objectives, across multiple jurisdictions.
One of the key relationships we maintain is with our regulators. Liaising with our regulators
on an open and regular basis helps us to ensure that each of them are fully apprised of our
operating practices. Through this process we can help policymakers shape our industry
environment to best serve our stakeholder group whilst operating in a legal and fair way.
Governments and regulators
How we engage
UK Government departments.
UK Gambling Commission.
Governments and regulators
in territories where we hold
gaming licences.
US state licensing bodies.
National information commissioners.
Domestic and International
trade Associations.
What are their expectations?
Providing an enjoyable and
safe leisure experience.
Making sure we operate legally
and in a fair manner.
Minimising harm and maximising
player protection.
Ensuring that we protect the
young and the vulnerable.
Reducing crime and
unlawful behaviour.
Read more: pages 34 to 35
Ongoing dialogue with regulators,
domestic and international trade
associations and local authorities.
Responding to the UK Government’s
Review of the 2005 Gambling Act.
Numerous face-to-face meetings
bilaterally or as part of industry meetings.
Quarterly meetings, at a minimum,
between the UK Gambling Commission
and senior members of Entain’s
leadership team.
Detailing governance, risk management
and safer betting and gaming
strategies through submission to the
UK Gambling Commission Annual
Assurance Statement process.
Partnerships with the GB Health &
Safety Executive.
Engagement with the Nevada Gaming
Commission’s Compliance Committee
Hosting a Safer Betting and Gaming
Research Symposium with international
thought leaders, researchers
and academics.
Formal meetings with our regulators in
Gibraltar, Malta, the US and our other
global regulated jurisdictions.
Engage with the Department of Justice in
Ireland as it implements new Anti-Money
Laundering (“AML”) requirements.
Respond to formal regulatory
consultations including most recently
the call for evidence on affordability
by the UK Gambling Commission and
RG consultations in Spain and Sweden.
e-betting and gaming international
workshops in Spain, annual industry
meeting in Denmark and the ‘Licensing
information session’ in Germany.
Suspicious activity disclosed to relevant
national bodies and membership
of national match-fixing platforms
(eg Spain).
Engagement with regulatory authorities
in regulating markets via local
associations and advisors in the run up
to licensing (eg Netherlands, Brazil).
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 40
Sustainability
Our commitment to
sustainability
At Entain, we have proudly put sustainability on an equal footing to our growth
strategy. We embrace our role within society and want to take the lead on the
issues that matter to us – sustainability, diversity, and responsibility – with the
strongly held belief that the most sustainable business in our industry will be the
most successful. This is reflected in our Sustainability Charter, which outlines our
ESG leadership ambitions across four pillars.
Regulation
Responsibility
Corporate
Governance
People &
Communities
Commitments:
Only operate in regulated
markets by the end of 2023
Commitments:
Take the lead on safer
betting and gaming
Commitments:
Best-in class
corporate governance
2021 highlights:
Nearly 100% of revenues
from regulated markets
Exited three markets
with no clear path to a
sustainable and safe
regulated betting and
gaming industry
2021 highlights:
Successful roll-out of
our pioneering ARC™
player protection
programme across all UK
online products
Increased UK contributions
to RET to 0.5% of GGY
2021 highlights:
Jette Nygaard-Andersen
appointed as CEO – the
first female CEO of a
UK-listed betting and
gaming company
Commitments:
Best place to work
Net-zero greenhouse gas
(“GHG”) emissions by 2035
2021 highlights:
Launched Entrain
#1 in the All-In
Diversity Index
7% reduction of GHG
emissions from 2020, with
100% renewable energy in
the UK and ROI retail estate
Long-term sustainability = Long-term success
Entain plc | Annual Report 2021 Strategic report 41
Governance for long-term success
Environmental, Social and Governance (“ESG”) issues leadership
starts with strong governance. This is crucial to managing our non-
financial risks and opportunities effectively and efficiently, whilst
creating value for all our stakeholders. Our governance structure
is now fully embedded and has proved effective in managing
the increased scale, complexity, and expectations of the Group.
Our best-in-class Governance is overseen by Robert Hoskin as our
Chief Governance Officer.
The ESG Committee
The Board-level ESG Committee has ultimate responsibility for
safer betting and gaming, regulatory compliance, anti-money
laundering (“AML”) and counter-terrorism financing, anti-bribery
& corruption (“ABC”), health and safety, environmental impact,
data protection and diversity in the workplace. Chaired by Virginia
McDowell one of our Non-Executive Directors, the Committee
has four members and guides the business on all aspects of ESG
strategy, sets targets and monitors our performance.
The ESG Steering Group
The ESG Steering Group which meets on a monthly basis consists
of functional leaders from across the business, including Investor
Relations, Human Resources, Corporate Affairs, Legal, Health,
Safety & Security, Operations, and Communications. Convened by
our Head of ESG and Chaired by our Chief Governance Officer, the
Group oversees the implementation of our sustainability strategy.
Our governance
structure is now
fully embedded and
has proved effective
in managing the
increased scale,
complexity and
expectations of
the Group.”
Board
Strategy
ESG Committee
ESG steering group
Oversight
Operating units
Central functions
Co-ordination
Operational teams
Delivery
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 42
Sustainability continued
Our performance across ESG ratings providers
We’re proud to be a sector leader amongst many of the leading independent ESG ratings providers. The below table summarises our
performance, and improvement over time. We will continue to work tirelessly to further improve our ESG practices and performance,
and hope to see this reflected in these external assessments.
Agency
Rating
Evaluation
Score
Industry rank
Current
Previous
MSCI
ESG Score
AA (leader)
6.7
5.6
N/A
Sustainalytics
ESG Risk Rating
Medium risk
21.5
27
15/88 in the
Casinos & Gaming
Subindustry
ISS ESG
ESG Score
S&P Global
ESG Score
S&P Sustainability
Yearbook (Bronze class)
& DJSI Europe constituent
Refinitiv
ESG Score
Top quartile
C
67
83
C-
2nd highest decile
63
94th percentile
N/A
11/319
FTSE4Good
ESG Score
Inclusion in
FTSE4Good Index
3.4
4.1
87th percentile
CDP
Climate change score
Management
B-
D
Taking coordinated
action on climate
issues
Entain plc | Annual Report 2021 Strategic report 43
Showcasing our ESG leadership
at Entain:Sustain
In November 2021, we held an in-depth sustainability showcase
to highlight our approach to ESG and provide detail on a range
of sustainability related initiatives. Held as both a virtual and in-
person event in London, “Entain:Sustain” featured presentations
from the Group’s senior management, the independent Chair of
the Entain Foundation and academics from the Harvard Medical
School’s Division on Addiction. The day also included a number
of panel discussions, featuring a cross section of sustainability
experts. Alongside the main presentation the event also featured
an exhibition area with representatives from a range of the internal
Entain initiatives as well as the Group’s external community
investment partners such as Chance for Childhood and SportsAid.
At the event, we shared the first results and milestones from
the trials of ARC™, our pioneering, technology-led approach to
personalised player protection. We also announced the launch of
our EnTrain initiative, with its target to positively impact a million
people across the globe through providing greater diversity
in technology.
The inaugural event was attended by over 100 delegates in person,
with nearly 200 joining virtually. We plan to share our progress in
this format again in 2022.
ESG Materiality
We have a long-established discipline of assessing our material
ESG issues. These material issues are reviewed annually as part
of our internal ESG reporting process and updated based on any
strategic and operational changes, as well as developments in the
wider industry and society. Our current top material issues include:
Industry self-regulation (safer betting and gaming)
Protecting the young and the vulnerable through
working practices
Providing support for customers at risk and problem gamblers
Customer privacy and data security
Providing safe and responsible products, including safeguards
inherent in design
Promotion of safer betting and gaming
Talent attraction and retention
Preventing betting and gaming being used to support crime or
associated with crime
Diversity and equal opportunity
Towards the end of 2021, we commenced a project to conduct
a full-scale review of our materiality assessment framework.
This update will draw upon evolutions in materiality best practice,
and align our process and issues considered to the strategic
reorientation of our business and external landscape. The outputs
and process will inform our ESG strategy going forward, help us
to identify emerging ESG issues, and prioritise the material ESG
issues relevant to investors, as well as our wider stakeholders.
As part of this process, we will conduct a comprehensive
consultation across a broad range of our stakeholder groups
through surveys, interviews and desk-based research. The outputs
of our new materiality assessment will be presented in our 2022
Annual Report.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 44
Safer betting and gaming
It all starts with our seven principles
for safer betting and gaming:
1
2
3
4
5
6
7
Understand
the problem
To reduce gambling harm, we need to know
as much as possible about it. So we’re funding
research to help us find the best solutions.
Educate
stakeholders
We’re helping to educate thousands of
young people and professionals about the
potential risks of gambling harm and how to
avoid them.
Promote
responsible attitudes
Through advertising, marketing
and sponsorships we’re promoting
social responsibility.
Empower
customers
Within our products, we’re adding features
that help customers to gamble safely.
Within our processes, we’re using tech to
lead the way in detecting problematic play,
and within our industry we’re working to
collaborate and innovate.
Fund treatment for
those in need
We’re funding treatment and support for
people who suffer from gambling harm.
Champion responsible
product design
With ‘responsible design’ principles, we’re
making sure our products are safe as well
as fun.
Change ourselves
for the bettor
At Entain, safer betting and gaming
is everyone’s business. We’re making sure that
everyone we work with knows safer betting
and gaming is core to all that we do.
Read more about our Sustainability
Charter: page 40
Entain plc | Annual Report 2021 Strategic report 45
Our purpose is to bring moments of excitement to people’s lives.
We do this by putting our customers at the centre of everything we
do. This includes providing the best experience and taking the lead
on safer betting and gaming. Whilst the Gambling Commission
found that 99.7% of betting and gaming players in the UK use
these products safely, there are still customers that are at-risk of
harmful betting and gaming. Our Changing for the Bettor safer
betting and gaming strategy focuses on making Entain the safest
and most trusted betting and gaming environment in the world.
We have a vision to use data, technology, and evidence-based
insights to deliver the most sophisticated and effective player
protection. We deliver this vision as part of our ARC™” programme,
which we have advanced significantly in 2021. ARC™ cuts across
all strands of the Changing for the Bettor Strategy and positions
Entain as a leader in player protection. This section provides an
update on ARC™ and other leading initiatives that are delivering
on the seven pillars of our strategy.
Changing for the Bettor is fully aligned with the UK Gambling
Commission’s principal objectives to ensure that betting and
gaming is crime-free, fair, conducted openly, and protecting
children and other vulnerable persons. Our strategy is global, and
we pursue these objectives across all our operations.
The safer betting and gaming regulatory landscape continues to
evolve, and we work proactively with regulators globally to ensure
that regulation protects players from betting and gaming related
harm, without excessive restrictions that run the risk of driving
customers to the unregulated black market.
In the UK, we provided evidence and engagement as part of the
UK Government’s Gambling Act review. We continue to support
the review, which is a step towards creating the highest possible
regulatory standards. We co-ordinated the response with other
betting and gaming operators, together with our industry body, the
Betting and Gaming Council (“BGC”) to ensure the best possible
outcomes for players and the regulated marketplace.
In 2021, we continued to increase the proportion of UK Gross
Gaming Yield (“GGY”) that is contributed to organisations working
on Research, Education and Treatment (“RET”) to 0.5%, which
equated to £12.5m in 2021 – over seven times more than the
recommended requirement by the UK Gambling Commission.
The four largest operators in the UK have pledged to scale up RET
funding to 1% by 2023. Entain has gone further and committed
to reach this commitment one year earlier by 2022. These RET
contributions were provided to GambleAware, a grant-making
charity that is wholly independent and has a framework agreement
with the industry to deliver the National Strategy to Reduce
Gambling Harms.
In the US and the Americas, as a number of jurisdictions launch
regulated betting markets, we are scaling up our level of support of
safer betting and gaming organisations to ensure that the correct
support processes and pathways are established in these new
and growing markets. We continue to proactively engage with
regulators in these markets, including a digital roadshow. We have
also set up a US Regulatory Advisory Committee consisting
of Entain Non-Executive Director David Satz, three former US
regulators and members of the Entain Governance team, to act as
a sounding board to review Entain’s regulatory policies.
We have also implemented our commitment to include a safer
betting and gaming metric in our Group-wide annual bonus
scheme (see page 126). This year’s targets were assessed against
certain milestones of the delivery of the ARC™ programme.
In 2022, as the programmes mature, we will be shifting to
outcomes-based performance metrics – to ensure that our world-
leading player protection features are having a positive and
measurable impact on our customers.
Our leadership in this area was recognised at the end of the year
on both sides of the Atlantic with Entain being named Operator of
the Year at the 2021 EGR Operator Awards, the industry’s premier
awards event, and as Socially Responsible Operator of the Year at
the SBC Awards North America.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 46
Safer betting and gaming continued
Advanced Responsibility & Care™: Using data and
technology to provide sector-leading player protection
ARC™ is our pioneering approach to customer protection, by
limiting customer exposure to risk at an individual level. It switches
our player protection approach from reactive to proactive, and
allows players to receive the intervention they need in real time,
not after the fact. ARC™ represents a fundamental shift in our
approach to player protection, and is the driving force behind our
vision to be the go-to platform for safe play.
Using behavioural indicators, data science and analytics to assess
risk in betting and gaming, ARC™ works behind the scenes using
advanced artificial intelligence to learn and identify risks in player
behaviour so we can intervene before a problem develops.
In 2021, we commenced live trialling of ARC™ in the UK, and by the
end of 2021, ARC™ was rolled out across our entire platform for all
UK jurisdictions. In 2022, we will commence our work on adapting
and implementing ARC™ in some of our key markets outside of
the UK.
What does ARC™ involve?
Protector Model: Identifying high-risk behaviour in real time
Our leading Protector Model was launched in June 2021. It allows us
to identify and understand customers who need our support the most,
intervening with measures which are specific to their needs. ARC™
significantly extends the markers of protection beyond merely financial
markers to other behavioural characteristics that might suggest high-
risk playing. Our model draws upon 26 research-backed markers – over
three times more than in the past – adding further sophistication to
improve the accuracy of identifying high-risk behaviour. As a result, we
found that our predictor model is able to identify high-risk behaviour
with 80% accuracy.
These markers developed through our partnerships with leading
research institutions and consultancies, including lived experience
insights from EPIC Risk Management, Professor Mark Griffiths of
Nottingham Trent University, and Cambridge Health Alliance Division on
Addiction, a Harvard Medical School Faculty. Examples of these markers
include fluctuations in stake levels, erratic play during a single session
and signs that a player might be chasing losses.
Entain plc | Annual Report 2021 Strategic report Support for higher-risk players
Through a complete redesign of the user experience and customer
communications together with the deployment of two new
gambling controls (Play Break and Deposit Curfew) we have
been able to significantly increase the use of account controls.
The on-site interactive interceptors have meant that as well as
being able to intervene and speak to a customer quickly, we can
also recommend a gambling control for that customer based on
their specific play and needs. These interceptors have resulted in
more than 90% of our highest-risk players showing a reduction in
risky play.
As part of ARC™ we have also made step-change improvements
in some of our safer gambling tools, including a budget calculator
and improvements to our safer gambling help page – providing
players with seamless access to engaging and research-backed
safer gambling support and content.
Protect using real-time interventions
We are using advanced analytics real-time capabilities of our
Protector Model to identify customers who deposit more than they
usually would within a session of play. Once identified, a customer
will initially be advised that they are depositing more than normal
and offered the chance to reassess their depositing. If they do not
take action by setting a control themselves, we will step in and
prevent further deposits being made.
As a result, we are seeing positive actions by customers with a
reduction in higher deposits and a significant reduction in the
number of customers who raise their depositing. Encouragingly we
also see a 25% decrease in deposits following the initial interaction,
and a 75% decrease in the number of players who previously
would have continued to increase their spending. Almost all
customers return to their previous betting norms shortly after
intervention by ARC™. This means our messaging is positively
guiding their experience to remain safe.
47
Our plans for 2022
ARC™ is continually improving, with regular testing and expert
analysis to build on our initial successes and further enhance
player protection. In 2022, we will continue to build on the success
of ARC™, with an exciting roadmap of individualised features
and improved modelling that will enhance its effectiveness
and functionality.
Real-time tools: Over the coming months we will be implementing
more real-time tools including those concerning long session
lengths, declined deposits and large withdrawals.
Product-specific initiatives: We will also be implementing product-
specific initiatives that will provide player support at a more
granular level.
Real-time player identification: We are further developing our
Protector Model to enhance its real-time predictive nature and
potentially halt any risk-conducive behaviour before it becomes
a problem.
International: In addition, we will also introduce ARC™ into markets
beyond the UK, with a target to introduce it to nine new markets
in 2022. We will adopt a staged approach to the international
roll out, to ensure that ARC™ provides the same high level of
player protection, whilst adapting it to meet the unique regulatory,
cultural, and game-specific requirements in each market.
The effectiveness of ARC™ is linked to remuneration
The importance of ARC™ and our commitment to ESG and safer
gambling is reflected in our colleague and executive remuneration
structure. In 2021, 15% of the Group annual bonus scheme is
based on the business demonstrating that the ARC™ models are
successfully implemented, able to understand who the problem
gamblers are, and why they’re classified as such. To ensure the
credibility of the process, we commissioned EPIC Risk Management
to provide an independent review to determine whether we
reached our targets for the year.
In 2022, the ESG component of our Group annual bonus scheme
will continue to focus on ARC™, but will pivot to incentivise the
international roll-out of ARC™, and its ability to drive behavioural
change in customers – including the uptake of safer gambling tools
to medium and high-risk players.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 48
Safer betting and gaming continued
1 Understand the problem
and best solutions
A key focus for our Changing for the Bettor strategy is to
continually deepen our understanding of gambling-related
harm, disseminate this knowledge with the wider industry, and
incorporate this knowledge into our processes, policies and
culture. This work is catalysed by developing long-term research
partnerships with world-leading institutions in safer betting
and gaming.
Our five-year research collaboration with Cambridge Health
Alliance Division on Addiction is our flagship research programme,
where we have committed £5m over five years. You can read more
about this collaboration below.
In the US, we have partnered with the University of Nevada, Las
Vegas and their International Gaming Institute (“IGI”). In September
2021, we provided a founding grant to the IGI to establish a
pioneering betting and gaming research initiative which, for the
first time in the US, will combine scientific research with operational
expertise to apply best practice in responsible gambling, policy,
and health. Using a multidisciplinary approach, the IGI plans to
take a holistic look at all aspects of betting and gaming from
various perspectives, including problem gambling, responsible
gaming, public health, education, economic impacts, research,
and technology. The centre is planned to launch in 2022.
Entain plc | Annual Report 2021 Strategic report 49
Entain’s cutting edge research
collaborative with Cambridge Health
Alliance Division on Addiction, a
Harvard Medical School Faculty.
Our five-year research collaborative with the Division continues
to go from strength-to-strength. Now in its third year, we
have already contributed $3.2m to this cutting-edge research
programme that is having real-world impact. The programme
has progressed beyond expectations. It was originally expected
to produce three papers annually, but in two and a half years the
research teams have already submitted 11 papers for review
and has an additional four papers in active development for
submission to peer review.
Our ongoing support for the collaboration currently funds the
equivalent of eight full-time researchers: six researchers at the
doctoral level, a part-time researcher at the masters level, and
two researchers at the baccalaureate level. Entain not only
provides funding but gives access to anonymised data from
player records, ensuring that the research is based on real-life
data and behavioural patterns.
The ongoing projects with the Division fall under the four
categories below. This important research is published in
peer-reviewed and high-impact scientific research articles,
with worldwide circulation. The journals include Psychology
of Addictive Behaviors, PLOS One and International
Gambling Studies.
The programme has
progressed beyond
expectations.”
Grainne Hurst
Group Director of Corporate Affairs
Player data research projects
Using real-life, anonymised player records from Entain to
contribute to a growing body of knowledge revealing the
nature of actual online gambling. These projects help refine
our understanding of evidence-based markers of disordered
gambling and expand our search for potential markers.
Safer betting and gaming training projects
This in-depth understanding from the research is vital
to strengthening our culture, processes and policies.
We disseminate learnings from the research to employees
through various training activities. The Division conducted
reviews of 14 existing Entain employee training programmes,
two teach-in seminars with select Entain employees to assist
in the digestion and understanding of the findings, and the
creation of four research snapshots with graphical summaries
of published research.
Open science projects
Projects that relate to the Division’s and Entain’s commitment to
the highest standards, and upholding the principles of academic
freedom. In addition to engaging in open science practices for
these research projects, including research pre-registration and
data transparency, the Division has engaged in multiple projects
and papers to advance the field of gambling studies toward more
open science practices.
General research projects
These projects address important areas in the field of gambling
studies. So far, they have included a study on the state of the
literature about gambling and self-harm and understanding
gambling product safety features.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 50
Safer betting and gaming continued
2 Educate our key stakeholders
In the US, we supported EPIC to deliver 71 first-of-its-kind
education and advice sessions to groups that may be more
likely to experience problems with betting and gaming – such as
college and professional athletes. As sports betting is licensed
and launched in an increasing number of states, this programme
– sharing knowledge about harm prevention and sports betting
integrity is front and centre of conversations at a time when it is
needed most. We will continue to scale up this programme in 2022.
In the US, we launched the Gamble Responsibly America App.
The app – freely available on phone iPhone and Android – provides
a host of educational resources and tools to help and support
anyone facing potential issues with problem gambling. It is the
first app of its kind in the US that is from the outset available in
both English and Spanish. Gamble Responsibly America has been
endorsed by the American Gaming Association as one of the key
sources of problem and responsible gambling information.
We continue to partner with charities and other organisations to
support their important work in preventing vulnerable audiences
from potential betting and gaming harm.
In the UK, we supported EPIC’s Risk Management’s State Schools
programme. EPIC delivered impactful gambling harm awareness
sessions to 15,284 young people across 81 school visits in the
2020/21 academic year.
We support Young People’s Gambling Harm Prevention
Programme (“YGAM”) through GamCare and YGAM as part of our
involvement with Betting and Gaming Council. By 2024, YGAM and
GamCare aim to work with over 13,400 practitioners and partner
organisations, resulting in millions of young people aged 11-19
receiving at least one awareness session during their secondary
or further education. By the end of 2021, the programme delivered
training to 4,500 young people, with 90% of those participating
reporting that they better understand how to make safe choices
about betting and gaming, and where to get help if they were
experiencing problems.
In addition, we have supported YGAM to deliver their City & Guilds
Assured training to 3,895 professionals that work with young
people. This training is focused on identifying signs of harm and
signposting to the help and support available.
We also know that our customer services teams are an important
resource for our customers to learn more about safer betting and
gaming. In 2021, we streamlined our processes for these teams,
providing them with all customer due diligence, anti-money
laundering, affordability and player protection all within one
dashboard – allowing these representatives to provide informed
advice based on the customer’s individual circumstances.
Entain plc | Annual Report 2021 Strategic report 3 Promote responsible
attitudes
Our approach to promoting responsible attitudes is focused on
embedding these principles into our advertising and marketing.
Responsible attitudes to advertising and marketing start with
us, and we’re committed to ensuring that our activities in these
areas uphold both the letter and spirit of the relevant legislation,
regulations and industry Codes of Practice. We are a signatory of
the European Betting and Gaming Association’s Code of Conduct.
Our approach is guided by our Group Responsible Marketing
Policy (“Policy”). This Policy is sponsored by the Chief Governance
Officer – also a Director on the Group Board. The Policy applies to
all marketing activity undertaken by all brands within the Group,
and applies to all marketing activities and channels. The Policy
is complemented by internal guidelines for each market where
we operate, including examples of acceptable and unacceptable
marketing behaviour.
In the UK, we work with the industry via the Betting and Gaming
Council (“BGC”). This includes utilising our marketing budget and
airtime for responsible gambling initiatives.
We also use our reach and partnerships to bring safer betting
and gaming to life via compelling content. Through our partypoker
brand, we worked with the McLaren Formula 1 team to produce the
“Time to Pit” campaign. Starring McLaren F1 star Daniel Ricciardo,
the video and microsite draws parallels between racing and
betting and gaming, and the importance of knowing your limits and
staying in control. The “Time to Pit” campaign has been viewed
over 40,000 times.
51
4 Empower customers
As part of our ARC™ programme, we made step-changes in the
safer betting and gaming tools that we provide to customers
to empower them to be in control of their play. As part of the
enhanced customer journeys in ARC™, we are now able to
proactively provide players with tailored recommendations and
informative content based on their style of play. In addition,
we have implemented an improved budget calculator to help
customers understand a safe level to play based on their individual
circumstances, and recommendations on setting deposit limits.
These will be further enhanced in 2022 with the introduction
of our safer gambling questionnaire, which will help customers
understand whether a gambling control is needed and, if so,
which one. We will also continue to improve our real-time
interactions and intervention with customers, to provide them with
recommendations that empower them to put in place the tools that
help them to continue playing responsibly.
For those customers who wish to take time out altogether, we also
continued to promote the use of the Gamban software, which we
make freely available to all of our customers. Gamban allows users
to block betting and gaming websites and apps globally from a
user’s devices. We continue to take part in all relevant industry-
wide self-exclusion programmes in the markets where we operate.
In the US, Entain with joint-venture partner BetMGM are amongst
the first operators to have supported PlayPause, a project intended
to introduce cross-state self-exclusion.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 52
Safer betting and gaming continued
Fund treatment for those
in need
5
We work closely with Cognacity, a world leading mental health
organisation who are an approved LCCP Research Education and
Treatment (“RET”) provider, to offer additional support for those
customers requiring clinical diagnosis, or support/signposting
for treatment. The outcome of the assessment may result in a
referral to a fully funded residential treatment programme with
Cognacity@Leon House. Over the past two years, Entain funding
has enabled 154 comprehensive assessments and 100 individuals
to access support. This includes 67 individuals accessing three-
day intensive residential gambling treatment programme at Leon
House (or online during the Covid-19 pandemic) followed by
individual follow-up therapy and relapse prevention (a minimum
of six sessions per person, with a total of 258 one-to-one
sessions delivered).
This programme has had a significantly higher retention rate
than the national average, with 70% of those seeking support at
Cognacity@Leon House completing the course, and 86% reporting
abstinence from gambling at last observation (six or 12 months after
the programme).
We also provided funding to Gordon Moody’s online Gambling
Therapy service which has enabled the charity to reach an increasing
number of people needing support worldwide, with over five million
people accessing the service.
Champion responsible
product design
6
At the heart of championing responsible product design is our
groundbreaking ARC™ programme, which has catalysed a step
change in the way our online products are designed in order to
maximise player protection. Please refer to pages 46 to 47 for
information and an update on ARC™.
To be effective as an organisation in responsible product design,
we understand the need for engagement from the wider industry.
To do this, we engage directly via our involvement in the Betting
and Gaming Council (“BGC”) Game Design Working Group.
The group focuses on game characteristics, informed player choice,
enhancing control innovation and governance and continuous
improvements. In 2021, we implemented the BGC working group
Phase II principles on Game Design, including guidance on wins
below the stake line, and bonus game notifications.
Responsibility is also about protecting our customers’ data, which
is why we continue to roll out and implement our privacy-by-design
principles, which puts privacy at the centre of our product design
cycle early in its development. A full outline of our data privacy and
cybersecurity is included on page 65.
Entain plc | Annual Report 2021 Strategic report 53
7 Change ourselves for
the bettor
We strive to enable all colleagues, relevant suppliers, contractors,
and secondees to undertake training on safer betting and gaming,
with additional in-depth training that is tailored to role types. At the
end of 2021, 88% of colleagues were up to date on their mandatory
safer betting and gaming training, with 11,216 retail and 914
digital colleagues receiving face-to-face training specific to their
roles. In addition, our customer service teams received training
from our partners EPIC Risk Management, which empowered
them to spot the signs of risky behaviour and utilise behavioural
and interaction training to provide effective and empathetic
customer interactions.
Our Customer Ombudsman Director (“COD”), initially appointed
in 2020, continues to protect our customers in everything that
we do. The COD evaluates the quality of interactions with our
players, reviews how complaints are handled, and suggests ways
in which we can improve our service in a measured, consistent and
responsible manner whilst ensuring the business is protected from
unjustified complaints.
Safer betting and gaming
performance
2021
2020
2019
Cash and in-kind
contributions towards
responsible betting and
gaming initiatives
Customer interactions
regarding problem
gambling1,2
£12.9m
£9.7m
£3.6m
2,268,550 1,390,906
1,067,908
Customer complaints1,2
4,045
6,378
15,692
Customer complaints
specifically related to
a betting and gaming
transaction1,2
655
919
2,031
Self-exclusions made1,2,3
61,644
59,465
137,391
Robberies
36
45
110
Anti-social behaviour
4,216
4,760
6,065
Assaults
132
204
345
1. Data covers all UK licences.
2. 2020 and 2019 data have been restated to removed discontinued licences,
to be comparable to 2021 data.
3. Data only includes self-exclusions made via Entain’s own processes (eg via
customer services), and does not include third-party self-exclusion schemes such
as, for example, GAMSTOP (National Online Self-Exclusion Scheme) and the Multi
Operator Self Exclusion Scheme.
Read the Report of our ESG
Committee: pages 109-111
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 54
Covid-19
Putting our
colleagues and
customers first
Covid-19 continued throwing serious challenges at
businesses and societies in 2021 – and we were no
exception. We started the year suspending our entire retail
estate over three months. Throughout the ups and downs
of 2021, we spared no effort to continue protecting our
customers and colleagues.
Protecting our colleagues
Shop closure at the beginning of the 2021 meant that c.14,000
colleagues were placed on the UK Government’s furlough scheme.
As in 2020, we topped up furlough payments to full salary to
protect our staff’s financial safety. We continued investing
heavily in wellbeing initiatives to support colleagues whilst they
were placed on furlough, working from home, or returning to the
workplace post-lockdown. Our Employee Assistance Programme
provided staff with 24/7 support, including confidential counselling
and legal advice. We also delivered 11 wellbeing campaigns
across our global operations and trained 100 colleagues to become
Mental Health First Aiders. To read more about our Well-Me
strategy, please go to page 58.
During the first weeks of the pandemic, we rapidly learned that
the unprecedented levels of isolation and anxiety could put at-
risk online gamblers in a vulnerable position. We were one of the
first operators in 2020 to introduce additional safeguards, and
we continued in 2021 to bolster and adapt our player protection
programmes to the unique challenges brought by Covid-19.
We have given colleagues a platform to share their amazing
stories of working together whether that be raising money for
charity or keeping up the team spirit when working from home.
Protecting our customers during Covid-19
Entain Live, our annual all colleague event, went virtual this year,
with over 10,000 people joining to hear who we are and where
we’re heading with the launch of our new strategy, purpose
and vision.
Entain plc | Annual Report 2021 Strategic report 55
Protecting our customers during Covid-19
1.
Increase safer betting and gaming messages
across all sites and direct to all customers.
2.
Step up interventions if customers increase time
and spend beyond normal pre-crisis patterns.
3.
Actively promote deposit limits.
4.
Take action to ensure appropriate and responsible
advertising, including monitoring volume of
placements.
5.
Report all illegal, rogue advertising from black
market online operators.
6.
Enforce a one-strike-and-you’re-out policy where
affiliates breach pledges.
7.
Signpost help to GAMCARE and the National
Gambling Helpline and GamStop for self-exclusion.
8.
Ensure continued funding for Research Education
and Treatment (“RET”).
9.
Provide welfare checks and wellbeing help for staff.
10.
Support the UK government’s ‘National Effort’
with volunteers and facilities.
We increased responsible betting and gaming messaging on our
homepage and throughout all sites, with a new page providing
dedicated advice on keeping betting sensible and enjoyable during
the crisis. Our gaming brands also ran multi-channel advertising
and marketing campaigns to promote responsible betting and
gaming to our customers while they enjoy time on our sites.
We took our player protection interventions a step further,
introducing additional safeguarding measures to ensure that we
can rigorously monitor and protect anyone who may be vulnerable
at this time. This includes the introduction of two new Markers of
Protection indicators to our safer betting and gaming algorithm,
to factor in the evolving betting and gaming behaviour caused by
the pandemic, enabling the identification of potentially problematic
betting and gaming behaviour at an earlier stage.
In addition to promoting deposit limits as part of our safer betting
and gaming promotion, we introduced a new maximum stakes tool
across our slots brand.
We adopted the Betting and Gaming Council’s voluntary ban
on all UK broadcast gaming advertising, and its replacement
with responsible betting and gaming messaging during the
lockdown period.
We continued to work with local enforcement agencies if we
detect these issues, and encouraged colleagues to speak up if
they spot anything that breaches our employee Code of Conduct.
We implemented specific guidance and restrictions to all affiliates,
preventing them from referencing the pandemic or encouraging
excessive play due to boredom or isolation. This advice includes
a specific blacklist of banned terms.
We continued to promote GAMBAN throughout 2021.
In 2021, we increased our UK Gross Gaming Yield (“GGY”) that is
contributed to organisations working on the Research, Education
and Treatment (“RET”) to 0.5%.
Due to the pandemic, we brought forward our delivery of Well-
Me, Entain’s colleague wellbeing strategy, to provide additional
support for our staff. This is outlined above.
All stores implemented the NHS Track and Trace procedures.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 56
Covid-19 continued
Keeping our shops safe for everyone
We take every measure possible to ensure our colleagues and
customers are safe in our shops. After an initial investment of
over £3m in 2020, we continued to invest in measures to keep
our colleagues and customers safe. Our c.3,000 shops operate
with strict procedures in place – including limited shop occupancy
levels, signage and floor marking, machines and till dividers, and
personnel protective equipment. We continued our participation
in the UK’s NHS Track & Trace system, identifying and isolating
colleagues who may have been in contact with someone who had
tested positive for Covid-19.
We asked that colleagues who displayed symptoms, even minor,
self-isolate immediately. We opened a hotline to help local teams
deal with staff being unexpectedly off work.
Supporting our communities
The pandemic has never altered our commitment to supporting
communities. In 2021, we extended our long-term partnership with
SportsAid, increasing our total commitment to around £500,000
by 2024 and thereby supporting more up-and-coming athletes.
Through Pitching in, our multi-million investment programme,
we have continued promoting grassroot sports and delivering
vital support to sport clubs and organisations. We also launched
EnTrain, a global programme to increase access to, and diversity
within, technology. To read more about these initiatives and the
Entain Foundation, please go to pages 60 to 63.
Entain plc | Annual Report 2021 Strategic report Investing in people and communities
57
One of the key pillars of our Sustainability Charter is
to continue investing in our people and communities.
We understand the importance of recruiting, retaining, and
nurturing top talents from diverse backgrounds – especially
as our people are central to our Entain platform. We are
aware of our role in limiting global warming to no more than
1.5oC and we have pledged to be Net Zero by no later than
2035. We also contribute to the wider communities in which
we operate, supporting community organisation via the
Entain Foundation.
Best place to work
Everyone’s in the Game: Diversity and Inclusion at Entain
Our vision is to create a best place to work where our colleagues
feel valued, respected, and engaged. We want to revolutionise the
betting and gaming industry and become the technology employer
of choice for all talented people regardless of who they are.
2021 was the final year of the Everyone’s in the Game strategy.
During this time, we started building a more intersectional and
localised approach to diversity and inclusion. We are expanding
our focus beyond gender equality, as well as ensuring our
interventions are tailored to the context in which our colleagues
live. We launched an Inclusion Ambassadors programme, Entain
Nationals, and recruited 30 ambassadors across our global
footprint. Those colleagues help us to better understand local
challenges and to adapt and embed our programmes in each office.
We invested in educating Entain’s senior leaders on the importance
of diversity & inclusion. Our Inclusion Team engaged with each
Executive Committee (“ExCo”) member and their direct reports,
presenting the diversity demographics of their team and helping
them create tailored action plans for all business areas. We started
reaching to our wider colleague-base with the Global Inclusion
Learning, a new interactive and immersive training delivered by
50 facilitators across the business. Based on real-life testimonials
from our colleagues, the course discusses how to be more inclusive
in day-to-day business interactions and to challenge negative
behaviours. Our aim is for all our people to have completed the
programme by the end of 2022.
We also broadened our inclusion partnerships by teaming up
with global organisations. On International Women’s Day, we
announced our collaboration with Girls who Code, donating
$250,000 through the Entain Foundation to their work on
encouraging more young girls of diverse backgrounds to study
technology. In November, we launched our new multi-million-pound
global initiative called EnTrain. Our goal is to positively impact
the lives of one million people by 2030 by enabling access to
technology and changing the diversity within technology. To read
more about these partnerships, please see pages 60 to 62.
Recognising our ambition and that there is still much to do,
2022 will see us launching the next iteration of our Diversity &
Inclusion Strategy. We will deliver a six-month Reverse Mentoring
programme to help our leaders stay in touch with colleagues
and understand the lived experience of different groups. We are
partnering with Global Gaming Women and the All-In Diversity
Project to create ‘Lean In’ circles across Entain and connect
our women across the globe with each other and other women
within the broader technology and entertainment sectors.
We will continue improving our talent attraction, selection, and
development processes to remove bias and improve representation,
using well-tested methods such as diverse candidate slates
and interview panels, as well as gender neutralisation and bias
removal in job adverts. We will also be investing in the creation
of employee resource groups who will help us to better engage
and advocate for minority groups at Entain. Additionally we are
expanding our education and awareness-building efforts to cover
topics including allyship and the use of inclusive language to set
the foundations of creating a psychologically safe culture at Entain.
We will also work to improve our diversity data collection with a
new global self-declaration campaign, encouraging our colleagues
to disclose demographics beyond gender on our internal people
management system.
In the past three years, we have made
improvements across our gender diversity
at senior leadership level and across the
business. We are now moving towards a
more holistic approach to diversity, creating
a workplace where everyone belongs and
where access to opportunities is equal
regardless of who you are.”
Sophie Hawley
Head of Diversity, Inclusion, & Equality
Diversity at Entain
2021
2020
2019
Employees worldwide
25,554 23,573 24,614
Female employees
11,583 11,336 12,189
% female employees
45%
48%
50%
Part-time employees1
4,328
2,525
1,458
% part-time employees
17%
11%
6%
Employee Engagement Index
78%
78%
74%
Median hourly pay difference
between male and female colleagues
(Gender Pay Gap)2
Mean Hourly pay difference
between male and female colleagues
(Gender Pay Gap)2
5%
7%
4%
16%
15%
18%
Median bonus pay difference
between male and female colleagues2
60%
13%
36%
Mean bonus pay difference
between male and female colleagues2
63%
19%
83%
1. Data for 2019 and 2020 has been restated due to the merging of HR systems and the
harmonisation of the definition of part-time employees between these systems.
2. Data covers all UK colleagues. Data is base on a snapshot date of 5 April for the year
stated, as per the requirements of the UK’s Gender Pay Gap Reporting.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 58
Investing in people and communities continued
Gender Diversity at Entain
Well-Me: Wellbeing at Entain
Group Board
36%
Senior Managers
All Employees
35%
45%
)
%
6
3
(
1
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%
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%
8
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%
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Male
Female
I became a mental health
first aider as I believe that
everyone has a right to be
heard and that we all need to
be placing equal importance
on our mental health as we
do our physical health.”
Jo Bleasdale
Director of Internal Communications
The delivery of our well-me strategy went from strength-to-
strength in 2021, as we further embedded wellbeing in every
aspect of the employee lifecycle, from recruitment and onboarding
to rewards and development. Our Global Wellbeing Network
expanded across our offices to 13 wellbeing leads, who are
helping us to shape our global wellbeing strategy and adapt it to
local contexts.
In the past months, we continued to focus on supporting our
colleagues through the pandemic. We have offered Well-Me
booster sessions twice a week, alternating between yoga and
meditation, and provided an interactive toolkit with resources
to help our people adjust with returning to the workplace post
lockdown. Throughout the year we continued the roll-out of our
Mental Health First Aid (“MHFA”) programme, having recruited
and trained over 100 colleagues globally to act as the first point of
contact for people with mental health issues. Launched in 2020,
our Employee Assistance Programme (“EAP”) remains a major
source of support for our colleagues, with 8% of utilisation (a high
take-up rate when compared to similar-sized companies). We also
delivered 11 global campaigns on a variety of wellbeing topics,
achieving 130,000 views and interactions globally, a 35% increase
in engagement from 2020.
As part of our broader response to Covid-19, we launched
the Future of the Office – a strategic review of our working
practices, exploring how we can use experience of how office-
based colleagues adapted during lockdowns to benefit both our
business and our people. We have adopted greater flexibility in
our colleagues’ ability to work within the office or from a home-
setting. We are also looking at how we can radically change our
physical locations to create more inspiring and flexible workspaces,
while increasing the use of existing buildings and maximising
sustainability. As a first step, in April 2022, we will open a re-
imagined and renovated office in Stratford, London, where we
will provide a radically more creative and flexible workspace.
Through these developments, we want to deliver a more
personalised office experience which we believe will help us to
attract and retain the best talent.
Also, later this year, we will partner with Robertson Cooper to
undertake a Global Wellbeing Survey. This in-depth assessment
will help us to better understand the root causes of mental health
risks at Entain and to tailor future interventions in different areas of
the business. We will also focus on our ‘frontline’ people who are
providing support to colleagues and customers and are at greater
risk of mental health issues, developing an end-to-end process to
assist them in their roles.
75% of our colleagues think Entain
takes genuine interest in colleagues’
wellbeing.”
Jo Bleasdale
Director of Internal Communications
Entain plc | Annual Report 2021 Strategic report
59
Committed to colleague development
In 2021, we delivered important milestones in improving the way
people learn and grow at Entain. At the beginning of the year, we
introduced a new performance management strategy called Entain
& Perform. Our ambition was to harmonise how our colleagues
and teams are supported to set and meet their objectives.
The strategy has been underpinned by learning camps for all our
people managers and a new online tool where colleagues can
capture their goals, learnings, career conversations, and reviews.
In June, we also launched Learning Moments, a global learning
platform accessible to all our colleagues. Learning Moments
provides an online library with podcasts, articles, LinkedIn Learning
courses, getAbstract book summaries, and other video content.
The platform is a great example of self-led learning and has been
nominated for the 2022 RAD Innovation Award.
Best place to work performance
indicators
Customer Satisfaction
Central L&D investment
Average hours per employee of
training and development
Average amount spent per employee
on training and development
Average hours per manager of
training and development
Average amount spent per manager
on training and development
Employee turnover – all
Employee turnover – voluntary
Whistleblowing incidents reported
and investigated
Employee accidents
Employee reportable incidents
Public accidents
Public reportable incidents
2021
60%
2020
60%
£2.6m £1.2m
2019
60%
n/a
10.5
hours
£116
38.5
hours
£577
32%
25%
29
117
5
9
1
n/a
n/a
n/a
n/a
n/a
n/a
n/a
26%
17%
34
137
4
31
0
n/a
44%
33%
34
179
8
24
0
Our economic contributions
The Group employs a significant number of people across over
4,346 retail outlets and offices in more than 20 territories. As such,
our economic footprint is significant. In 2021, we paid £1.1bn in
taxes and levies across our countries of operation. This comes in
addition to the £579.1m we paid in employee wages and salaries.
Economic contributions
2021
2020
2019
Net gaming revenue
(NGR)
£3,886.3m £3,628.5m £3,632.7m
Underlying EBITDA
£881.7m
£843.1m
£761.4m
Total tax paid
£1,055m
£962m
£927m
Employee wages and
salaries
Payments to providers
of capital (interest &
dividends)
£579.1m
£524.0m
£671.2m
£63.9m
£62.8m
£267.1m
In January 2022, we launched Ennovate, our new global
innovation hub. Through Ennovate we are investing up to £100m
in innovation projects, start-up investments and collaborations
with UK, European and global partners. Our first lab in London
will open later in the first half of the year, with £40m specifically
of investment allocated to pursue UK-based innovation initiatives.
Ennovate reflects Entain’s ambition to be a global leader in
interactive entertainment and provide great products and
moments of excitement for customers. As the media, entertainment
and gaming sectors converge, we are adapting to offer customers
the richer experiences they now expect, with a greater variety
of content, immersive experiences, personalisation, and social
interaction which increase their enjoyment and engagement.
Through Ennovate we are partnering with cutting-edge technology
companies such as Verizon, BT, and Theta Labs, to develop
groundbreaking experiences for customers in gaming and
interactive entertainment.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 60
Investing in people and communities continued
Investing in Communities
We aim for our impact on society to be positive, whether in terms
of creating a great place to work, supporting communities, and
promoting diversity and healthy lifestyles, and entertainment.
We work with a range of partner organisations to bring this
ambition to life.
The Entain Foundation
We originally launched the Entain Foundation (“the Foundation”)
in September 2019 to help deliver the Group’s ambition to take the
lead on safer betting and gaming and support the communities
in which we operate. In addition to the main global Foundation,
we also operate the Entain Foundation US, a dedicated US-based
not-for-profit. In November 2020, the Group and its renamed
Entain Foundation, which now enjoys registered charitable status,
committed to investing £100m to good causes over five years.
The work of the Foundation supports the Group’s pioneering
Sustainability Charter and wider ESG initiatives, and plays an
integral role in delivering against the Charter’s pillars of People and
Communities, and Responsibility. The Foundation’s key areas of
focus are safer betting and gaming, grassroots sports, diversity in
technology and projects with a clear link to where we operate.
How our social impact focus supports the Entain Sustainability Charter
Regulation
r
e
t
r
a
h
c
y
t
i
l
i
Responsibility
Corporate
Governance
People &
Communities
Only operate in regulated
markets by 2023.
Taking the lead on
responsible betting
and gaming.
Best-in-class standards
of corporate governance.
Creating the best place to
work, net-zero emissions
by 2035, and support the
communities where we
operate.
i
b
a
n
a
t
s
u
s
p
u
o
r
g
n
a
t
n
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i
s
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c
o
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f
o
s
a
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Safer betting and gaming
Grassroots, women’s
and disability sports
Diversity in technology
We support partner
organisations that are
engaged in research,
education and treatment of
problem gambling to bolster
our internal Changing for
the Better safer betting and
gaming strategy.
Sports and sports betting
are what we do. We give
back by supporting the next
crop of athletes, and work
with organisations that
are making sport inclusive
to bring everyone into
the game.
As a technology company
at heart, we are supporting
organisations that are
working with young people
that may currently be
underrepresented in the tech
talent pool. Promoting tech
careers and ensuring that
the future talent pipeline is
inclusive, making sure that
Everyone’s in the Game.
Projects in the
communities where
we operate
Our operations are truly
global – embedded in
communities in more than
15 countries.
Entain plc | Annual Report 2021 Strategic report
61
Supporting
academic
research
Raising
awareness
amongst key
stakeholders
Providing
treatment for
those who
need it
Research papers
Training
Support and assessments
Building credible institutions
Outreach and awareness training
Intensive treatment
Generating interest in advance
methods of gambling research
Signposting to high-
quality resources
Improving retention
Using findings in our own operations
Focus on safer betting and gaming
As noted above, within our seven principles of safer betting
and gaming (see pages 44 to 53), the Foundation’s top priority
is to further our promotion of safer betting and gaming and our
contributions to partner organisations support the delivery of the
Group’s Changing for the Bettor safer betting and gaming strategy.
Our work with our partner organisations supports this strategy
across three key focus areas.
As part of our operations in the UK, in 2021 we contributed 0.5%
of our Gross Gaming Yield (“GGY”) to support Research, Education
and Treatment (“RET”) of problem gambling, this will rise to 0.75%
in 2022. This funding is provided directly to GambleAware – a
wholly independent grant-making charity that has a framework
agreement amongst the Industry to deliver the National Strategy to
Reduce Gambling Harms.
In addition to these contributions, we work with a range of
organisations that are leading on groundbreaking safer betting and
gaming initiatives and research. We also leverage the expertise of
our academic partners to ensure our own player protection culture,
processes and decisions are informed by scientific research and
lived experience.
In the USA, as an increasing number of states launch regulated
betting markets, we are also scaling up our level of support of
safer gambling organisations to ensure that the correct support
processes and pathways are established in these new and
growing markets.
Promoting grassroots sport
As a business Entain is closely linked to the world of sport, and
we believe an important way we can make impactful contribution
is by investing at the grassroots level. The Foundation currently
supports two key flagship projects in the UK as well initiatives in
Greece and Colombia. In 2022, we will be expanding this support
to projects internationally.
Pitching In
Via Pitching In, our the multi-million-pound, multi-year, investment
programme, the Foundation is partnered with the with the
Isthmian, Northern Premier and Southern Leagues – collectively
known as The Trident Leagues – which make-up levels seven
and eight of the English football leagues pyramid. The Trident
Leagues, which trace their roots back to the nineteenth century,
are at the heart of the national game, with 245 clubs and 15,000
players registered across the three leagues in many villages, towns
and cities of England and Wales. Under the Pitching In banner –
avoiding any promotion of our betting brands – Entain not only
supports running of the Trident Leagues, but has also established
the Trident Community Fund, which enables clubs to receive
funding to run community engagement projects.
In 2022 a key focus for the programme is to facilitate and
encourage community volunteers to do some pitching in of their
own and contribute their time and effort. A Pitching In online
volunteering hub will launch in Q1, providing a national framework
to connect volunteers with their local club. The scheme will also
encourage UK based Entain colleagues to connect with their local
clubs to further strengthen community ties.
SportsAid
Entain has been partnered with SportsAid since 2018. SportsAid is
the only national charity in the UK of its kind, helping young British
athletes aspiring to be the country’s next Olympic, Paralympic,
Commonwealth and world champions. Through the partnership
Entain supports over 50 athletes each year by providing them
with a financial award to help towards training, equipment and
competition costs, as well as personal development training.
In 2021 we extended our long-term partnership with SportsAid
through to the Paris 2024 Olympic and Paralympic Games,
doubling the financial backing made thus far and increasing our
total commitment to around £500,000 by 2024, thereby ensuring
more up-and-coming athletes benefit from the programme.
SportsAid also provides access to a variety of online workshops
for athletes and their parents, online access to Olympians and
Paralympians, and attendance at the House of Commons
(where MPs meet athletes). These athletes are Great Britain’s
brightest sporting prospects. They are nominated to SportsAid
by the national governing bodies of more than 60 sports.
SportsAid found that 61% (or 242 athletes) of those selected
to represent Team GB at the Tokyo 2020 Olympic Games have
received financial support and recognition from the charity during
their careers. Through our multi-year strategic partnership,
Entain’s contributions to SportsAid provides 50 up and coming
athletes each year with financial support, recognition and personal
development opportunities.
Promoting diversity in technology
In November 2021, we launched EnTrain, a global programme to
promote increased access to, and diversity within, technology.
We have set the ambitious target for EnTrain to positively impact
the lives of one million people around the world – either directly or
through their families and dependants – by 2030.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
62
Investing in people and communities continued
I started out playing for Wealdstone
FC before joining Coventry City so I
understand how important funding is to
the non-league game. Grassroots football
is facing huge challenges at the moment
and many clubs are struggling to stay
afloat. Entain’s Pitching In investment will
help make a big difference to hundreds
of clubs and thousands of players across
the country.”
Stuart Pearce
Pitching In Ambassador
Two organisations that Entain has worked with under our
EnTrain initiative are Girls Who Code and the Tech Girls
Movement Foundation:
Girls Who Code
Girls Who Code is an international non-profit organisation working
to close the gender gap in technology and change the image of
what a programmer looks like and does. With their initiatives,
Girls Who Code are leading the movement to inspire, educate,
and equip young women with the computing skills to pursue 21st
century opportunities.
In March 2021, we announced that we are providing $250,000
of funding to the organisation to expand its global pipeline of
programmes to spark girls’ interest in technology. This pipeline
includes free coding clubs, at home modules, virtual mentoring,
panels and workshops as well as career fairs. Through these
programmes, Girls Who Code has reached more than 300,000
young women globally and has nearly 90,000 college-aged
alumni, who are majoring in Computer Science and related fields.
Alumni are 15 times more likely to study such degrees, when
compared to the US average for female enrolments. Over half
of the girls served by Girls Who Code are from historically
underrepresented groups.
The Tech Girls Movement Foundation
As new and future generations face an increasingly digital world,
the opportunity to level the playing field by diversifying human
capital, reorienting, and reskilling the workforce has never been
more pressing. As of July 2021, over 40% of the world’s population
did not have access to the internet, which, if not addressed, could
lead to a digital skills gap that results in a loss of $11.5trn by
2028. As a company that develops cutting-edge technology, we’re
determined to use our position to provide opportunities that will
help to address this picture. The EnTrain programme is comprised
of four core initiatives:
The Tech Girls Movement Foundation was founded in Queensland,
Australia in 2014 with the aim of actively challenging gender
stereotypes that limit girls’ participation in Science, Technology,
Engineering, and Mathematics (“STEM”) subjects. Their vision
is to create a society in which girls confidently lead in STEM
entrepreneurship and contribute to their community and
the economy.
Through support from the Entain Foundation, Tech Girls Movement
Foundation was able to provide free competition places for girls
who faced financial barriers to participating.
Entain Academy: Supplying transformative tech training for
the next generation;
Entain Scholarships: Providing the platform for a diverse
selection of candidates to become digital pioneers;
Entain Apprenticeships: Expanding internal and external
apprenticeship schemes with new and existing partners.
Enabling our apprenticeship partners to provide technology
courses for people in developing countries; and
Entain Partnerships: Building on our existing partnerships
with organisations including Girls Who Code and Chance for
Childhood and forming new collaborations with charities and
non-profit organisations to improve diversity and increase
access to technology for educational purposes.
Entain plc | Annual Report 2021 Strategic report 63
Reduce environmental Impact
2021 has been pivotal in our efforts to address climate change and
reduce our environmental impact. At the start of 2021, we pledged
to become net zero for greenhouse gas emissions (GHG emissions)
by no later than 2035, 15 years ahead of the 2050 target under
the Paris Agreement. As part of this, we are formally submitting
a near-term science-based target to the Science Based Target
initiative (“SBTi”) which will be effective from 2022. This is the next
step on our journey to net zero, and we will outline our pathway
to achieving our ambitious target in our upcoming ESG Report.
We successfully increased our score to CDP’s Climate Change
questionnaire, moving from a D in 2020 to a B-. We also achieved
our first ISO140001:2015 Environmental Management System
accreditation, covering a number of our UK offices, stadia, and
c.3,000 shops. In 2022, we will expand this coverage across our UK
operations and, in later years, to our global operations.
In the UK all of our electricity supply contracts for our shops and
greyhound stadia have switched over to 100% renewable energy.
With the renewable supply we already used in the Republic
of Ireland, this amounts to 71% of the Group’s total electricity
consumption being actively sourced from renewables, and a
reduction of over 4,000 tons of our market-based emissions
compared to 2020.
We continued to support climate mitigation beyond our own value
chain by partnering with an independent platform to support tree
planting and reforestation projects globally. By the end of the first
half of 2022 we will have planted one million trees in our Entain
forest. By 2032 it is forecast that these trees with sequester 21,000
tonnes of CO2e from the atmosphere and provide employment
and training for local people as well as localised environmental
and social benefits. We will continue to evolve our approach to
offsetting in line with best practice.
We are also working to understand and reduce emissions
throughout our value chain. We worked with the Carbon Trust to
conduct a screening assessment of our Scope 3 emissions, which
we will publicly report for the first time in our 2022 ESG Report.
We also achieved Level 1 Certification of the Carbon Trust Supply
Chain Standard, an important first step in decarbonising our value
chain. With this exercise, we’ve confirmed that Entain’s Scope 3
emissions make up 96% of our total value chain emissions. We’ve
also mapped hotspots across our value chain, identifying where
carbon emissions are greatest. We’re now planning to engage with
those these key suppliers and value chain partners that represent
75% of our value chain emissions.
Our colleagues also play an important role in our decarbonisation
strategy, and we make sure to bring them along in this journey.
Established in 2019, our Green Ambassadors Network has grown
globally to 120 colleagues who help us find practical ways to
improve environmental efficiency in the workplace. With their
support and guidance, we’ve piloted two environmental awareness
campaigns in 2021: Make Today Matter, to communicate our Net
Zero target across the organisation, and It’s a Turn-Off, to drive
positive behaviour change around energy consumption in our
operations. As more colleagues return to the workplace this year,
we will focus our awareness activities on waste and recycling.
We have also set up a Net Zero Action Group, convening senior
colleagues across departments to develop and accelerate our
decarbonisation strategy with practical measures which can be
implemented throughout our global operations.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 64
Task Force for Climate-related Financial
Disclosures (“TCFD”) Statement
Entain is a supporter of the recommendations of the Task Force for Climate-related Financial
Disclosures (“TCFD”), and it is committed to implementing the TCFD recommendations. We
also welcome the introduction of the FCA requirements for UK Premium Listed Companies to
report in line with the TCFD recommendations.
In this section, we outline our approach to climate-related risks and opportunities. This
statement is in line with the four pillars of the recommendations: Governance, Strategy, Risk
Management and Metrics and Targets. Whilst we discuss in general terms the resilience of
our strategy and approach considering different climate-related scenarios, we plan to further
specify this and include quantitative measures in future years.
Governance
The Group Board is ultimately
responsible for climate-related risks and
opportunities, with overall ownership
of this agenda sitting driven by our
CEO. Responsibility for identifying and
managing risk is delegated to both the
Board-level ESG Committee and the
Audit Committee, who are accountable
for monitoring our progress against
targets, and ensuring climate-related
risks are adequately addressed,
respectively. The involvement of two
Board Committees reflects the inter-
related nature of climate-related risks
and opportunities, and our commitment
to climate action. Climate-related issues
are raised at least quarterly with the
ESG Committee.
These Committees are supported by the
ESG Steering Committee (which reports
to the Board ESG Committee) and our
Net Zero Action Group to challenge
and advise on the prioritisation and
mitigation of climate-related risks and
opportunities, as well as implement our
climate strategy. The Risk Committee,
which reports to the Audit Committee
and is chaired by Rob Wood, has
operational responsibility for managing
risk within the Group, including climate-
related risks.
Strategy
We identify climate-related risks as
part of our Group risk management
system. Through this process, we have
identified both physical and transition
risks and opportunities, with the key
risks explained below. As a result of this
assessment, no climate-related risks
have been identified as principal risks
to the Group, and they are addressed at
the functional and divisional levels.
Physical risks
As the operator of a large retail estate
and four stadia in the UK and ROI, there
is the risk that climate change will bring
about increased exposure of these sites
to extreme weather events in the longer
term, especially flooding. This could cause
shop closures and increased insurance
claims liability. This exposure varies
across our estate, based on geography.
Given the geographical dispersion of our
estate, as well as the diversification of our
business into digital, this risk has not yet
been identified as a principal risk.
Transition risks
As part of the transition to a lower-carbon
economy, we expect an increase in the
requirements for and expectations on
our organisation to accurately report
and reduce greenhouse gas emissions.
We are managing this risk through our
ambitious climate commitments – to
reduce our greenhouse gas emissions
in line with a science-based 1.5 degree
scenario, and reach net-zero emissions by
2035. In 2022, we also purchased 100%
renewable electricity across our UK and
Irish retail estate, as well as many of our
major offices. Globally, over 70% of our
electricity purchased was from renewable
energy contracts. This provides us with
an opportunity to improve our trust and
reputation with key stakeholders and
realise cost savings through our energy
efficiency improvements as part of our
ongoing shop refurbishment scheme.
We have also undertaken a screening
assessment of our Scope 3 emissions,
which is outlined in this report. We have
started to engage our key suppliers
to support them in reducing their own
emissions. We will start to report
systematically on our Scope 3 emissions
in the coming years, improving the
data quality and coverage of primary
information obtained directly from our
value chain partners.
Risk management
The process for identifying, assessing,
and managing climate-related risks
is integrated into our overall risk
management and governance framework,
which is outlined on pages 78 to 85.
As part of this process, mitigation
and management of specific risks is
delegated to the relevant divisional or
functional heads.
At the end of 2021, we initiated a project
to review the climate-related risks
identified in our risk management process.
This will involve an in-depth review of
the current risks identified, as well as
considering future climate scenarios, in
line with the TCFD recommendations.
In Q2 of 2022, we will convene leaders
across Entain to carefully consider three
climate change scenarios describing
a temperature rise of 1.5°C, 2.0°C,
and 3.0°C compared to pre-industrial
levels. This exercise will enable us to
sense check our current risks, identify
additional risks and opportunities, and
communicate their impact on the Group
and our stakeholders. The project is being
championed by our CEO, with the output
informing our next TCFD disclosure.
By involving senior leaders across the
Group in this work, we hope to encourage
holistic thinking about climate-related risk.
We want our leaders to provide guidance
and support for further incorporating
climate-related risk identification and
management into the operational risk
registers of each division and function.
As the time horizons for climate-related
risks tend to span longer into the future
than many other risks, we will implement
a parallel process to ensure that longer
term risks are formally considered as part
of our climate and business strategies.
Entain plc | Annual Report 2021 Strategic report 65
Targets and metrics
In the table below, we outline our greenhouse gas emissions, with a further breakdown to be provided in our upcoming ESG report.
We also report on our global energy consumption, and the percentage of electricity purchased on renewable energy contracts.
These metrics are used to monitor our performance in managing our transition risks, and to monitor our progress against our science-
based greenhouse gas reduction targets.
Given the significance of this area, the reputational risk of inaccurate reporting, and the need for high-quality ESG data, we
commissioned the Carbon Trust to assure our Scope 1, 2 and business travel data. This assurance has taken place for our 2019 and
2020 data, with our 2021 data to be assured in 2022.
Environmental KPIs, including Streamlined Energy and Carbon Reporting (SECR) data
Total energy consumption (kWh)
UK
Rest of the world (“ROW”)
Total GHG emissions – direct and indirect (tonnes CO2e)3,4
UK
Rest of the world
Total GHG emissions intensity per employee (tonnes CO2e/headcount)3,4
Total direct emissions (Scope 1) – direct (tCO2e)3,4
Total indirect emissions (Scope 2) – indirect (tCO2e)3,4
% of purchased electricity from renewable sources
Water withdrawal (cubic metres)5
20211
112,035,246
86,962,233
25,073,014
26,960
18,679
8,281
1.07
1,998
24,962
71%
231,789
20202
111,755,270
92,776,583
18,978,687
28,958
21,497
7,461
1.21
822
28,136
59%
252,345
20192
149,976,498
123,723,097
26,253,400
41,353
29,331
12,022
1.68
3,083
38,270
5%
527,694
1. Estimates for the full 2021 reporting year were still being finalised at the time of reporting, and may be revised in subsequent reporting.
2. Data from previous years has been restated based on minor adjustments that arose as part of Entain’s GHG independent data validation by the Carbon Trust.
3. Emissions are calculated using the GHG Protocol Corporate Accounting and Reporting Standard. Consumption data has been converted to GHG emissions using 2021 BEIS
emissions factors and 2021 IEA emissions factors for non-UK grid electricity. We have excluded fugitive emissions from refrigerants, as they have been deemed de minimis in
previous years. Emissions reported above are calculated using the location-based method, using an operational control boundary.
4. GHG emissions data has been calculated based on primary data covering 100% of UK operations, and 95% of global operations, based on headcount. The GHG data is
scaled up to estimate the total global GHG emissions and energy consumption.
5. All water withdrawn is sourced from municipal water supplies. Water data includes our operations in the following countries: Austria, Belgium, Bulgaria, Gibraltar, India,
Ireland, Israel, Philippines, UK, Uruguay. This makes up 88% of Entain’s global headcount. Note that this data is not scaled up to estimate the total global consumption,
but reported consistently for the operations where data is available.
Our Commitment to Human Rights
We are committed to act morally, honestly, openly
and with integrity in everything we do. We firmly
believe that a robust approach to protect human
rights and prevent modern slavery is one way we
can evidence this, as well as demonstrating our
positive contribution to the communities in which we
work and to society at large. We have identified that
the two main potential risk areas for our business
are in the recruitment and onboarding of staff and in
our broader our supply chain.
In 2021 we partnered with Unseen, a UK-based
charity fighting modern slavery, to strengthen our
procurement processes and policies. Unseen helped
us revise our Supplier Code of Conduct, providing
greater emphasis on human rights standards within
it. Every supplier must now approve the updated
Code and share their anti-bribery and corruption
policy before they can start doing business with us.
Unseen also helped us to upskill our procurement,
HR, and property colleagues, delivering bespoke, in-
depth training courses on modern slavery. This was
rolled out to all staff with a mandatory online
training, completed by 78% colleagues in 2021.
In 2022, we will continue working with Unseen
and implementing their recommendations. We will
reinforce our supplier due diligence processes, with
additional checks for high-risk suppliers at the
onboarding stage and throughout the duration of
the contract. We are also conducting a review of
our supplier questionnaire to refine our supplier risk
assessment and escalation process. Following this
process we expect to introduce more stringent
environmental and social clauses to our standard
Terms & Conditions.
Data Privacy & Cybersecurity
Safeguarding our customer and corporate information remains a top
priority for Entain, as our betting and gaming interactive entertainment
offer continues to expand. Our commitment is reflected in a growing
headcount and the robust governance procedures we have implemented.
Our Chief Privacy Officer (who also holds the position of Group Data
Protection Officer) and our Chief Security Officer provide regular updates to
the Board and deliver deep-dive sessions to our Executive Committee.
In 2021, we further embedded our Group-wide Data Protection and Data
Retention policies, which apply to everyone working for Entain, including
agency staff and contractors. 21,495 colleagues completed the annual
mandatory GDPR training, and data owners have been identified across all
departments to implement a four-stage data retention programme.
Data privacy is also built into the development of our safer betting and
gaming initiatives, including in our new ARC™ programme. Whilst we use
data-driven technologies such as Artificial Intelligence (“AI”) to create a
safe environment for our players, we also have a duty to meet their privacy
expectations and we’re working hard to strike that balance. Our data
privacy experts are part of the ARC™ Steering Committee, through which
they provide technical guidance to the safer betting and gaming and
customer services teams. Over the year, these teams undertook a Data
Privacy Impact Assessment (“DPIA”) programme, helping them to address
privacy-by-design requirements and implement appropriate disclosure
into privacy notices. We have also developed an AI and Data Ethics
Charter, overseen by the ESG Committee, which defines our principles on
the responsible use of AI to ensure it is used in the best interests of our
customers and employees.
Our investment in cybersecurity continues to grow, with our team’s
headcount increasing by 33% in 2021. We created a Cybersecurity Crisis
Management Plan, which guides our response across all functions and
business units in case of a critical cybersecurity breach. We’ve also initiated
a new programme to reduce data privacy and cybersecurity risks in
mergers & acquisitions (“M&A”), bolstering due diligence on M&A targets
and speeding up the integration process. Businesses joining the Group must
now align with our data privacy and cybersecurity requirements within six
months of acquisition.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 66
Business Review
Financial Results and the use of Non-GAAP measures
The Group’s statutory financial information is prepared in accordance with International Financial Reporting Standards (“IFRS”) and IFRS
Interpretations Committee (“IFRS IC”) pronouncements as adopted for use in the European Union. In addition to the statutory information
provided, management has also provided additional information in the form of Contribution, EBITDAR and EBITDA as these metrics are
industry standard KPIs which help facilitate the understanding of the Group’s performance in comparison to its peers. A full reconciliation
of these non-GAAP measures is provided within the Income Statement and supporting memo.
The Group’s operating segments are now aggregated into five reportable segments; Online, Retail, New Opportunities, Other and
Corporate. This represents a change from 2020 with our former UK and European Retail segments now combined to form one Retail
segment and the introduction of a New Opportunities segment to reflect the investment strategy in innovation and new products and
verticals such as esports wagering products as announced in August 2021. Both changes are in line with the changes in the Group’s
reporting to the executive management team (“CODM”), with the Retail consolidation also a product of our Retail segment displaying
consistent trading patterns and risk profiles across territories and all Retail businesses now reporting into the Deputy Chief Executive
Officer/Chief Financial Officer.
Group
Year ended 31 December
NGR
VAT/GST
Revenue
Gross profit
Contribution
Operating costs
Underlying EBITDAR4
Rent and associated costs
Underlying EBITDA4
Share-based payments
Underlying depreciation and amortisation
Share of JV income
Underlying operating profit5
Reported Results1,2:
CC3
%
8%
16%
9%
Reported results1,2
2021
£m
3,886.3
(56.3)
3,830.0
2,435.8
1,851.5
(952.7)
898.8
(17.1)
881.7
(12.3)
(222.8)
(162.5)
484.1
2020
£m
3,628.5
(66.9)
3,561.6
2,308.6
1,740.2
(878.1)
862.1
(19.0)
843.1
(14.8)
(238.6)
(60.2)
529.5
Change
%
7%
16%
8%
6%
6%
(8%)
4%
10%
5%
17%
7%
(170%)
(9%)
While 2021 was another year disrupted by Covid-19 and temporary shop closures, the Group still delivered strong underlying year on
year growth in NGR of +7% (+8%cc). Online NGR was +28% (+27%cc) ahead in the first half as Online benefited from Retail customers
playing Online. Covid-19 restrictions on Retail saw all of our Retail stores closed in Q1 and extended closures in Europe continuing into
Q2, resulting in H1 NGR in Retail -46%cc behind the prior year. H2 saw a return to more normal trading patterns with Retail open and
Covid-19 restrictions abating. Resulting Retail NGR was +20%cc ahead in H2 with Online NGR a more modest 1%cc ahead as it lapped
Covid-19 restrictions in H2 2020. While Covid-19 restrictions have distorted the year on year comparisons, pleasingly we are exiting
2021 with Online NGR in Q4 +29% ahead of 2019 (+14% two year CAGR) and Retail over 90% of pre Covid-19 NGR on a like-for-like
basis. Resulting full year NGR was +13%cc ahead in Online but -7%cc (-3%cc LFL) behind in Retail.
Contribution for the year of £1,851.5m was 6% higher than last year, representing a contribution margin of 47.6%, -0.4pp lower than last
year due to a higher Online segmental mix and the implementation of gaming taxes in Germany. Operating costs (before rent) were 8%
higher due to acquisitions and investment in our product, technology and people, leaving underlying EBITDA4 of £881.7m, +5% higher
than 2020.
Share based payment charges were £2.5m lower than last year, while underlying depreciation and amortisation was 7% lower as the
impact of historic M&A on depreciation starts to reduce. Share of JV losses of £162.5m includes a loss of £161.9m relating to BetMGM,
which is in line with expectations. Group underlying operating profit5 was -9% behind 2020. After separately disclosed items of £128.3m
excluding £5.8m recorded in interest (2020: £170.6m excluding £5.3m recorded in interest), operating profit was £355.8m, a decrease of
£3.1m on 2020.
Entain plc | Annual Report 2021 Strategic report 67
CC3
%
21%
–
22%
6%
68%
13%
16%
14%
2021
£m
14,165.9
12.7%
1,444.3
1,595.9
26.3
3,066.5
(56.3)
3,010.2
1,871.5
1,294.7
42.2%
(393.7)
901.0
(2.0)
899.0
(5.3)
(116.7)
(1.0)
776.0
Reported results1,2
2020
£m
Change
%
11,780.9
12.7%
1,196.8
1,534.8
15.9
2,747.5
(66.9)
2,680.6
1,708.7
1,147.4
41.8%
(342.5)
804.9
(1.4)
803.5
(4.3)
(120.1)
0.1
679.2
20%
–
21%
4%
65%
12%
16%
12%
10%
13%
0.4pp
(15%)
12%
(43%)
12%
(23%)
3%
n/m
14%
Online
Year ended 31 December
Sports wagers
Sports margin
Sports NGR
Gaming NGR
B2B NGR
Total NGR
VAT/GST
Revenue
Gross profit
Contribution
Contribution margin
Operating costs
Underlying EBITDAR4
Rent and associated costs
Underlying EBITDA4
Share based payments
Underlying depreciation and amortisation
Share of JV (loss)/income
Underlying operating profit5
Reported Results1,2:
Our Online business continues to go from strength to strength attracting new customers in all of our major markets through the provision
of high quality products, a market leading approach to player safety and an excellent customer experience. NGR for the year was up
12% (+13%cc) year on year, representing a two year CAGR of +20%cc. While our long run of quarterly double-digit growth (at constant
currency) took a pause in Q4, as we lapped a lockdown benefited 2020, we are exiting 2021 in an excellent position with Q4 NGR +14%cc
ahead of 2019 on a two year CAGR basis. Excluding Germany and the Netherlands, where regulatory changes are significantly impacting
the market, Online NGR was up +21%cc year on year with strong growth in all of our key markets (two year CAGR +27%cc).
Underlying EBITDAR4 of £901.0m and underlying EBITDA4 of £899.0m were 12% ahead of 2020. Underlying operating profit⁵ of
£776.0m was 14% ahead and, after charging £154.0m of separately disclosed items, operating profit was £622.0m, £247.3m ahead of
last year.
In the UK, NGR was +10% ahead of the prior year. UK sports brands NGR was +12%cc ahead driven by investment in marketing and
product innovation including the launch of Ladbrokes 5-a-side, a product which gave fans an “epic new way to bet”. More than 50%
of our football active customer base played 5-a-side during the Euro 2020, where it was promoted and offered on every match in the
tournament. We have begun to change our advertising, making it more entertaining and high impact to engage and excite new and
existing audiences. During the year, we saw the release of two major TV campaigns for Ladbrokes; “Drummers”, which captured the
excitement and anticipation of the return of football, and “Balloon”, an industry first brand led campaign for casino and gaming, capturing
the enjoyment of playing together. Our gaming offering across both brands continues to expand giving our customers access to the latest
content including Coral’s Free to Play slots tournaments as well as introducing the best live games to Ladbrokes. We have innovated
the way we use digital channels to create more engaging and personalised interactions with our customers, including Coral’s hugely
successful “Against the Odds” sporting documentary series on ITV4 which delivers a unique insight into some of the most inspiring
sporting stories and the ”All to Play For” weekly podcast, which takes a look at the biggest football games of the season with a special
guest line up.
UK Gaming brands NGR were +9%cc ahead of last year. Our Foxy brand continues to go from strength to strength, up +46%cc on the
prior year and up +58%cc on a two-year CAGR basis. The strong performance in the UK has been driven by continued investment in
product and marketing including the migration of our bingo product on to the Group’s proprietary technology, the sponsorship of First
Dates and a new range of Foxy Bingo TV campaigns. During the year, Foxy was awarded the Bingo Operator of the Year at the EGR
Awards recognising our stand-out proposition.
In Italy, NGR across the three major brands (Eurobet, bwin and Gioco Digitale) was 31%cc ahead of 2020. NGR growth was driven
by investment in product and feature enhancements, giving our customers greater experiences and exciting entertainment online.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 68
Business Review continued
This included the release of new NBA game footage, pre-match football player markets and 300 new casino games in Eurobet. In bwin
and Gioco Digitale, our in-house Eurobet games went live as well as launching esports streaming to bwin.tv. We continue to benefit
from the strength of our omni channel offering, compared with our online only competitors, particularly when Covid restrictions caused
temporary retail closures.
In Australia, we have seen strong underlying growth again in 2021 with NGR +20% (+18%cc) ahead of 2020 and up +35% on a
two-year CAGR basis. Both our brands, Ladbrokes and Neds, continue to resonate with customers and our team continue to work
on several exciting content and product releases in addition to those already released in 2021. Both brands continue to gain market
share with the strategic focus on product innovation, brand activation and customer engagement continuing to be reflected in top line
growth. We have a strong pipeline of feature products and brand campaigns planned for release in 2022 that focus on expanding on the
customer experience and revolutionising the way consumers engage with our brands.
In Germany, sports NGR was 22%cc ahead of 2020 whilst gaming was -61%cc behind as the impact of the tolerance regime annualises
and the ongoing impact of non-compliant operators continues to create an uneven market. However, this was ahead of expectations and,
although we still await a decision on deposit limits on sports and the issuance of gaming licences, we continue to be excited by the long-
term prospects for the German market. In September, we announced a sponsorship agreement with UEFA for the Europa League and
Europa Conference League to further drive bwin’s exposure in Germany as well as the rest of Europe.
In the Netherlands, we saw regulatory changes come into effect in October 2021 and as a result, Entain ceased all operations in the
Netherlands from 1 October 2021. We have since applied for a new licence and await the next steps in the licence allocation process
which we expect to conclude around the middle of 2022.
NGR in Brazil was +111%cc ahead of 2020, further confirming Sportingbet as the market leader. Underlying customer metrics also remain
strong with actives up +156% in the year. We anticipate that the Brazilian market will regulate sports in 2022 (and gaming in 2023) and
see this as an exciting opportunity to further establish the Sportingbet brand and grow market share.
Enlabs, which was acquired at the end of Q1, has performed exceptionally well during 2021 with NGR and EBITDA ahead of our initial
expectations. On a proforma basis, NGR is up +49% year on year and our market share in the Baltics has increased to 30%, up +3.0pp
on 2020. Following its integration into the Entain family, Enlabs is now offering Entain’s core products and leveraging its systems and
marketing capabilities in order to drive further growth. Optibet has joined the Partypoker network, doubling poker active users in the first
month, as well as launching Pragmatic Play live games. We continue to work on the integration of the bwin sports feed into the Enlabs
business which will enable us to offer more live betting events to our customers in 2022.
In Georgia, NGR was +26%cc ahead year on year with Crystalbet maintaining its position as the number one operator with 32% market
share in 2021. Given the position of the Crystalbet brand in the market, we believe we are well positioned to absorb the impact of the new
regulations and tax restrictions announced in November.
In 2021, we have consolidated our Party branded businesses into One Party, with a renewed focus on recreational players. During the
year, we also launched Party Responsibly, a new initiative which uses the partnership between our two brands, Party Casino and
partypoker and McLaren Racing, to promote safer betting and gaming, to ensure our players respect their limits and enjoy a great
entertainment experience. In the year, One Party NGR was in line with 2020, which represents 20% growth on a two-year CAGR basis.
Bet.pt, which was acquired at the end of Q1, was successfully rebranded bwin and migrated onto the Entain platform during the third
quarter. Since the acquisition the business has also become the sponsor of Liga Portugal which, when combined with our sponsorship
of UEFA and the partnership with the German FA, further extends bwin’s presence in football across Europe. We are already seeing the
benefits of improved product and marketing capabilities following migration to the Entain platform.
Online contribution margin of 42.2% was +0.4pp higher than last year, with the impact of adverse geographical mix and the new German
gaming tax more than offset by savings in marketing rate which was particularly low in 2021. The marketing rate is expected to return to
a more normalised 21% in 2022 with a contribution margin of 40%-41%.
Operating costs (before rent) were 15% higher than last year. Acquisitions accounted for +7pp of the increase, and inflation and ongoing
investment in our people, product and technology accounted for high single digit cost increases year on year.
Rent and associated costs were £2m in the year, compared with £1.4m in the prior year, leaving underlying EBITDA4 of £899.0m,
+12% ahead.
Share based payments were £1.0m higher than last year and underlying depreciation and amortisation of £116.7m was 3% lower.
Share of JV losses of £1.0m is £1.1m adverse to prior year, leaving underlying operating profit5 +14% higher at £776.0m.
Entain plc | Annual Report 2021 Strategic report 69
CC3
%
(9%)
(1.3pp)
(20%)
12%
(7%)
Retail
The Retail business is made up of our Retail estates in the UK, Italy, Belgium and Republic of Ireland.
Year ended 31 December
Sports wagers6
Sports margin6
Sports NGR/Revenue
Machines NGR/Revenue
NGR/Revenue
Gross profit
Contribution
Contribution margin
Operating costs
Underlying EBITDAR4
Rent and associated costs
Underlying EBITDA4
Share based payments
Underlying depreciation and amortisation
Share of JV income
Underlying operating loss5
Reported Results1,2:
Reported results1,2
2021
£m
2,330.0
18.1%
426.1
365.0
791.1
535.8
529.0
66.9%
(447.5)
81.5
(14.6)
66.9
(1.9)
(102.4)
–
(37.4)
2020
£m
2,582.0
19.3%
531.4
325.7
857.1
577.5
571.7
66.7%
(456.1)
115.6
(17.3)
98.3
(1.5)
(115.8)
–
(19.0)
Change
%
(10%)
(1.2pp)
(20%)
12%
(8%)
(7%)
(7%)
0.2pp
2%
(29%)
16%
(32%)
(27%)
12%
–
(97%)
Retail NGR of £791.1m was 8% behind last year (-3%cc on a like-for-like basis) with national lockdowns and Covid-19 restrictions
continuing to affect the business through much of 2021. The first half was significantly impacted by lockdown restrictions with the entire
estate closed in Q1. The UK reopened under restrictions in April with Europe opening progressively throughout Q2, resulting in NGR which
was -46%cc behind year on year in H1. In the second half, restrictions continued to ease and, with the benefit of lapping lockdowns
in late Q4 in 2020, NGR was 20%cc ahead of H2 2020. Whilst year on year comparisons are difficult given the distortions caused by
Covid-19 restrictions, encouragingly we are exiting 2021 with like for like NGR at over 90% of pre Covid-19 levels, and within 5%6 in our
largest estates in the UK and Italy, while underlying EBITDA4 is marginally ahead of 2019 in H2. Underlying EBITDAR4 of £81.5m was
£34.1m behind 2020 and underlying EBITDA4 of £66.9m was £31.4m behind as savings in operating costs were more than offset by
the reduction in NGR resulting from Covid-19 enforced shop closures. The underlying operating loss5 was £37.4m and, after including
separately disclosed income of £1.4m, operating loss was £36.0m, £243.3m behind last year, a year in which the Retail segment received
a £223.0m UK VAT receipt.
In the UK, NGR was -3% behind 2020 with sports -17% behind 2020 but machines +12% ahead. Since reopening, we have seen our
machines business return more quickly than our sports business as the in-person gaming experience is difficult to replicate online.
While sports volumes continue to improve further into 2022, we anticipate a rebalancing of the Retail income post Covid-19 with
machines making up a greater proportion of NGR than was the case pre Covid-19.
With the customer at the centre of our organisation, we recognise the need for continued evolution of our retail offering. With this in
mind, we are progressing with our digitalisation projects at pace. We continue to focus on in house technology and innovation and,
at the start of 2022, we successfully completed the rollout of our proprietary EPoS system, Omnia in Great Britain. This system brings
a host of customer and colleague benefits plus many service delivery improvements. Our Betstations now represent a third of our
sportsbook, growing 33% in the last quarter on a two-year LFL basis. They provide our customers with an improved digitalised in-shop
experience offering significantly greater depth of products and promotions not available over the counter. In addition, our own proprietary
Betstations are now live in over 200 shops with initial results encouraging. Digital Hubs are now live in 30 locations across the UK,
showcasing new technologies and appealing to a broader customer base. Initial trials of the Digital Hubs are delivering strong returns
with positive feedback from our customers.
At the heart of the customer experience is the in-person interaction with our shop colleagues. Given the important role our shop staff play,
we are delighted that we will now be paying a minimum of £10 per hour to all colleagues from April 2022.
In Italy, Belgium and Ireland, our Retail shops were closed for a majority of the first half, re-opening progressively throughout May and into
June, albeit under restrictions which continued into the second half. Despite the Green Pass in Italy preventing unvaccinated customers
from entering our shops, our Eurobet estate demonstrated its resilience with NGR within 5% of pre-Covid levels by the end of the year.
Trading in Belgium recovered more slowly, particularly in the last quarter as the impact of the Covid-19 variants escalated, resulting in
Belgium shops closing again on the 26 December, only reopening on 27 January 2022. Resulting NGR across Europe was -27% (-26%cc)
behind in Italy, -25% (-24%cc) in Belgium and -23% (-22%cc) in Republic of Ireland.
Operating costs (before rent) were 2% lower than 2020, largely due to cost mitigation actions in response to lockdowns and robust
underlying cost control. During H1, the Retail business claimed furlough in line with Government guidelines, albeit the amounts received
were c25% lower than in 2020.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 70
Business Review continued
Rent and associated costs of £14.6m in the year were 16% lower than the prior year following a number of shop closures in the UK,
leaving underlying EBITDA4 of £66.9m, 32% lower than 2020.
Charges for share based payments were £0.4m higher than last year and underlying depreciation and amortisation of £102.4 was 12%
lower as the impact of depreciation charges arising from the fair value exercise on the acquisition of Ladbrokes Coral starts to reduce,
leaving an underlying operating loss5 of £37.4m, £18.4m behind 2020.
As at 31 December 2021, there were a total of 4,346 shops/outlets (2020: 4,589): UK 2,580 (2020: 2,845), Italy 940 (2020: 905), Belgium
shops 291, outlets 402 (2020: shops 304, outlets 402) and Ireland 133 (2020: 133).
Given the more certain medium-term outlook, we have taken the decision to repay the £44m received under the Coronavirus Job
Retention Scheme (“furlough scheme”) in FY21. The scheme was a sensible and highly welcome policy intervention that helped us, as one
of the country’s largest retailers, to maintain the livelihoods of more than 14,000 retail colleagues on full pay. We have kept the situation
under review since we first made use of the scheme and are pleased to be in a position to repay these monies.
New Opportunities
Year ended 31 December
Underlying EBITDAR4
Rent and associated costs
Underlying EBITDA4
Share based payments
Underlying depreciation and amortisation
Share of JV (loss)/income
Underlying operating loss5
Reported Results1,2:
2021
£m
(8.8)
–
(8.8)
–
(0.4)
–
(9.2)
Reported results1,2
2020
£m
Change
%
CC3
%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
New Opportunities costs4 of £8.8m primarily reflect £1.2m of operating costs associated with Unikrn and £7.0m of innovation costs.
Across operating costs and capital expenditure, the Group has committed to investing £100m in innovation spend over three years
with the launch of an innovation hub announced in January 2022. After depreciation and amortisation, New Opportunities underlying
operating loss5 was £9.2m. Separately disclosed items for the year were £nil resulting in an operating loss of £9.2m.
Entain plc | Annual Report 2021 Strategic report 71
CC3
%
18%
2021
£m
32.8
28.5
27.8
(22.1)
5.7
(0.1)
5.6
(0.1)
(2.9)
0.4
3.0
Reported results1,2
Change
%
18%
27%
32%
12%
246%
67%
233%
0%
(7%)
33%
145%
2020
£m
27.8
22.4
21.1
(25.0)
(3.9)
(0.3)
(4.2)
–
(2.7)
0.3
(6.6)
Other
Year ended 31 December
NGR/Revenue
Gross profit
Contribution
Operating costs
Underlying EBITDAR4
Rent and associated costs
Underlying EBITDA4
Share based payments
Underlying depreciation and amortisation
Share of JV income
Underlying operating profit/(loss)5
Reported Results1,2:
NGR of £32.8m was 18% higher than 2020 as volumes start to return to our greyhound stadia. Underlying EBITDAR4 of £5.7m and
underlying EBITDA4 of £5.6m were £9.6m and £9.8m ahead respectively predominantly due to the NGR improvement and robust cost
control. Underlying operating profit5 of £3.0m was 145% ahead and, after charging £1.7m of separately disclosed items, operating profit
was £1.3m, £7.9m ahead of last year.
Corporate
Year ended 31 December
Underlying EBITDAR4
Rent and associated costs
Underlying EBITDA4
Share based payments
Underlying depreciation and amortisation
Share of JV loss
Underlying operating loss5
Reported Results1,2:
CC3
%
2021
£m
(80.6)
(0.4)
(81.0)
(5.0)
(0.4)
(161.9)
(248.3)
Reported results1,2
2020
£m
(54.5)
–
(54.5)
(9.0)
–
(60.6)
(124.1)
Change
%
(48%)
n/m
(49%)
44%
n/m
(167%)
(100%)
Corporate costs4 of £80.6m were £26.1m higher than last year driven by increases in our contributions to Research, Education and
Treatment including GambleAware, additional contributions to the Entain foundation and other Group ESG initiatives and investment in
our governance policies and procedures. After share based payments, depreciation and amortisation and share of JV losses, Corporate
underlying operating loss5 was £248.3m, an increase of £124.2m, largely as a result of the expected incremental loss in the US JV,
BetMGM. After separately disclosed income of £26.0m, the operating loss of £222.3m was £5.8m behind 2020.
Notes
1. 2021 and 2020 reported results are audited and relate to continuing operations.
2. Reported results are provided on a post IFRS16 implementation basis.
3. Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2021 exchange rates.
4. EBITDAR is defined as earnings before interest, tax, depreciation and amortisation, rent and associated costs, share based payments and share of JV income.
EBITDA is defined as EBITDAR after charging rent and associated costs. Both EBITDAR and EBITDA are stated pre separately disclosed items.
5. Stated pre separately disclosed items (Note 6).
6. Retail numbers are quoted on a LFL basis. During 2021 there was an average of 4,540 shops in the estate, compared to an average of 4,727 in the same period last year.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 72
Strategic report
Chief Financial Officer’s Review
Entain plc | Annual Report 2021
Overview | Strategic report | Governance | Financial statements
73
Despite the uncertainty caused
by Covid-19 in 2021, the Group
has continued to show its
resilience with Revenue 8%
ahead year-on-year.”
Rob Wood
Chief Financial Officer
Despite the uncertainty caused by Covid-19 in
2021, the Group has delivered another strong year
of growth with Revenue 8% ahead of 2021 and
underlying EBITDA of £881.7m, 5% ahead. Our
Online business continues to grow double-digit
year-on-year with NGR 13% ahead on a constant
currency basis and, despite the disruption caused
by temporary closures of our Retail estates due to
Covid-19, we exit 2021 at over 90% of pre Covid-19
volumes in Retail.
During the year we have also welcomed a number of new acquisitions to the Entain Group
including Enlabs, which operates in the Baltic states, Bet.pt in Portugal and Unikrn which
represents the Group’s first venture into the esports market.
During the year, the Group also refinanced its US dollar debt, ensuring that
sufficient facilities and liquidity remains available for the Group to pursue all of its
strategic objectives.
We enter 2022 with good momentum and I am as confident as ever in Entain’s long-
term prospects.
Entain plc | Annual Report 2021
74
Chief Financial Officer’s Review continued
Year ended 31 December
NGR
Revenue
Gross profit
Contribution
Underlying EBITDAR4
Underlying EBITDA4
Share-based payments
Underlying depreciation and amortisation
Share of JV loss
Underlying operating profit5
Net finance costs
Net foreign exchange/financial instruments
Profit before tax pre separately disclosed items
Separately disclosed items:
Amortisation of acquired intangibles
Other
Profit before tax
Tax
Profit after tax from continuing activities
Discontinued Operations
Profit after tax
CC3
%
8%
9%
2021
£m
3,886.3
3,830.0
2,435.8
1,851.5
898.8
881.7
(12.3)
(222.8)
(162.5)
484.1
(75.0)
118.2
527.3
(144.2)
10.1
393.2
(117.6)
275.6
(14.9)
260.7
Reported results1,2
Change
%
7%
8%
6%
6%
4%
5%
17%
7%
(170%)
(9%)
2020
£m
3,628.5
3,561.6
2,308.6
1,740.2
862.1
843.1
(14.8)
(238.6)
(60.2)
529.5
(74.2)
(104.7)
350.6
(307.0)
131.1
174.7
(60.9)
113.8
(34.4)
79.4
NGR and revenue
Separately disclosed items
Group reported NGR was 7% ahead and Revenue was 8% ahead
of last year, with strong online performance more than offsetting
Covid-19 related shop closures. Further details are provided in the
Business Review section.
Underlying operating profit5
Group reported underlying operating profit5 of £484.1m was 9%
behind 2020 (2020: £529.5m), with underlying EBITDA4 ahead
by 5% as a result of the revenue outperformance offset by an
expected increase in losses from the Group’s share of the BetMGM
joint venture. BetMGM losses in the year were £161.9m, £101.3m
higher than 2020 as the business invests in new jurisdictions as
they open. Analysis of the Group’s performance for the year is
detailed in the Business Review section.
Financing costs
Finance costs of £75.0m excluding separately disclosed items
(2020: £74.2m) were £0.8m higher than 2020. The incremental
interest costs associated with the increased lending on the Group’s
US dollar loan, which raised an additional $351m, was partially
offset by a full year of benefits from the 2020 refinancing.
Net gains on financial instruments, driven primarily by foreign
exchange gains on debt related items, were £118.2m in the year
(2020: £104.7m loss). This gain is partially offset by a foreign
exchange loss on the translation of assets in overseas subsidiaries
which is recognised in reserves and forms part of the Group’s
commercial hedging strategy.
Items separately disclosed before tax for the period amount to a
£134.1m charge (2020: £175.9m) and relate primarily to £144.2m
of amortisation on acquired intangibles (2020: £307.0m), a £3.3m
(2020: £5.0m) impairment of certain head office premises which are
now vacant and our exchange business Betdaq, integration costs
of £17.3m (2020: £25.1m), corporate transaction costs of £9.4m
(2020: £nil) and £26.2m of onerous costs associated with Covid-19
related shop closures and other one-off legal and litigation expenses
(2020: £8.9m). In addition, the Group recorded a £6.1m charge
associated with the reassessment of contingent consideration
payments under historic acquisitions (2020: £42.4m) and £9.7m of
other exceptional items primarily due to the write-off of issue costs
on refinancing (2020: £9.6m). During the prior year the Group also
incurred £8.3m of costs associated with right-sizing the UK Retail
estate post the introduction of the £2 FOBT stakes restrictions.
During the year, the Group also recorded a net £80.2m income,
predominantly against the Group’s 2010/11 Greek Tax Assessment
following a court ruling in the Group’s favour during the latter
part of 2021 (2020: £223.5m predominantly a UK VAT claim in
our Ladbrokes business) and a profit on sale of assets of £1.9m
(2020: £6.9m).
Separately disclosed items
Amortisation of acquired intangibles
Impairment
Integration costs
Corporate transaction costs
Tax litigation/one-off legislative impacts
Legal and onerous contract costs
Movement in fair value of contingent
consideration
Other including issue cost write-off
Profit on sale of assets
Triennial restructuring costs
Total
2021
£m
(144.2)
(3.3)
(17.3)
(9.4)
80.2
(26.2)
(6.1)
(9.7)
1.9
–
(134.1)
2020
£m
(307.0)
(5.0)
(25.1)
–
223.5
(8.9)
(42.4)
(9.6)
6.9
(8.3)
(175.9)
Entain plc | Annual Report 2021 Strategic report 75
Profit before tax
Profit before tax and separately disclosed items was £527.3m (2020: £350.6m), a year-on-year increase of £176.7m, largely driven by
EBITDA growth and the foreign exchange gain on the retranslation of debt partially offset by an increase in our share of BetMGM losses.
After charging separately disclosed items, the Group recorded a pre-tax profit from continuing operations of £393.2m (2020: £174.7m).
Taxation
The tax charge on continuing operations for the year was £117.6m (2020: charge of £60.9m), reflecting an underlying effective tax rate
pre-BetMGM losses and foreign exchange gains on external debt of 14.2% (2020: 12.2%) and a tax charge on separately disclosed items
of £27.5m (2020: income £2.1m).
Cash flow
Year ended 31 December
Underlying EBITDA4
Discontinued EBITDA
Underlying working capital
Capital expenditure
Finance lease principal (incl. IFRS 16 leases)
Corporate taxes
Underlying Free cash flow
Investment in BetMGM
Acquisitions/disposals net of cash
Free cash flow
Interest paid (incl. IFRS 16 leases)
Separately disclosed items
Net movement on debt and associated instruments
Equity issue
Dividends paid
Net cash flow
Foreign exchange
Net cash (outflow)/generated
2021
£m
881.7
(5.3)
23.7
(176.2)
(87.9)
(98.7)
537.3
(164.4)
(510.6)
(137.7)
(73.3)
(225.1)
212.0
0.7
(24.5)
(247.9)
(14.8)
(262.7)
2020
£m
843.1
(14.1)
(12.6)
(158.3)
(85.9)
(59.2)
513.0
(61.8)
–
451.2
(95.3)
24.6
(30.0)
8.6
(12.4)
346.7
13.0
359.7
During the year, the Group had a net cash outflow of £247.9m (2020: inflow of £346.7m), but an inflow of £427.1m before acquisitions and
disposals and investment in BetMGM (2020: £408.5m).
Underlying free cashflow for the year was £537.3m (2020: £513.0m) with underlying EBITDA of £881.7m (2020: £843.1m) and a working
capital inflow of £23.7m (2020: £12.6m outflow) partially offset by investment in capital expenditure of £176.2m (2020: £158.3m), lease
payments of £87.9m (2020: £85.9m) including those on non-operational shops and £98.7m in corporate tax payments (2020: £59.2m).
Discontinued operations incurred a £5.3m EBITDA loss during the year (2020: £14.1m). Including cash outflows for M&A activity and
additional investment in BetMGM during the year, free cash outflow was £137.7m (2020: £451.2m inflow).
During the year, the Group paid £73.3m of interest (2020: £95.3m) and £225.1m on separately disclosed items (2020: £24.6m income)
including £130.7m of contingent consideration on previous acquisitions (2020: £24.8m), £37.0m on tax litigation items (£102.6m inflow),
£27.7m on integration costs (2020: £30.1m), £18.8m on legal and onerous contract costs (2020: £22.1m) and £9.4m on acquisition and
deal related costs (2020: £nil). £212.0m was received on debt related instruments (2020: £30.0m payment), primarily on the refinancing
of the USD loan which raised net proceeds of £238.2m (2020: £35.0m repayment of drawndown RCF), partially offset by £19.1m of costs
on the settlement of one of the Group’s external swap arrangements (2020: £12.6m receipt). During the year, the Group also paid £24.5m
in dividends to the minority holding in Crystalbet (2020: £12.4m) and raised £0.7m on the issue of equity under legacy share incentive
schemes (2020: £8.6m). No equity dividends were paid during either the current or prior year.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 76
Chief Financial Officer’s Review continued
Net debt and liquidity
As at 31 December 2021, net debt was £2,086.4m and represented a net debt to EBITDA ratio of 2.4x. There was no drawdown on the
Group’s revolving credit facility.
Bonds
Term loans
Interest accrual
Cash
Accounting net debt
Cash held on behalf of customers
Fair value of swaps held against debt instruments
Short-term investments/Deposits held
Balances held with payment service providers
Lease liabilities
Adjusted net debt
Going Concern
Par value
£m
(500.0)
(1,772.6)
(13.6)
(2,286.2)
Issue costs/
Premium
£m
(10.8)
14.6
–
3.8
Total
£m
(510.8)
(1,758.0)
(13.6)
(2,282.4)
487.1
(1,795.3)
(205.9)
57.4
20.3
130.8
(293.7)
(2,086.4)
In adopting the going concern basis of preparation in the financial statements, the Directors have considered the current trading
performance of the Group, the financial forecasts and the principal risks and uncertainties, including the ongoing impact of Covid-19.
In addition, the Directors have considered all matters discussed in connection with the long-term viability statement including the
modelling of “severe but plausible” downside scenarios such as legislation changes impacting the Group’s Online business and new
lockdowns affecting the Group’s Retail operations.
Despite the net current liability position, the level of the Group’s available cash (c£400m), available financing facilities (including an
undrawn revolving credit facility of c£500m) and the forecast covenant headroom even under the sensitised downside scenarios,
the Directors believe that the Group is well placed to manage the risks and uncertainties that it faces. As such, the Directors have a
reasonable expectation that the Group will have adequate financial resources to continue in operational existence and have, therefore,
considered it appropriate to adopt the going concern basis of preparation in the financial statements.
Notes
1. 2021 and 2020 reported results are audited.
2. Reported results are provided on a post IFRS16 implementation basis.
3. Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2021 exchange rates.
4. EBITDAR is defined as earnings before interest, tax, depreciation and amortisation, rent and associated costs, share based payments and share of JV income.
EBITDA is defined as EBITDAR after charging rent and associated costs. Both EBITDAR and EBITDA are stated pre separately disclosed items.
5. Stated pre separately disclosed items.
Entain plc | Annual Report 2021 Strategic report 77
Statement of Directors’ responsibilities in respect of the
Annual Report and the Financial statements
The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance
with applicable law and regulations.
The Directors have elected to prepare the consolidated financial statements in accordance with International Financial Reporting
Standards and applicable law and have elected to prepare the parent Company financial statements in accordance with FRS 101
Reduced Disclosure Framework.
In preparing each of the Group and parent Company financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
for the Group financial statements, state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
for the parent Company financial statements, state whether applicable UK accounting standards have been followed, subject to any
material departures disclosed and explained in the parent Company financial statements;
assess the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern;
use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so; and
prepare financial statements which give a true and fair view of the state of affairs of the Group and the parent Company and of the
profit or loss of the Group and the parent Company for that period.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure
that its financial statements comply with the Isle of Man Companies Act 2006. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s
website. Legislation in the Isle of Man governing the preparation and dissemination of financial statements may differ from legislation
in other jurisdictions.
Responsibility statement of the Directors in respect of the annual financial report
We confirm that to the best of our knowledge:
the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a
whole; and
the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer and the
undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that
they face.
We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and performance, business model and strategy.
Rob Wood
Chief Financial Officer
3 March 2022
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 78
Chief Governance Officer’s Review of Risk
2021 has been another year of disruption with the Covid-19
pandemic continuing to impact global economies and causing
temporary closures of our Retail estates. As we discussed in
our 2020 Annual Report, the impact of Covid-19 has been felt
by all corporates and given the unprecedented nature of these
events, our robust risk assessment, management and mitigation
procedures have been imperative in helping the Group navigate
the last two years.
While there is still some uncertainty in the short-term, we have
entered 2022 with good trading momentum and a strong Balance
Sheet and, as such, we remain as confident as ever in Entain’s
longer term prospects.
Whilst our risk function has continued to monitor and assess the
risks associated with Covid-19 during 2021, the learnings from
2020 and the processes adopted have afforded the team greater
time to focus on the Group’s wider Risk Management Framework.
As such, during 2021 we have continued to refine our approach to
Risk as well as deliver on a number of our 2021 objectives.
Looking back at our achievements in 2021 and our priorities
for 2022:
Key successes in 2021
Continued development and enhancement of our divisional/
functional risk registers and risk mitigation activities.
Roll-out of the Group Risk Management processes to
2021 acquisitions.
Formalisation of deep dive sessions with the Group Board and
Committees on the Group’s principal risks on rotation.
Key priorities for 2022
Refinement of our risk management processes to ensure they
are fully aligned with the Group strategy and the focus on
sustainability and growth.
A continued commitment to reduce risk through the introduction
of new business processes where it makes commercial sense to
do so.
Enhancement of the Group’s testing programme of the critical
controls which have been designed to mitigate and manage the
Group’s principal risks.
The following risk report details our approach to risk management,
the Group’s principal risks and the Board’s assessment of viability.
While there is still some uncertainty in
the short-term, we have entered 2022
with good trading momentum.”
Robert Hoskin
Chief Governance Officer
3 March 2022
Robert Hoskin
Chief Governance Officer
Entain plc | Annual Report 2021 Strategic report Risk management process
and methodology
Risk management structure and governance
79
The effective understanding, measurement, acceptance
and mitigation of risk is fundamental to the Group
achieving its strategic priorities. As such, over the course
of the year, the Group has continued to enhance its risk
management capabilities, improving its ability to identify,
evaluate, monitor and manage its principal risks as well
as responding to the challenges presented by new and
emerging risks.
Structure
The Group has developed and deployed an integrated and
proactive approach to risk management with operational
management and functional specialists at the heart of our
processes and governance structure. We continue to challenge
ourselves to improve our ability to detect, understand and debate
risk whilst also continuing to strengthen our three lines of defence
model through improved processes and investment in resources.
Our first line of defence is our day to day business operation teams
and functional/divisional risk forums, who actively evaluate and
manage risks as part of their day to day activities. The second line
of defence is our risk and regulatory oversight functions and Risk
Committee which is overseen by the Director of Financial Control
and Risk. These oversight functions provide our businesses with
expert advice, challenge and assistance in ensuring risks are
appropriately identified, evaluated, managed and mitigated in line
with the Group’s risk appetite.
Our third line of defence is provided by Internal Audit, who provide
independent and objective assurance over our risk assessment
processes and the design and operating effectiveness of our risk
mitigation control activities.
PLC Board
Specific risk oversight:
Laws, regulations, licensing and regulatory compliance
Bet MGM and US Strategy
Increased cost of product
Pandemic
Recruitment and retention of key employees
Whilst not a principal risk, the Board also reviews the Group’s litigation risk on an ongoing basis
Nominations Committee
Whilst the Board is responsible
for the annual review of the
principal risk of retention of
key employees, as part of their
responsibilities the Nominations
Committee continually reviews
succession planning and the
susceptibility of the Group
to the risk of retention of
key employees
Audit Committee
Delegated risk oversight1:
ESG Committee
Delegated risk oversight1:
Data Breach/Cyber
Safer Betting and Gaming
Technology failure
Health, safety and wellbeing
Taxes
Loss of key locations
Trading, Liability and
pricing management
Risks also reviewed continually
under Committee ToR: Regulatory
compliance and licensing, AML,
Responsible gambling, data
protection and the environment
Remuneration Committee
Whilst the Board is responsible
for the annual review of the
principal risk of recruitment and
retention of key employees, as
part of their responsibilities
the Remuneration Committee
continually reviews this risk and
the mitigating actions in place to
prevent the risk crystallising
Group Risk Committee
Digital
(register
per region)
Retail
Corporate
Legal,
Regulatory &
Compliance
Technology
incl. Cyber
Data
security
Trading
Divisional Risk forums
Functional Risk forums
1. Delegated oversight and responsible for deep dive reviews of Group’s principal risks
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 80
Risk management process and methodology continued
Governance
How risks are measured
As part of the risk management process, all risks identified are
measured against a defined set of criteria using a standard 5 x 5
risk matrix which assesses both the impact and the likelihood of a
risk arising. In assessing impact and likelihood we assess the risk
against financial performance, Operational processes, Legal and
PR and Health and Safety. In particular:
The potential impact/consequence to the Group should the
risk materialise:
– The impact of each risk is measured with reference to the
financial implications (underlying EBITDA and cash), its
potential operational impact (including the security of our
data), the effect on the reputation of our brands and whether
or not it affects our commitment to health and safety.
The impact is measured on a scale, where 1 is low, with limited
damage to a minor stakeholder, and 5 being severe, which
may have a substantial impact on the Group affecting many
key stakeholders, including customers.
The likelihood of the risk materialising:
– The extent to which an event is likely to occur is scored
from 1-5, 1 being remote i.e. very unlikely to occur and 5
being probable i.e. where it has the potential to occur or has
already happened.
The product of both scores gives rise to the risk score that
determines the relative importance of the individual risk.
The Board recognises the benefits of ensuring its risk management
processes are in line with the UK Corporate Governance Code and
the expectations of listed companies. As part of this process we
not only assess risk but also evaluate the level of risk the Group is
willing to take, also referred to as risk appetite. This process forms
a key part of the Enterprise Risk Management (“ERM”) Framework.
The ERM Framework is the vehicle which defines and delivers risk
management across the business and includes a standard risk
scoring matrix to ensure a consistent approach to the identification,
measurement and response to risk.
The Group Risk Committee, chaired by the Chief Governance
Officer, is responsible for the ERM and Group Risk Management
policy. The Committee meets formally four times each year
and comprises operational management and functional area
specialists. Whilst the Committee considers all identified risks to
the business, it focuses on the principal risks.
The Entain Group Risk Management policy details how risks are
managed and monitored. For each risk identified, the impact,
likelihood, consequence, risk owner (Executive Committee member)
and operational lead are identified. The risk owner and operational
lead are responsible for identifying the relevant mitigating controls
and remedial actions required to manage risk appropriately.
The Risk Committee opine on the adequacy of the businesses
risk mitigation with Internal Audit testing the effectiveness of the
controls identified.
The Board maintains and reviews a consolidated view of key risks
across all business segments and takes advice from the Group Risk
Committee on the Group’s risk appetite and strategy as well as the
effectiveness of our risk management processes. The Board and
its sub-Committees also undertake a deep-dive review of all of the
Group’s principal risks on rotation throughout the year.
Whilst we recognise that we have limited control over certain risks
faced by the Group, such as the current pandemic, macroeconomic
events and the complex regulatory environment in which we
operate, we continue to monitor developments in these areas
closely and identify emerging risks through horizon scanning whilst
ensuring that the Group has appropriate response plans in place.
The risk management approach is subject to continuous review and
updates in order to reflect new and developing issues which might
impact business strategy. Emerging or topical risks, such as the
pandemic or Brexit, are examined to understand their significance
to the business.
In assessing impact and
likelihood we assess the risk
against financial performance,
Operational processes, Legal
and PR and Health and Safety.”
Read more on our governance framework:
pages 95-96
Stuart Smith
Director of Financial Control and Risk
Entain plc | Annual Report 2021 Strategic report Principal Risks
The principal risks and uncertainties,
which are considered to have a
material impact on the Group’s long-
term performance and achievement
of strategy, are set out on the
table opposite.
The risks represent a snapshot at a point
in time, and as the environment we operate
in is constantly evolving, new risks may
arise, the potential impact of known
risks may increase or decrease, and our
assessment of a risk may change. They do
not include all those risks associated with
the Group’s activities and are not set out
in any order of priority.
This is not intended to be an exhaustive and
extensive analysis of all risks which may
affect the Group.
Read more on the Board’s review of Principal
Risks on: page 101
81
Data Breach
and Cyber Security
Chief Operating Officer and
Chief Technology Officer
Laws, Regulations,
Licensing and
Regulatory Compliance
Chief Governance Officer
Risk category
Risk category
Technology
Legal and regulatory
Reputational
Financial
Impact: High
Likelihood: High
Commercial
Legal and regulatory
Reputational
Financial
Impact: High
Likelihood: Medium
Oversight: Audit Committee
Oversight: Board
Principal Risk/Uncertainty
Principal Risk/Uncertainty
The Group operations depend on the
fairness of its gaming engines, the
processing of customer data (protected
by strict data protection and privacy laws
in all jurisdictions in which the Group
operates) and the ability of customers to
access its services on a 24x7 basis.
The Group is exposed to the risk that the
integrity of gaming, confidentiality of
data or availability of its services would
be compromised through a cyberattack
or a breach in data security, which would
impact the trust of its customers and
could result in prosecutions including
financial penalties.
How we manage and mitigate the risk
The Group has dedicated Cybersecurity
and Data Privacy functions entrusted
with protecting the security of all
its operations.
The functions encapsulate the necessary
in-house expertise to adapt to emerging
threats. Operating under a ISO27001
Information Security Management
System certification, the Cybersecurity
controls and associated harmonised
policies are constantly being evaluated
and applied, where deemed relevant
across the enlarged Group.
The Data Privacy team, led by the
Group’s Chief Privacy Officer is tasked
with aligning the Group’s data privacy
strategy and governance structure,
providing regular updates to the Group’s
ESG Committee.
Strategic relevance
Crystallisation could lead to significant
reputational and operational issues
that limit the Groups ability to drive
Online growth.
Link to strategic objective: All objectives
Regulatory, legislative and fiscal regimes
for betting and gaming in key markets
around the world can change, sometimes
at short notice.
Such changes could benefit or have
an adverse effect on the Group and
additional costs might be incurred in
order to comply with any new laws or
regulations in multiple jurisdictions.
How we manage and mitigate the risk
The Group closely monitors regulatory,
legislative and fiscal developments in key
markets, allowing the Group to assess,
adapt and takes the necessary action
where appropriate.
Management take external advice,
which incorporates risk evaluation of
individual territories. It also engages
with the relevant regulatory bodies in
promoting licensing solutions that provide
commercially viable opportunities for
responsible online gaming operators.
Regulatory updates are provided on
a weekly basis to senior management
with updates provided to the Board
each month and discussed at every
Board meeting.
Strategic relevance
Whilst changing regulatory and tax
regimes offer opportunities to the Group
as well as posing risks, a significant
adverse change in jurisdictions in
which the Group operates could have a
significant impact on the Group’s future
profitability and cash generation.
In addition, changes in regulation may
require the Group to change procedures
and policies in order to adhere to
its commitment of responsibility
and sustainability.
Link to strategic objective: 1,2,3 & 5
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 82
Principal Risks continued
Key:
Risk increased
Risk decreased
Risk static
New risk
Technology Failure
Chief Operating Officer and
Chief Technology Officer
Taxes
Chief Financial Officer and Director
of Tax, Treasury and Insurance
BetMGM and US Strategy
Chief Financial Officer and
Chief Operating Officer
Risk category
Risk category
Technology
Legal and regulatory
Reputational
Financial
Impact: High
Likelihood: Low
Commercial
Legal and regulatory
Financial
Impact: Medium
Likelihood: High
Risk category
Strategic
Commercial
Financial
Impact: High
Likelihood: Low
Oversight: Audit Committee
Oversight: Audit Committee
Oversight: Board
Principal Risk/Uncertainty
Principal Risk/Uncertainty
Principal Risk/Uncertainty
The Group’s operations are highly
dependent on technology and advanced
information systems and there is a
risk that such technology or systems
could fail.
In particular, any damage to, or
failure of online systems and servers,
electronic point of sale systems and
electronic display systems could result
in interruptions to trading and customer
service systems.
How we manage and mitigate the risk
The Group’s technology resilience levels
are mature, established and supported
by robust operational procedures and
business continuity plans.
All critical revenue generating systems
are built to mission critical and high
availability standards with all operational
data across the ecosystem protected,
replicated, and safeguarded.
As part of the Group’s technology
strategy and objectives we are
continuously enhancing our processes
and making further improvements
and, where necessary, to automate
the Group’s full geographical disaster
recovery capability.
Strategic relevance
Significant technology failings or
product outage is likely to impact the
Group’s ability to attract and retain the
customers required to deliver the Group’s
growth strategy.
Link to strategic objective: All objectives
The Group is subject to a range of
taxes, duties and levies in many of the
countries where we have operations
or in which our customers are located.
The taxes imposed upon betting and
gaming companies have changed over
time and continue to change. In addition
to changing taxes, given the Group’s
geographical diversity, the nature of
tax affairs can be complicated with
differing legal interpretation regarding
the scope and scale of taxation. Both of
these factors mean the levels of taxation
to which the Group is exposed to may
change in the future.
How we manage and mitigate the risk
The Group’s tax strategy is approved
annually by the Board of Directors.
Responsibility for the execution of the
Group’s tax strategy is delegated to the
Chief Financial Officer who reports the
Group’s tax position to the Board on a
regular basis.
In order to mitigate tax risks that arise,
the Group actively identifies, evaluates,
manages and monitors its tax risks and
the geographies in which it operates.
The Group has an appropriately qualified
and resourced tax team to manage its
tax affairs.
In addition, where there is significant
uncertainty or complexity in relation to a
tax risk, the Group may use the services
of external, expert tax advisors.
Strategic relevance
Adverse changes in the tax regimes in the
jurisdictions in which the Group operates,
or a significant tax assessment, may
impact our profitability and cash position.
Link to strategic objective: 1,2 & 3
Effective execution of BetMGM’s
strategy in the US is key to the Group’s
growth forecasts. Ineffective execution
of the strategy may impact the Group’s
ambition of leadership in the US and
opportunities for NGR growth in already
regulated states and new states as
they regulate.
How we manage and mitigate the risk
An experienced management team has
been established within BetMGM which
has extensive experience of both the US
and the betting and gaming industry.
This local management team has been
supplemented by an experienced Board
of industry and US specialists from both
Entain and MGM Resorts.
In addition, the BetMGM business has
access to the specialist resources in
its parent entities as well as leading
professional advisers. This structure
is intended to ensure that BetMGM
has every chance of success in the
US, a market in which it has already
established itself as one of the market
leaders and fastest growing operators.
Strategic relevance
Ineffective execution of the US strategy
could impact the Group’s growth
ambitions and the efficiency of the
deployment of capital.
Link to strategic objective: 1
Entain plc | Annual Report 2021 Strategic report Safer Betting and Gaming
Chief Executive Officer
Risk category
Operational
Reputational
Commercial
Financial
Impact: High
Likelihood: Medium
Oversight: ESG Committee
83
Increased
Cost Of Product
Chief Operating Officer
Risk category
Commercial
Financial
Impact: Medium
Likelihood: Medium
Oversight: Board
Principal Risk/Uncertainty
Strategic relevance
Principal Risk/Uncertainty
The Entain strategy is founded on having
a sustainable business which provides
an entertaining and safe environment
for customers to enjoy our products.
An inability to adequately protect our
customers would fundamentally impact
our ability to achieve our strategic goals.
These include being the most responsible
operator, taking a scientific led approach
to player protection and only operating in
regulated markets by the end of 2023.
Link to strategic objective: 6
Safer betting and gaming is at the centre
of everything that Entain does. It is the
cornerstone of our Sustainability Charter,
and our most material ESG issue is to
ensure the highest possible levels of
player safety and protection. Failure to
adequately protect our customers could
impact our ability to offer products and
build a sustainable business.
How we manage and mitigate the risk
We know that only a responsible
business can be a sustainable one
which is why we continue to invest in
our Sustainability Charter as detailed on
page 40 of the Report.
One of the key pillars of this charter is
our Advanced Responsibility and Care™
(“ARC™”) programme. ARC™ is an
intelligent and innovative platform that
uses behavioural insight and research,
data science and analytics to assess risk
in play, enabling us to identify, interact
and intervene early with customers,
who show signs of gambling-related
harm. This is coupled with a range of
initiatives in the area of player protection,
including a $5m academic research
partnership with the Harvard Medical
School, to understand the causes and
consequences of problem gambling,
and donating up to 1% of our GGY to the
treatment of gambling related issues.
The Group is subject to certain
arrangements intended to support the
customer offering. Examples are the
horseracing and the voluntary greyhound
racing levies, data and content supply,
and the provision of marketing services.
The combined cost of these third-party
services is material and they collectively
have a significant impact on the
profitability for the business globally.
A number of the contracts that underpin
the provision of third-party services
are under negotiation at any one time.
The pricing of these services is also
subject to inflationary cost increases
and can also be volatile based on the
changeable business environment that
many of our suppliers operate.
How we manage and mitigate the risk
Senior management engages regularly
with the relevant trade associations
and the principal bodies of sport and
event industries with regard to sports
rights payments, including the statutory
horse racing levy, animal welfare and
other issues.
Across the wider supplier base, a central
procurement function and cost oversight
processes exist to ensure that pricing is
effectively controlled both at contract
stage and on an ongoing basis.
Strategic relevance
Material increases in the cost of
content may increase the operating
costs at higher than anticipated levels
impacting profits.
Link to strategic objective: 2
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 84
Principal Risks continued
Key:
Risk increased
Risk decreased
Risk static
New risk
Health, Safety & Wellbeing of Customers,
Communities and Employees
Retail Managing Director, Chief People Officer and Chief Governance Officer
Trading, Liability and
Pricing Management
Chief Operating Officer
Risk category
Operational
Reputational
Strategic
Impact: Medium
Likelihood: Low
Oversight: ESG Committee
Risk category
Commercial
Operational
Strategic
Impact: Medium
Likelihood: Medium
Oversight: Audit Committee
Principal Risk/Uncertainty
Strategic relevance
Principal Risk/Uncertainty
Breaches in the Group’s HSSE and safer
gambling policies could lead to criminal,
civil and or regulatory sanctions, along
with significant reputational damage and
negative implications on employee morale
and customer goodwill.
Failure to protect our customers and
employees may result in Entain not
achieving our strategic aim of being a
responsible operator or the best place to
work. Not only will this lead to a reduction
in the quality of colleagues but also our
abilities to recruit and retain the talent of
the future.
Link to strategic objective: 6 & 8
The Group may experience significant
losses as a result of a failure to determine
accurately the odds in relation to any
particular event and/or any failure of its
price risk management processes.
How we manage and mitigate the risk
The Group has some of the leading
expertise in trading liability management
and the Group’s trading team has
developed the skills and systems
to be able to offer a wide range of
betting opportunities.
Events are priced in order to achieve an
average return to the bookmaker over
a large number of events and therefore,
over the long term.
The Group’s gross win percentage has
remained fairly constant in recent years.
Executive management monitor the
gross win margin on a daily basis in
order to ensure the long-term targets
are achieved.
Strategic relevance
A run of customer favourable results
or a mismanagement of the trading
book could significantly impact the
Group’s profitability.
Link to strategic objective: 2
Failure to meet the requirements of
the various domestic and international
rules and regulations relating to the
health and safety of our employees and
our responsibilities and commitments
towards customers and communities
could expose the Company to material
civil, criminal and/ or regulatory action
with the associated financial and
reputational consequences.
How we manage and mitigate the risk
Entain’s Retail and digital businesses have
numerous policies and procedures in place.
Annual training and communication plans
to all staff within these segments, as well
as specific communications to staff across
the wider Group continue to take place.
The Group’s ESG Committee also oversee
all aspects of Health, Safety, Security and
Environmental (“HSSE”) practices.
We provide a caring and supportive
environment for our colleagues and take
their welfare seriously.
In addition to Private Medical support
available for many colleagues, we provide
mental health support for our people
via our global employee assistance
programme, wellbeing app and various
wellbeing initiatives run throughout
the year.
As a large corporate we also recognise our
impact on society and local communities
and as part of the Entain Foundation we
have committed to donating £100m over
five years to 2025.
Entain plc | Annual Report 2021 Strategic report 85
Loss Of Key Locations
Chief Operating Officer
Pandemic
Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer
Recruitment and Retention
of Key Employees
Chief People Officer
Risk category
Operational
Impact: Medium
Likelihood: Low
Oversight: ESG Committee
Risk category
Operational
Financial
Commercial
Impact: Medium
Likelihood: High
Oversight: Board
Risk category
Operational
Impact: Medium
Likelihood: Low
Oversight: Board
Principal Risk/Uncertainty
Principal Risk/Uncertainty
Principal Risk/Uncertainty
Whilst the Group operates out of a
number of geographical locations, there
are a number of key sites which are
critical to the day-to-day operations of
the Group, including our offices in Central
London, Gibraltar, Vienna, Hyderabad,
Australia, Italy, Ireland and Manila.
Disruption in any of these locations could
have an impact on operations.
Further waves of pandemic affecting
individual countries or continents
resulting in the closure of all or part of
our Retail estate or the cancellation/
postponement of major sporting events,
eg football, horse racing which may result
in financial losses, service outage or an
inability to protect our colleague’s well-
being.
How we manage and mitigate the risk
How we manage and mitigate the risk
Business continuity plans and
arrangements for off-site data storage,
alternative system availability and
remote working for key operational
colleagues and senior management have
been tested to certain extents throughout
the Covid-19 pandemic and continue to
be subject to ongoing review.
Strategic relevance
Loss of a key location could impact
the Group’s ability to offer product to
its customers impacting its ability to
generate revenues.
Link to strategic objective: 2
At various points through 2021 and
into 2022, the Group has been able to
enact its plans to move the majority of
its colleagues to home working without
any loss of service (excluding Retail
closures) despite the announcement of
worldwide lockdowns.
Through its diverse product and
geographic offering, the business has
been able to leverage its business model
to quickly respond to changing customer
needs and therefore maintain strong
trading throughout. The Group continues
to monitor the risks in each of its local
operations both on trading and the health
& safety of its colleagues, the latter of
which is our number one priority.
Strategic relevance
Closure of our retail shops or the
cancellation of sporting events may result
in financial losses, our ability to generate
revenues and affect overall profitability.
Link to strategic objective: All objectives
The people who work within Entain are
pivotal to the success of the Company
and our failure to attract or retain key
individuals may impact our ability to
deliver on our strategic goals.
How we manage and mitigate the risk
Building on the successful launch of
our award-winning employer brand,
our People Strategy focusses our
efforts on securing and retaining the
best talent, providing a market leading
working environment and the best
employee experience.
Our talent management and reward and
recognition programmes are continually
assessed through a number of regular
colleague feedback mechanisms and
external benchmarking.
Strategic relevance
A pre-requisite to achieving all of the
strategic priorities is ensuring we
have the right people with the right
skills, deployed within the right area of
the business. Failing to recruit/retain
the best people could significantly
impact the Group achieving all of its
strategic objectives.
Link to strategic objective: 8
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 86
Viability Statement
In accordance with provision 31 of the 2018 Corporate Governance
Code, the Board and Directors have completed an assessment
of the prospects and viability of the Entain Holdings PLC Group
over a longer period than the 12 months required by the “Going
Concern” provision.
The Directors have concluded that three years was an appropriate
period for assessment, as this is aligned to the Group’s strategic
planning process and is considered to be the period for which
reliable estimates can be made for variations in both industry
and customer dynamics, regulatory change, technological
advancements and the economic backdrop in the betting and
gaming industry taking into account the changing landscape as
a result of the Covid-19 pandemic.
The objectives of the strategic planning process are to further
develop the businesses understanding of the markets in which
it operates, assess the risks and opportunities facing the
business and develop a Group-wide strategy and associated
financial forecasts.
The Directors have utilised these strategic forecasts, the 2022
Board approved budget and the current financial position of
the Group to assess the potential impact on viability of certain
severe, but plausible, “risk events” arising which represent the
crystallisation of the Group’s principal risks and uncertainties as
identified on pages 81 to 85 of this Annual Report. The assessment
conducted considered the Group’s revenue, EBITDA, operating
profits, cash flows, risk management and controls, its current debt
maturity and anticipated refinancing profile and mitigating actions
should baseline assumptions change.
The financial impact of the identified risk events has been assessed
both individually and in combination and include:
The impact of a significant change in the Group’s duty profile,
including further changes in gaming taxes in key geographies
Significant changes in the regulatory environment including
gaming restrictions in key markets, further focus on AML
legislation in the UK by the Gambling Commission and breaches
in data privacy regulations
Cyber security failings, and major disruption in supplier/
customer contracts
Downturn in trading as a result of a failure to protect customers
and/or retain key staff
The Directors have also performed reverse stress tests to assess
the level of liquidity and covenant headroom in the underlying
forecasts as well as considering the potential impacts of Brexit in
forming their view on viability.
Based on the results of this analysis and the mitigating actions
available to the business, the Directors confirm that they have a
reasonable expectation that the Company will be able to meet its
liabilities as they fall due over the three-year assessment period to
December 2024.
Entain plc | Annual Report 2021 Strategic report Overview | Strategic report | Governance | Financial statements
8787
Governance
Governance
89
91
103
109
112
115
141
Board of Directors
Chief Governance Officer’s Report
Audit Committee Report
ESG Committee Report
Nomination Committee Report
Directors’ Remuneration Report
Directors’ Report
Entain plc | Annual Report 2021
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 88
Board of Directors
(as at 3 March 2022)
Attendance
Meetings attended:
100%
All Board
members
maximum
Tenure
Years:
0
1
2
3
4
5
6
Barry Gibson
Jette Nygaard-Andersen
Rob Wood
Robert Hoskin
Pierre Bouchut
Stella David
Mark Gregory
Peter Isola
Vicky Jarman
Virginia McDowell
David Satz
Age
40-44
45-49
50-54
55-59
60-64
65-69
70+
No. of Directors
1
1
Experience / Skills:
No. of Directors
5
4
2
3
2
2
3
5
1
1
1
5
Gaming
Sector
Financial
Legal /
Regulatory
Technology /
eCommerce
Marketing
Entertainment
Leadership
Diversity
Gender
British
American
French
Danish
No. of
Directors
7
2
1
1
4:7
Entain plc | Annual Report 2021
Governance Key:
A Audit Committee Member
N Nomination Committee Member
A Audit Committee Chair
N Nomination Committee Chair
R Remuneration Committee Member
E ESG Committee Member
R Remuneration Committee Chair
E ESG Committee Chair
89
J M Barry Gibson
Chairman
Jette Nygaard-Andersen
Chief Executive Officer
Rob Wood
Chief Financial Officer and Deputy CEO
Tenure: Appointed to the Board November 2019 and
became Chairman in February 2020.
Age: 70 Nationality: British
Committee / attendance:
N 3/3
Biography: Barry was previously a non-executive director
of William Hill plc and bwin.party digital entertainment plc,
where he was the senior independent director. He was the
group retailing director at BAA plc, group chief executive
of Littlewoods plc, non-executive chairman of Harding
Brothers Holdings Ltd, non-executive director of both
Somerfield plc and National Express plc and chairman of
HomeServe plc.
Key strengths and experience:
Barry is an experienced chairman, chief executive, senior
independent director and non-executive director, with
extensive experience of the gaming, leisure, retail and
marketing sectors. He has deep business experience and
a track record in improving company performance and
customer service.
Tenure: Appointed to the Board as Chief Financial Officer
in March 2019; the role of Deputy CEO was added to his
portfolio in January 2021.
Age: 42 Nationality: British
Biography: Rob joined Entain in 2012 and worked in senior
roles within finance, including as CFO of the Group’s retail
business. Prior to Entain, he was senior vice president
at Cerberus Capital, overseeing the private equity firm’s
European portfolio companies and worked in restructuring
advisory at Rothschild. Rob started his career at KPMG
where he qualified as a chartered accountant and holds a
degree in Mathematics and Management Studies from the
University of Nottingham.
Key strengths and experience:
Rob brings extensive financial experience to the
Board from private equity, banking and accountancy.
His knowledge of Entain’s business and experience in
creating value through mergers and acquisitions enables
him to effectively carry out his broad portfolio as CFO and
Deputy CEO.
Tenure: Appointed to the Board as Non-Executive
Director in December 2019. Appointed as Chief
Executive Officer and Executive Director in January
2021.
Outside interests: Non-executive director of Coloplast
AS (a medical technology company listed on the
Copenhagen Stock Exchange) and a member of their
remuneration and nomination committees.
Age: 53 Nationality: Danish
Biography: Jette held a number of senior leadership
roles at Modern Times Group AB, a listed international
entertainment group with a strong presence in
Scandinavia and Central Europe. These included being
chief executive of Pay TV, Broadcasting and, latterly,
CEO of Digital Video Content, which had ownership in
next generation digital entertainment businesses such
as video gaming companies, esports and social content
platforms. She also chaired the board of Astralis Group
A/S, an international esports organisation.
Key strengths and experience:
Jette joined as Chief Executive on 21 January 2021,
having previously spent one year on the Entain
Board as a Non-Executive Director. She has over
two decades of leadership experience in the media,
sports and entertainment sectors, including working
with companies to disrupt industries through global
technology in international markets. Jette has a proven
track record in digital transformation, optimisation of
customer experience and engagement and working with
digital growth start-ups globally.
Robert Hoskin
Chief Governance Officer
Pierre Bouchut
Independent Non-Executive Director
Stella David
Senior Independent Director
Tenure: Appointed January 2021
Tenure: Appointed September 2018
Tenure: Appointed March 2021
Age: 50 Nationality: British
Biography: Robert joined Entain in 2005 and served
as Group Director of Legal, Regulatory and Secretariat,
overseeing its corporate governance, legal and regulatory
requirements across more than 20 countries in five
continents and supported various M&A transactions.
Prior to Entain, he headed up the Investment Company
Secretariat at Aberdeen Asset Management.
Key strengths and experience:
Robert is a qualified and experienced chartered secretary
with significant insight into Entain and the markets in
which it operates following his 16 years at the Group, over
which time he has overseen the Group evolve from holding
two gambling licences to more than 100. His experience
and knowledge has been instrumental to the Group’s
growth and development, and his appointment as Chief
Governance Officer reflects the importance the Board
places on regulatory, legal and governance matters, all of
which are central to our long-term growth plans to build a
responsible and sustainable business of global scale and
world class standards.
Outside interests: Non-executive director, board member
of Tom & Co and chairman of the audit committees at
Pepco Group, Firmenich SA, Albioma SA and GeoPost SA.
Outside interests: Non-executive director of Domino’s
Pizza Group plc (where she chairs the remuneration
committee), HomeServe plc, Norwegian Cruise Line
Holdings and privately owned Bacardi Ltd.
Age: 66 Nationality: French
Committee / attendance:
A 7/7 N 3/3
Age: 59 Nationality: British
Committee / attendance:
R 7/7 N 1/1 E 7/7
Biography: Pierre was the chief financial officer for
Schneider Group (2005-2009), the chief operating officer
for Europe at Koninklijke Aholddelhaize N.V. (2016-2018),
chief financial officer at Delhaize Group SA, French
multi-national grocery group (2012-2016), Carrefour SA
(2009-2012), Schneider Electric SA (2005-2009) and
Casino (1995-2003). He was also a non-executive director
of Hammerson plc (2015-2021). Prior to this, Pierre worked
for Citibank, Bankers Trust and as a consultant with
McKinsey.
Key strengths and experience:
Pierre has lengthy experience in senior executive and
non-executive roles across finance, retail, property
and industry as well as deep knowledge of financial
and audit committee practice. His familiarity with the
management of large, internationally listed companies
gives him extensive understanding of regulation,
accounting standards and management practice. This
broad experience makes him suited to chair Entain’s Audit
Committee and to act as its financial expert.
Biography: Stella David was previously CEO of William
Grant & Sons, following more than 15 years with Bacardi
Ltd where she undertook a number of roles culminating
in five years as global chief marketing officer, and under
her leadership Bacardi finished in the UK’s top 10 of the
Sunday Times ‘100 Best Companies to Work For’, five
years in a row, earning her a life-time achievement award.
She was chair of C&J Clark Ltd and spent seven years as a
non-executive director at the Nationwide Building Society,
where she chaired the remuneration committee.
Key strengths and experience:
Stella brings extensive management and marketing
experience to the Board through previous roles in high-
profile consumer branded companies. Her non-executive
roles have given her an insight into corporate governance
best practice and investor expectations which will be
beneficial to the Board when it considers its engagement
with shareholders.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 90
Key:
Board of Directors continued
A Audit Committee Member
N Nomination Committee Member
A Audit Committee Chair
N Nomination Committee Chair
R Remuneration Committee Member
E ESG Committee Member
R Remuneration Committee Chair
E ESG Committee Chair
Mark Gregory
Independent Non-Executive Director
Peter Isola
Independent Non-Executive Director
Vicky Jarman
Independent Non-Executive Director
Tenure: Appointed March 2021
Tenure: Appointed February 2016
Tenure: Appointed March 2021
Outside interests: Non-executive director of Direct Line
Insurance plc where he chairs the board risk committee
and is a member of the audit, remuneration and investment
committees.
Age: 58 Nationality: British
Committee / attendance:
R 6/6 N 1/1 A 6/6
Biography: Mark was the CEO of Merian Global Investors
from 2019 to 2020. Prior to this, he held the role of group
CFO and executive director at Legal & General Group plc
until 2017. During his 19-year career at Legal & General,
he held a variety of other senior roles including CEO of the
Savings business, managing director of the With-Profit’s
business, director of service operations, group HR director
and international director. Before joining Legal & General,
Mark held senior financial and business development roles
at Asda and Kingfisher.
Key strengths and experience:
Mark has extensive knowledge of financial services
and a focus on customers through his lengthy career in
the insurance and retail sectors. He is an experienced
remuneration committee chair who brings deep financial,
commercial and corporate governance expertise to
the Board.
Outside interests: Commissioner to the Gibraltar Financial
Services Commission. Non-executive director of Gibraltar
International Bank.
Outside interests: Non-executive director of Great
Portland Estates Plc and Melrose Industries Plc.
Age: 63 Nationality: British
Committee / attendance:
E 6/6
Biography: Peter is the Senior Partner of ISOLAS LLP,
Gibraltar’s longest established law firm. He is a former
President of the Gibraltar Chamber of Commerce and
advises the Government of Gibraltar on a number of
committees in both financial services and gaming.
Key strengths and experience:
Peter has worked in the gaming and financial services
sector all of his professional life and is widely recognised
and respected as a leading expert in gaming law and
regulation.
His wealth of experience within the financial services,
insurance and gaming sectors, and in-depth knowledge
enables him to contribute important insight and
perspective to the Board and ESG Committee discussions
as well as provide constructive challenge on strategy.
Age: 49 Nationality: British
Committee / attendance:
A 6/6 R 7/7
Biography: Vicky spent over a decade working with
Lazard and Co Ltd in its corporate finance team where she
held various senior roles including chief operating officer
for the London and Middle East operations until 2009. Prior
to this she qualified as a chartered accountant at KPMG.
She was previously a non-executive director and chair of
the audit committees of each of Equiniti Group plc, Hays
plc and De La Rue plc, the senior independent director at
Equiniti Group plc and non-executive director of Knight
Frank LLP and Signature Aviation plc.
Key strengths and experience:
Vicky has deep corporate finance and accounting
knowledge. Her extensive non-executive directorship
career at international and FTSE companies, including
membership of audit and remuneration committees has
brought further depth and strategic insight to Entain’s
Board.
Virginia McDowell
Independent Non-Executive Director
Designated Workforce Director
Tenure: Appointed June 2018
Outside interests: Vice-president of Global Gaming
Women, a non-profit organisation with a mission to
support, inspire and influence the development of women
in the gaming industry through education and mentoring
and trustee of St Louis University.
Age: 64 Nationality: American
Committee / attendance:
E 6/6 N 3/3 R 8/8
Biography: Virginia was the president and CEO of Isle of
Capri Casinos, Inc. in the United States from 2011 until
her retirement in 2016, and the president and COO of
Isle of Capri (2007- 2011). Prior to this she was the chief
information officer at Trump Entertainment Resorts (2005-
2007) and senior vice president of operations. Virginia is
also the first woman to be inducted into the Mississippi
Gaming Hall of Fame.
Key strengths and experience:
Virginia has spent her entire career in the gaming
sector, with 40 years of experience in top US publicly
traded gaming corporations. She possesses a deep
understanding of the diversity and regulatory challenges
of the gaming business which has assisted the Board
and the ESG Committee and has engaged with our
stakeholders in her role as designated Workforce Director.
Her hard work has been recognised over the years with
several prestigious awards.
David Satz
Independent Non-Executive Director
Tenure: Appointed October 2020
Outside interests: Member of the board of a commercial
gaming and hospitality entity established by the Eastern
Band of Cherokee Indians (EBCI).
Age: 62 Nationality: American
Committee / attendance:
E 6/6 A 3/3
Biography: David was senior vice president of
Government Relations and Development for Caesars
Entertainment Corporation in Las Vegas, where he worked
from 2002 to 2019 and had responsibility for overseeing
Caesars’ government activities for more than 52 properties
in 15 states in the US and several other countries around
the world. Prior to this he spent 16 years at the US law
firm Saiber Schlesinger Satz Goldstein LLC, where he had
a particular focus on the gaming industry and played a
key role in numerous regulatory and legislative initiatives
throughout the US.
Key strengths and experience:
David has unrivalled regulatory and legislative expertise
in the all-important US gaming market. His knowledge
and insight has been invaluable to the Board as it seeks
to achieve its strategy of being the leading operator in the
US through BetMGM, our fast-growing joint venture with
MGM Resorts.
Entain plc | Annual Report 2021 Governance Chief Governance Officer’s Report
91
The Board
Since my last annual report the Board appointed Mark Gregory
as an independent Non-Executive Director as the Chair of
the Remuneration Committee. The Board now consists of the
Chairman, three Executive Directors and seven independent Non-
Executive Directors, with female Directors making up 36% of the
Board’s membership.
In last year’s Report we outlined that Sandeep Tiku, Entain’s COO
was due to become a Director once he relocated from India to
Gibraltar. This move was frustrated in 2021 by the ongoing global
pandemic travel restrictions and Sandeep being hospitalised by
the virus (he made a full recovery). Sandeep has notified the Group
that he no longer intends to relocate to Gibraltar and will therefore
not be appointed to the Board. As a result, the Board will not
meet the recommendations of the Parker Review on an ethnically
diverse composition. The Board believes an inclusive and diverse
membership results in optimal decision-making. Our Nomination
Committee is undertaking an active search to appoint a Director
from an ethnically diverse background.
Entain’s Governance Team
We have continued to strengthen the governance team at Entain.
As mentioned in my 2020 report, our new General Counsel,
Simon Zinger joined the Group in February 2021. Simon comes
from outside the industry and with a fresh pair of eyes he has
been instrumental to making enhancements to our governance
and compliance practises and overseeing further changes and
recruitment into the legal and regulatory compliance teams, with a
particular focus on succession planning and improving the bench
strength of the teams. Martin Lycka moved from being the Director
of Regulatory Affairs to a new role based in the USA, Senior
Vice President of American Regulatory Affairs and Responsible
Gambling, overseeing Entain’s initiatives in these areas in North
and Latin America. This move has already paid dividends as Entain
won SBC Award’s North America Socially Responsible Operator of
the Year at the end of 2021.
In conjunction with this change, Grainne Hurst expanded her
UK regulatory affairs remit and took over regulatory affairs
oversight for the rest of the world (excluding the Americas), whilst
also retaining her management of our safer gambling strategy.
Grainne and her team, were key to planning and the success of our
industry leading Entain Sustain event held in November, which is
reported on separately. Grainne works closely with Peter Marcus
who was appointed to the new role of Director of Regulatory
Operations at the beginning of 2021 and in this position Peter
has been managing the development and roll-out of our sector
leading Advanced Responsibility & Care™ (ARC™) programme.
ARC™ is a critical element of our commitment to responsibility and
sustainability and commentary on this project can be found on
pages 46 to 47.
All four roles mentioned above attend ESG Committee meetings
and have direct access to Virginia McDowell who chairs
the Committee.
A key pillar of Entain’s
ESG strategy is to adopt
a gold standard corporate
governance framework.”
Robert Hoskin
Chief Governance Officer
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 92
Chief Governance Officer’s Report continued
Governance & Compliance Review
During 2021 Alvarez & Marsal, an independent professional firm,
completed their review of the Group’s governance and compliance
practices. A key pillar of Entain’s sustainability strategy is to adopt
a gold standard corporate governance framework and it was
logical to bring in a third party to review our arrangements to get
an objective analysis and avoid Entain being accused of marking its
own homework.
This thorough review process, which took several months and
with which all colleagues cooperated concluded well, with
Alvarez & Marsal making the following comments in their final
summary report:
“In our view, Entain has put in place all the key components of
a compliance framework to enable it to identify and manage its
general compliance and regulatory risks.”
“It is clear that there has been a significant investment in
both resources and technology to develop and implement the
compliance framework over recent years. The arrangements
provide for clear Board and senior level oversight of compliance
risk and how it is being mitigated, including through a governance
structure of committees that enables oversight, discussion,
and escalation of issues. We observed a good ‘tone from the
top’ that is driving the development of strong governance over
compliance issues.”
“We noted a strong culture during our interviews with key staff
and executives of driving improvement and enhancement.
The committee and escalation framework provides a mechanism
for issues to be escalated to the appropriate level. We noted that
management responds appropriately to Internal Audit issues and
challenge from the Board and its Committees.”
Entain’s governance reporting structure:
Chief
Governance
Officer
Senior VP
for American
Regulatory
Affairs &
Responsible
Gaming
Covers regulatory
affairs and responsible
gambling in the US,
Canada & Latin America
Director of
Corporate
Affairs
Covers global
(excluding
the Americas)
regulatory and
government
affairs and global
safer gambling
strategy
Director –
Regulatory
Operations
Covers design &
implementation of
ARC™ and regulatory
operational changes
Company
Secretary
Covers plc and
subsidiary
corporate
governance
Key areas of focus for 2022
Address the recommendations in the
Alvarez & Marsal report.
General
Counsel
Covers legal, data privacy
& security, regulatory
compliance and Group
anti-money laundering
Enhance colleague governance and compliance
training with further recruitment overseen by a newly
recruited Group Head of Ethics & Compliance.
Continue to enter new domestically licensed
markets with a focus on the Americas, Africa and
Eastern Europe.
Develop and roll-out ARC™ in selected
international markets.
Continue to progress resolution of the
HMRC investigation.
Hold a follow-up Entain:Sustain conference to ensure
ongoing transparency and accountability around our
ESG practises.
Entain plc | Annual Report 2021 Governance Whilst the Board is pleased with the overall conclusion, it recognises Entain is on a journey and so there were some recommendations
coming out of the report; the one’s being most pertinent to the Board and its Committees are set out in the table below:
Alvarez & Marsal Recommendation
Entain Response
93
ESG Committee: responsibilities
The ESG Committee yearly agenda is substantial,
encompassing a broad range of topics: risk, compliance,
environmental and social issues. The Group recognise this
and as a result, the number of meetings per year has been
increased to six to accommodate the increased agenda.
We recommend that the Board specifically consider in
its annual evaluation if the current structure has enabled
sufficient focus on compliance issues and sufficient time for
the appropriate depth and challenge in meetings.
Board Risk Committee
In order to maintain adequate oversight of key risks as
the risk framework matures and to demonstrate effective
corporate governance, establishing a Board Risk Committee
would be, in our view, both beneficial and necessary.
Board Committee responsibilities
The control oversight at Board level is split between the Audit
Committee and the ESG Committee. Until recently second
and third line inputs on controls were segmented across the
Audit Committee and the ESG Committee. Internal Audit
and Risk submitted to the Audit Committee, and Compliance
to the ESG Committee. Internal Audit reports are now also
submitted to the ESG Committee. We recommend that both
Committees review the scope of the materials received to
confirm that it supports the scope of responsibilities set out in
their respective terms of reference.
Second line compliance testing
Additional staff resources are currently being added to
Compliance to enable Compliance to perform second
line testing. We recommend that this Compliance testing
activity is thoughtfully coordinated with both the first line
and Internal Audit so that there is an effective three lines of
defence approach. Compliance testing should be focused
on monitoring the effectiveness of the first line controls over
business/operational activity.
Risk Function
We recommend that the Risk function is given more weight
in the organisation. It should be a better resourced, free-
standing second line function with a more complete set of risk
tools and capabilities and should be led by a senior person.
Management has considered (including the UK and
International Compliance Directors) and confirmed that
the current reporting and meeting structure enables a
sufficient level of oversight of compliance issues for the
ESG Committee. The ESG Committee has also reviewed
this as part of the annual performance evaluation and
confirms sufficient time is allocated to compliance issues.
As the Group acquires licences in more jurisdictions and
regulation generally evolves and matures, this matter will be
reviewed annually.
Having considered the responses to the Board performance
annual evaluation the Board does not consider it the right
moment to set up a fifth Board Committee to solely oversee
risk. The Board believes that for the time-being risk is
adequately overseen by the Board, Audit Committee and the
ESG Committee. As risk governance is expected to evolve
further in the Group (see below), the Board will revisit this
point in 2023.
Management has reviewed and confirmed that the Audit
Committee and ESG Committee receive sufficient information
and materials from Internal Audit and Compliance teams
in order to meet their duties under the terms of reference.
The Audit and ESG Committees have confirmed as part
of the annual performance evaluation that the Directors
are comfortable that each Committee receives sufficient
information to allow them to perform their duties.
Compliance management in consultation with Internal Audit
had already decided prior to the review to move the second
line of defence from under the Director of Internal Audit to
under the Compliance Directors to make the second line
review process more dynamic in engaging with the first
line. Compliance, AML and Internal Audit leads have been
liaising to establish this function and consider resourcing.
This function has now been set up and resources recruited
in both the UK and International Compliance teams. A 2022
risk-based compliance monitoring plan has been actioned.
Whilst progress on the evolution of our Group-wide Risk
Management Framework has been hampered during 2021
following the loss of our Head of Risk for personal reasons,
we have continued to develop and extend the capabilities of
the Group Risk function during the year as discussed in the
Risk section of the Annual Report.
Whilst the evolution of the Risk function continues,
management acknowledge and accept the finding of the
Alvarez and Marsal review. As such, management have
committed to presenting all options available to the Board
for accelerating the evolution of the Risk function and the
creation of a stand-alone second line of defence. The Board
will then decide on the direction of the Risk function and its
objectives for 2022 and beyond.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 94
Chief Governance Officer’s Report continued
Compliance Committees
HMRC Update
We have previously disclosed that the Group is cooperating with a
long-running investigation by the UK’s tax authority, HM Revenue
& Customs (“HMRC”) into a number of former third party suppliers
who provided payment processing services to the Group’s legacy
Turkish-facing online gambling business. That business was sold in
2017. HMRC’s investigation is ongoing into the activities of one or
more members of the Group and the offences under investigation
include, but are not limited to, offences under sections 1 and 7 of
the Bribery Act 2010. The Group continues to cooperate fully with
HMRC’s enquiries.
Robert Hoskin
Chief Governance Officer
3 March 2022
During the year the management team has moved from a monthly
Executive Compliance Committee reviewing developments across
all jurisdictions to establishing a number of sub-committees
focused on particular jurisdictions such as the UK, US, Germany
and Australia. This was done in recognition of the fact that
gambling regulation continues to develop and become more
complex and the Group is obtaining more licences. The sub-
committees allow more time for a deeper dive into the issues
associated with a particular territory.
Regulatory Strategy Status
In November 2020 Entain announced as part of its sustainability
strategy that it would only take revenues from countries where
the Group held a domestic licence, or could partner with a
locally licensed operator or the jurisdiction was in the process of
introducing a regulatory regime under which the Group could apply
for a licence.
In 2021 Entain acquired the Bet.pt and Enlabs businesses, bringing
into our licence portfolio licences in Portugal, Latvia, Estonia and
Lithuania. Entain was also successful in May in getting re-licensed
in the state of Nevada. The Group is now licensed in 31 territories
and its US JV partnership, BetMGM is licensed and operational now
in 21 US markets. As part of our regulated market commitment,
we also closed our gambling offerings in a further seven countries
where we concluded there was little or no realistic licensing
opportunity. The largest of these markets was Russia, where the
Group has concluded that there are no prospects of obtaining a
legitimate licence for any of its sports betting or gaming offerings
on commercially attractive terms.
For 2022 we are planning on entering at least two African markets
with our bwin brand, the Polish sports betting market, the Dutch
sports betting and gaming market, the Mexican gambling market
and securing a licence in the Canadian state of Ontario. We also
expect to gain further licences in 2022 as we complete various
M&A projects.
Entain plc | Annual Report 2021 Governance Governance framework
Audit Committee
Responsibilities
Oversight of financial
reporting processes
Integrity of
financial statements
Reviews audit effectiveness
including internal controls
Supports the Board on
risk management
Advice on external auditor
Nomination Committee
Responsibilities
Reviews composition of the
Board and its Committees
Leads Board
appointments process
Maintains strong NED pipeline
Reviews independence and
outside commitments of NEDs
Reviews Board
diversity policy
Remuneration Committee
Responsibilities
Recommends the Remuneration Policy
Determines remuneration packages of
Executive Directors and ExCo members
Monitors alignment of pay and
incentives for the wider workforce
Maintains dialogue with shareholders
and workforce on remuneration
Reports on implementation of the
Remuneration Policy
Entain plc
Board
CEO
Executive Committee (ExCo)
Responsibilities
Advisory Committee to support the CEO on
the management of the Group’s operational
and financial performance
95
ESG Committee
Responsibilities
Reviews ESG policies and
controls for managing
the Group’s relationships
with stakeholders
Monitors the Group’s ESG
performance, including
against KPIs and ensures
the ESG strategy remains fit
for purpose
Chairman’s Committee
Responsibilities
Reviews structure and
effectiveness of the
Group’s organisation
and management
Reviews executive succession
and performance
Global Leadership Team
Direct reports to ExCo
Approx. 20 people
Senior Leadership Team
Approx. 80 people
Group Compliance
Committee
Group Payment
Processing Committee
Group Risk
Committee
ESG Steering
Group
Regional
Compliance Committees
Divisional Risk
Forum
Functional Risk
Forum
Net Zero
Group
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 96
Board attendance and composition
Board Commitment, Balance and Independence
Each Non-Executive Director (“NED”) must be able to devote
sufficient time to the role in order to discharge his or her
responsibilities effectively and the Board is satisfied that the
Chairman and each of the NEDs devotes sufficient time to
their duties.
Excluding the Chairman, of the remaining ten Directors, seven are
independent NEDs. The Nomination Committee, having considered
the matter carefully, is of the opinion that all the current NEDs
remain independent. The composition of all Board Committees
complies with the 2018 Code recommendations.
Director meeting attendance for 2021
The Board had six scheduled meetings in 2021 and a further five
ad-hoc meetings.
Chairman
Barry Gibson
Executive Directors
Shay Segev
(resigned 21 January 2021)
Jette Nygaard-Andersen
(appointed 21 January 2021)
Robert Hoskin
Rob Wood
Non-Executive Directors
Pierre Bouchut
Stella David
(appointed 4 March 2021)
Mark Gregory
(appointed 17 March 2021)
Peter Isola
Vicky Jarman
(appointed 4 March 2021)
Virginia McDowell
Stephen Morana
(resigned 4 March 2021)
Jette Nygaard-Andersen
(Non-Executive Director until
21 January 2021 when she was
appointed CEO)
David Satz
Meetings
attended/
eligible to
attend
Independent
Independent
upon appointment
11/11
2/2
8/8
11/11
11/11
11/11
6/6
6/6
11/11
6/6
11/11
5/5
2/2
11/11
Entain plc | Annual Report 2021 Governance 97
t
h
g
i
s
r
e
v
O
Roles and responsibilities of the Entain Board
Entain plc Board
Responsible for the long-term success
Responsible for risk oversight
of the Group
Establishes strategy and monitors
its implementation
Has regard to the interests of stakeholders
in its decision making
Leads and directs the Group’s values,
culture and purpose
Sets the standards of integrity, ethics and
conduct within the Group
Responsible for the overall financial
performance of the Group
Responsible for the Group’s
corporate governance
e
v
i
t
u
c
e
x
E
-
n
o
N
e
v
i
t
u
c
e
x
E
Chairman
Leads the Board and
is responsible for its
overall effectiveness
Ensures the Board as a whole
develops and determines
the Group’s strategy
and objectives
Acts as guardian of the
Board’s decision making
Oversees the
effective engagement
with stakeholders
Responsible for succession
planning, director
development and evaluation
Senior Independent
Director
Supports the Chairman in
his role
Leads the Non-Executive
Directors in evaluating the
performance of the Chairman
Non-Executive
Director
Constructively challenges
and contributes to the
development of the strategy
Monitors the
Group’s performance
Acts as intermediary for other
Ensures that financial
Non-Executive Directors
when required
Be available to shareholders
if they have concerns which
have failed to be resolved by
the Chairman, CEO or CFO
Leads an orderly succession
process for the Chairman
Chairs the Board in the
absence of the Chairman
information is accurate and
that both controls and the
system of risk management
are effective and robust
Responsible for determining
Executive Director
remuneration and overseeing
succession planning of
Executive management
CEO
Leads the Group
Articulates and acts as a role
model for our values, culture
and purpose
Proposes and
implements strategy
Manages the Executive
Committee (“ExCo”)
Responsible, with the
ExCo, for implementing the
decisions of the Board and
its Committees
Promotes and conducts the
highest standards of integrity
within the Group
Engages with stakeholders
Responsible for the
Group’s performance
CFO and
Deputy CEO
Oversees our financial
operations, including
accounting, financial
reporting, tax, control
and treasury
Directs the Group’s financial
objectives and budget
Funds, enables and executes
the Group’s strategy
Chief Governance
Officer
Oversees the Group’s
governance framework
Oversees the Legal and
Compliance function
Oversees government and
regulatory affairs
Chairs the Executive
Environmental, Social and
Governance Steering Group
Provides insight and analysis
to support the CEO and ExCo
Chairs the Group
Risk Committee
Responsible for M&A activity
Chairs the Group Compliance
Responsible for
Retail operations
and Group Payments
Processing Committees
y
t
i
l
i
b
a
t
n
u
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c
c
A
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 98
The Board and stakeholder considerations
Entain’s purpose is to revolutionise gambling to create the most
exciting and trusted entertainment for every customer; this puts
stakeholders at the centre of the Board’s decision-making. Over the
year the Board sought to promote our purpose and strategy and
made decisions having considered the matters set out in s172 of
the Companies Act 2006 (UK).
Stakeholders
The Board has responsibility for leading the Group’s stakeholder
engagement and considering the implications of key decisions
on the Company and its stakeholders. The Board recognises that
effective engagement with our stakeholders will drive long-term
value creation, making Entain a company that people want to
invest in, buy from, partner with and work for.
Entain has identified six stakeholder categories and our report
on Board Activities provides an overview of how the Group’s key
stakeholders are considered in Board discussions and deliberations
on strategy.
Entain’s Global Conference was held in December 2021.
The Conference considered a range of people-related topics from
mental health to employee onboarding processes, but specifically
focused on the ongoing impact of the Covid-19 pandemic,
both holistically across the Group, and the varied experience of
individual business units. It was at this event that Mark Gregory
(Chair of the Remuneration Committee) announced the increase to
the minimum rate of pay in excess of the Real Living Wage for UK
retail colleagues. The Conference supported the proposed increase,
agreeing that a more competitive salary reflected the strength and
resilience shown by UK retail colleagues throughout the pandemic;
and would also enable the Company to attract and retain talent.
From a remuneration perspective, Mark Gregory’s attendance
at the Global Conference offered colleagues from across the
Company the opportunity to openly share their experiences,
views, and thoughts on working life at Entain, and specifically
on remuneration. Valuable insights gained from this and future
employee events enable Mark and the Remuneration Committee
to better understand the individual roles our colleagues play in
delivering our strategic objectives.
1. Shareholders
2. Employees
3. Suppliers
4. Customers
5. Communities
6. Regulators
During the year, the Board gave regard to the differing needs of
its stakeholders in its decision making, recognising that the global
pandemic had impacted their interests and views – for example,
balancing the need to preserve cash to support our people,
suppliers, customers and communities during a time of uncertainty
versus our shareholders’ wish to receive dividend income.
Our people
We have a number of colleague forums within Entain. These play
an important role in providing our people with a voice and allow
them to provide the business with valuable insight and feedback on
a range of topics, including remuneration.
Virginia McDowell, in her capacity as Designated Workforce
Director, remains a regular attendee to Employee Forums, enabling
her to provide the Board (and its Committees) with informed
feedback and insight into the realities of everyday working life
at Entain.
Further information on Section 172
of the Companies Act 2006 can be
found in the Strategic Report
on: page 36
Employee Forum
Virginia McDowell, Chair of the ESG Committee, appointed
as Designated Workforce Director in 2019, attended Entain’s
Global Conference (representing colleagues across the Group)
in December 2021. Throughout her attendance, Virginia
actively engaged in conversations around the ongoing
employee impact of the pandemic; mental health and well-
being; women in leadership initiatives; the future of hybrid
working models; and the cultural embedding of responsible
betting and gaming practices within the Group.
Other Board members, including Mark Gregory (Chair of the
Remuneration Committee), also attended Entain’s Global
Conference, answering questions from colleagues on a range
of topics, including talent acquisition and retention initiatives;
employee onboarding and training programmes; as well as the
cultural embedding of company values, and the importance of
the 2035 drive to reach net-zero.
Board attendance to such events facilitates effective oversight
of everyday life within the company for our employees; and
enables the Board to:
Understand how the strategy has been translated and
implemented into everyday working practices.
Gauge the degree in which the Group’s values have been
culturally embedded.
Understand what really matters to our colleagues.
Engage with our colleagues in open, honest and
candid conversations.
Entain plc | Annual Report 2021 Governance
Shareholders
The Board receives feedback on shareholder views in different
ways, including through the Chairman and executive management
who meet regularly with shareholders throughout the year, as
well as an investor study compiled by an independent third party.
Board members listen in to results and trading updates held by the
Group for analysts and institutional investors and can hear directly
the questions and comments on Company performance.
The Chairman held one-to-one meetings with major institutional
investors during the year, including during the two potential offers
for the Group, collecting their views and sharing these with the rest
of the Board. In addition, the Chair of the Remuneration Committee
held calls with large institutional investors to discuss and receive
feedback on potential developments for our Remuneration Policy.
All resolutions put to the 2021 Annual General Meeting received
overwhelming support of those investors who voted, being
approximately 78% of our shareholder base (a moderate decrease
over the 2020 vote of 82%). The results of the voting at all general
meetings are published on our website: www.entaingroup.com.
99
Entain:Sustain event
For further details see page 43
In November 2021, we held an inaugural sustainability
showcase – Entain:Sustain – which highlighted Entain’s
commitment to and progress in the areas of safer gambling,
diversity and inclusion as well as wider societal and
environmental initiatives. The event included a series of
keynote speeches from prominent Entain colleagues, including
Chief Executive Jette Nygaard-Andersen, ESG Committee
Chair Virginia McDowell, Chief Governance Officer Robert
Hoskin and Entain Foundation Chair, Ed Davis.
The event was held physically in London with over 100
people attending in person, and nearly 200 delegates
joining a specially developed platform online from across the
UK, Europe and US. The audience included shareholders,
regulators, legislators, media, as well as industry stakeholders
and partners.
Topics discussed included:
ARC™: an update on the progress of our Advanced
Responsibility and Care™ programme.
Harvard Medical School Faculty giving an overview of studies
they have conducted in the safer gambling space through
their collaboration with Entain.
Publication of a new Social Impact Report, measuring the
human impact of our support and initiatives globally.
Launch of the new EnTrain initiative – an Entain programme to
support diversity within and access to technology.
An update on the work of the Entain Foundation.
Reducing our environmental impact.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
Board meetings are a key mechanism for Directors to discharge
their duties, notably under Section 172 of the Companies Act
2006 (UK). An overview of the Board’s discussions and how these
considered the Group’s key stakeholders is set out below.
As an Isle of Man incorporated company, Entain is not subject to
the reporting obligations under Section 172 of the Companies Act
2006 (UK). Nevertheless, the Board recognises the importance of
effective governance and intends to operate in line with the UK
reporting regulations.
During 2021 the Group complied with the principles and provisions
of the 2018 UK Corporate Governance Code.
100
Board activities
The Board has responsibility for establishing
the Group’s purpose, values and strategy, as
well as overseeing the conduct of its business
and promoting the long-term sustainable
success of the Group, generating value
for shareholders and contributing to
wider society.
The Board had six scheduled meetings in 2021. In addition there
were a further five meetings arranged during the year concerning
urgent matters such as the succession of the CEO, the appointment
of Non-Executive Directors (including the Senior Independent
Director and Chair of the Remuneration Committee) and potential
M&A activity. Entain received two potential offers in the course of
the year and regular update calls were held for the Board and the
Defence Committee during these events.
Key to stakeholder groups:
S
Shareholders
Su
Suppliers
Co
Communities
E
Employees
C
Customers
R
Regulators
Strategy
Response to potential offers
S E Su C Co R
Evolving the Group’s strategy
S E Su C R
Reviewed updates to the market
S E C Co R
Reviewed and discussed two potential
Held a session for Non-Executive
Strategy investor event.
offers for the Group.
Formed a Defence Committee to
consider a response and work with the
Group’s external advisors.
Held regular updates with the Board
and advisors to discuss developments.
Covid-19
S E Su C Co R
Continued to monitor and reflect on
the impact of Covid-19 on the Group’s
employees, business and stakeholders.
Considered how best to reflect the
uncertainties associated with Covid-19
in the Group’s planning processes
and strategy.
Directors to hear from the new CEO on
her observations and perspectives on
the Group’s strategy.
Considered regulatory and competitor
developments in key markets and its
impact on the Group’s strategy.
Held strategic deep dives on esports,
developments in the US and digital
markets, interactive entertainment and
product development.
Reflected on the importance of
customer focus in our strategy
and growth.
Held a two-day strategy session,
looking at growth in core and new
markets, product development and
technology opportunities.
Inaugural ESG sustainability showcase
Entain:Sustain.
M&A activity
S E Su C R
Received regular updates on potential
M&A opportunities.
Reviewed and approved M&A projects
recommended by management.
Financial Plan
S E Su C
Discussed and approved the Three-
Year plan.
Entain plc | Annual Report 2021 Governance 101
Performance
Business updates
S E C
Risk
S E Su C Co R
People
S E Su
Received updates on the Retail and
Undertook a review of the Group’s risk
Reviewed the status of shop,
Digital businesses.
management programme.
Reviewed and agreed the Principal
Risks for 2022 and their allocation for
monitoring between the Board, Audit
and ESG Committees.
stadia and office closures following
Covid-19 restrictions.
Monitored the Company’s initiatives
to support colleagues impacted by
the pandemic.
Monitored the performance of the
BetMGM joint venture in the US.
Financial updates
S E Su
Reviewed and agreed the Group’s
Devoted a Board meeting to People
Monitored net gaming revenue,
cashflow, dividend cover and credit
facilities in response to the impact of
Covid-19 on the business and agreed
that no dividend would be paid.
Debated the repayment of furlough
monies and the impact of the pandemic
on the Group’s Retail business.
annual long-term viability statement.
Responsible Betting and Gaming
E C Co R
Received regular updates on the
Group’s safer gambling activities,
including our Advanced Responsibility
& Care™ (ARC™) programme.
Reviewed and approved the 2022
Received updates from the ESG
issues, including senior management
succession, organisational strategy,
diversity, talent development
and a review of our Principal Risk
of recruitment and retention of
key employees.
Reflected on the Group’s working
policies, workspaces and needs of our
people in a Covid-19 environment.
Committee monitoring the performance
of the safer betting and gaming
remuneration metric.
Reviewed the structure and work of
the Entain Foundation.
Group budget.
Regulatory updates
S E Su C R
Received regular regulatory updates
from the Chief Governance Officer.
Held deep dives on regulatory
changes in the Group’s key markets
of the UK and Germany and reflected
on their potential impact on the
Group’s strategy.
Governance
Investor feedback
Regulatory disclosures
S
S E R
Risk reviews
S E Su C R
Received written and verbal feedback
Approved the Notice of Meeting for
Bribery and corruption risk review.
on investor meetings from the
Chairman, Remuneration Committee
Chair, Executive Directors and Director
of Investor Relations during the year.
Considered an external report on
the feedback of the launch of Entain
and our new strategy from over 30
institutional investors.
Board succession
S E R
Discussed and approved Executive
and Non-Executive appointments,
including the CEO, the Senior
Independent Director and three Non-
Executive Directors.
the AGM.
Following the Audit Committee’s
recommendation, reviewed and
approved the Annual Report and
Accounts and the Interim and Full
Year results.
Assessed and reported on the Group’s
viability and going concern.
Conflicts of Interest policy
S E Su C R
Reviewed and approved the Board’s
Conflicts of Interest Register.
Criminal Finance Act risk review.
Board governance
S E R
Reviewed and updated the Schedule of
Matters Reserved for the Board.
Held an externally facilitated Board
evaluation covering the effectiveness
of the Board, its Committees and the
performance of the Chairman and
individual Directors.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 102
Board Activities continued
Conflicts of Interest policy
The Board has a Conflicts of Interest policy and an annual conflicts
authorisation process, whereby the Board reviews Entain’s
Conflicts of Interest Register and seeks confirmation from each
Director of any changes or updates to their position.
This authorisation process informs the Nomination Committee’s
assessment of a Non-Executive Director’s independence when
proposing that Director for re-election at the AGM.
Director Induction, Training and Development
The Chairman is assisted by the Company Secretary in providing
all new Directors with a comprehensive induction programme
on joining the Board. The induction programme provides new
Directors with an understanding of their duties as Directors,
the Group, its businesses and the markets and regulatory
environments in which it operates. This includes meeting with
senior executives and their direct reports. The process also
provides an overview of the Group’s governance practices. Non-
Executive Directors will have further content tailored to the Board
Committees that they will join.
Stella David, Vicky Jarman and Mark Gregory received
tailored inductions following their appointment to the Board.
These included one to one meetings with our Executive
Committee, senior management and External Auditors.
Their feedback on their induction programmes was reviewed by
the Nomination Committee to improve the effectiveness of future
Director inductions.
The Chairman has overall responsibility for ensuring that Directors
receive suitable training to enable them to carry out their duties.
Training is also provided by way of reports and presentations
prepared for each Board meeting, as well as meetings with Group
employees and external advisers. During the year the Board
received training on the Criminal Finance Act and Anti-Bribery and
Corruption legislation, developments in HSSE requirements and
GDPR and the duties of directors.
The Directors have access to independent professional advice
at the Group’s expense, as well as the advice and services of the
Company Secretary, who advises the Board on regulatory and
corporate governance matters.
The quality of debates and processes around decision making
at Board level, particularly in the context of remote meetings
necessitated by the pandemic.
The progress being made towards Entain’s strategic imperatives,
and the main challenges facing the business in executing on
its objectives.
The governance around risk management, and the Board’s
oversight of key risks facing Entain.
The Board’s oversight of opportunities and threats facing the
business, including in terms of competition, technology and data,
regulation and ESG / sustainability.
The oversight of organisational capacity and succession
planning for key leaders.
The interaction with key stakeholders, including major investors,
customers and employees, and the processes in place to
facilitate Board engagement with these groups.
The performance of the Audit, ESG, Remuneration and Nomination
Committees was also specifically addressed in the exercise, as was
the performance of the Chair and that of individual Directors.
Following the sequence of Director interviews taking place in
February / March 2022, Lintstock will prepare a report on the
findings, alongside a comparison with the Lintstock Governance
Index, which helps to place performance into context. It is
envisaged that the outcomes will be discussed at a meeting of the
Board in April 2022.
The 2020 evaluation action plan was addressed in the
following way:
Theme
How it was addressed
Focus on technology
Several deep dives were held
during the year – including
on product development,
a technology tour and a
presentation following an
external assessment of our
technology stack
Regular strategic discussions on
online entertainment, including
an overview of market trends in
interactive entertainment
Discussion on Principal Risks
which included different
aspects of Entain’s technology
programme – including
technology failure and cyber
security held as well as a review
of the Group’s IT infrastructure
Included as part of Nomination
Committee review and discussed
at the Board at its People
focused meeting
Board Evaluation and Effectiveness
Online entertainment
In 2022, Entain engaged Lintstock to facilitate an external review
of Board performance. Lintstock is an advisory firm that specialises
in Board performance reviews, and has no other connection with
the Company.
Technology risk
The first stage of the review involved Lintstock engaging with
the Chairman and Company Secretary to set the context for
the evaluation, and to tailor survey content to the specific
circumstances of Entain. All Board members were requested
to complete an online survey on the performance of the Board,
each of the Committees and the Chair. Lintstock subsequently
interviewed each of the Directors, enabling them to expand on
their responses to the survey, and to raise any further issues they
wished to discuss.
As well as addressing core aspects of Board and Committee
performance, the exercise had a particular focus on the
following areas:
The response to takeover approaches received by Entain,
including the role played by the Board and the flow of
information during this period.
Skillset for future Board
appointments
Entain plc | Annual Report 2021 Governance Report of the Audit Committee
103
Introduction
As Chair of the Audit Committee, I am pleased to present our
report for the year ended 31 December 2021, setting out how the
responsibilities delegated to the Audit Committee by the Board
were discharged over the course of the year and the key topics
we considered.
2021 has been another year of disruption for Entain. With the
Covid-19 pandemic still with us, the integrity of our financial
reporting and risk management processes continues to be of the
upmost importance in assisting the Group in its navigation of
these uncertain times. As a result, and similar to 2020, the Audit
Committee has continued to focus on risk management and
financial control throughout 2021. Whilst the Board has managed
the Group’s overall response to the risks presented by Covid-19,
the Audit Committee has maintained its oversight of the controls in
place over forecasting and performance reporting, the judgements
taken in support of financial estimates and the assessment of
viability in light of the changing landscape, all of which have been
supplemented by regular dialogue with the Chief Financial Officer
& Deputy CEO and our internal and external auditors. Whilst the
Covid-19 pandemic is not over, the Group’s performance has
remained strong and, as such, I am as confident as ever in Entain’s
long-term prospects.
As we discussed last year, the Board and its Committees have
continued to focus on the enhancement of our Enterprise Risk
Management Framework. During the course of 2021 the Board has
undertaken a detailed review of the Group’s Principal Risks, with
the Audit Committee taking responsibility for Data Breach and
Cyber Security, Technology Failure, Taxes and Trading, Liability and
Pricing Management. We intend to undertake a review process of
this nature every year.
The Audit Committee undertakes a pivotal role in providing
independent challenge and oversight across financial reporting and
controls for the Group. The Audit Committee’s newest members,
Vicky Jarman, Mark Gregory and David Satz, bring significant
financial, accounting, risk and sector experience which will further
strengthen our oversight. My thanks go to Stephen Morana for his
valuable service to the Committee, having stepped down from the
Board and Audit Committee in March 2021.
I believe the skills and experience of our members remain strong,
enabling the Audit Committee to continue to perform effectively.
Pierre Bouchut
Chair of the Audit Committee
3 March 2022
[3 March
The Audit Committee has
maintained its oversight of the
controls in place over forecasting
and performance reporting, the
judgements taken in support
of financial estimates and the
assessment of viability in light of
the changing landscape.”
Pierre Bouchut
Chair of the Audit Committee
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 104
Report of the Audit Committee continued
The role of the Audit Committee
Audit Committee membership and attendance
The Audit Committee oversees the effectiveness of the
Group’s financial reporting, systems of internal control and
risk management and the integrity of external and internal
audit processes.
Key responsibilities of the Audit Committee
Monitor the integrity of Entain plc’s financial statements and
any formal announcements relating to the Company’s financial
performance and reviews, and challenge, where necessary, the
significant financial reporting issues and judgements in relation
to the half-year and annual financial statements before these are
submitted to the Board for final approval.
Make recommendations to the Board concerning any proposed,
new or amended accounting policies.
Assess the effectiveness of the Group’s external auditor
including reviewing the annual external audit plan and
audit findings.
Recommend the audit fee to the Board and set the Group’s policy
on the provision of non-audit services by the external auditor.
Review and monitor the external auditor’s independence and
objectivity, and the effectiveness of the audit process.
Monitor and review the internal audit programme and
its effectiveness.
Monitor and review Entain’s systems of internal control, financial
reporting and risk management.
Review internal audit reports covering the various areas and
activities of the business and ensure the business responds to
the recommendations made.
Assess and report on the Group’s viability prior to being
submitted to the Board for approval.
The Audit Committee’s terms of reference can be found on the Company’s
website at www.entaingroup.com
As at 31 December 2021 the Audit Committee comprised three
members, all of whom are independent Non-Executive Directors.
Pierre Bouchut is Chair of the Committee. He has a strong financial
background, having been chief financial officer at Schneider
Electric, Carrefour and Delhaize and extensive experience as an
audit committee chair, currently serving at Pepco Group, Albioma
S.A., Geopost S.A. and Firmenich S.A. in this role. The Board is
satisfied that he is the Audit Committee member with recent and
relevant financial experience, as outlined in the UK Corporate
Governance Code, and competence in accounting and auditing
as required by the FCA’s Corporate Governance Rules in DTR7.
It considers that the Audit Committee as a whole has an
appropriate and experienced blend of commercial, financial and
audit expertise to assess the issues it is required to consider, as
well as competence in the gaming sector.
All Directors on joining the Board are given specific sector training
to ensure competence relevant to the business, in addition to the
other skills they bring to the Board and Committees. Vicky Jarman,
Mark Gregory and David Satz each received a tailored Committee
induction programme upon joining the Audit Committee during
the year.
Regular attendees at the meetings include the Chief Financial
Officer, Director of Financial Control, Chief Governance Officer,
Director of Internal Audit, the external auditor and the Chair of
the ESG Committee. During the year the Audit Committee met for
private discussions with the external auditor and the Director of
Internal Audit.
The Audit Committee had six scheduled meetings and one ad-hoc
meeting during the year.
Member
Pierre Bouchut (Chair)
Stephen Morana1
Mark Gregory2
Vicky Jarman3
David Satz4
1. Resigned from the Audit Committee on 4 March 2021.
2. Joined the Audit Committee on 17 March 2021.
3. Joined the Audit Committee on 4 March 2021.
4. Joined the Audit Committee on 17 August 2021.
Meetings
attended/
eligible to
attend
7/7
1/1
6/6
6/6
3/3
Entain plc | Annual Report 2020
Entain plc | Annual Report 2021 Governance 105
Responsibility for Entain’s financial statements: Fair, Balanced and Understandable
The Board is ultimately responsible for presenting a fair, balanced and understandable assessment of Entain’s position and
prospects, which extends to the half-year and annual financial statements and Annual Report.
Delegation
Entain’s finance department, led by
the CFO & Deputy CEO, prepares and
reviews the financial statements.
Management coordinates with the CEO,
CFO & Deputy CEO and Chairman on the
preparation of any business model and
strategy.
The Company Secretary with the Chairman
of the Board, the CGO and the Chair person
of the various Board Committees, prepares
the corporate governance statements and
all Board Committee reports.
External Review
Entain’s external auditors audit the Annual Report and financial statements and review the half-year accounts. A report to the
Audit Committee is prepared.
Committees’ Review
The Audit Committee reviews the Annual Report, draft
financial statements and accompanying statements and
meets with the external auditors to review their report.
The Audit Committee proposes amendments and makes
recommendations to the Board and also approves the Audit
Committee’s Report.
For the annual report the Remuneration Committee, Nomination
Committee and ESG Committee respectively review the
Directors’ Remuneration Report, Nomination Committee Report
and ESG Report, propose changes and make recommendations
to the Board.
Board Review
The Board reviews the Annual Report and financial statements, accompanying reports and recommendations from its
Committees and makes changes to the disclosure where appropriate.
Auditor Reporting To The Board
The External auditors prepare their final report (Annual Report) or review report (half-year results).
Audit/Board Approval And Publish
The Board and auditors approves the Annual Report, year-end financial statements and disclosures and the half-year report and
these are then released to the stock exchange and published on Entain’s website on receipt of the final audit report.
In respect of the financial statements and accompanying reports for the year ended 31 December 2021, the Company has
followed the process detailed above. In doing so the Directors confirm that they have reviewed the complete 2021 Annual Report
and consider that taken as a whole, the report is fair, balanced and understandable and provides the information necessary for
Entain’s shareholders to assess the Group’s performance, business model and strategy.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 106
Report of the Audit Committee continued
Activities
Financial statements and disclosure
The Audit Committee reviewed the full and half-year financial
statements with management before proposing them to
the Board for approval. In undertaking its review, the Audit
Committee received reports from management and the
external auditor outlining significant financial judgements
and estimates.
The Audit Committee reviewed the assessment and reporting
of longer-term viability, systems of risk management and
internal control, including the reporting and classification of
risk across the Group and the examination of what might
constitute a significant failing or weakness in the system
of internal control. It examined the Group’s modelling for
stress testing different financial and operational events and
considered whether the period covered by the Group’s viability
statement was appropriate.
With the impact of Covid-19 continuing to impact businesses,
the Audit Committee gave consideration and challenge to the
appropriateness of adopting the going concern assumption in
preparing the financial statements. The Committee agree with
the conclusions reached and the going concern statement for
the year ended 31 December 2021 is set out on page 76.
Risk
As noted in the introduction, the Audit Committee are
responsible for the oversight of Cyber Security, Technology
Failure, Taxes and Trading, Liability and Pricing Management
Principal Risks. Throughout the course of 2021, the Audit
Committee has performed detailed reviews over all these
risks seeking assurances from management that they have
suitable measures in place to monitor, manage and mitigate
the relevant risks. In addition, the Audit Committee has also
received quarterly updates on the Group’s Risk Management
programme and the progress being made with the ongoing
maturity of our Enterprise Risk Management Framework.
This approach will continue in 2022.
FRC letter on Entain Annual Report
During the year, the Group received a letter from the
Financial Reporting Council (FRC) requesting clarification
and explanation of certain points within the 2020 Annual
Report. A number of items were resolved without the need for
further explanation and the remaining FRC queries have been
covered by additional disclosures included in the 2021 Report
in order to provide greater clarity over certain items within the
financial statements.
External audit
The 2021 financial year-end is KPMG LLP’s fourth financial
reporting period as the Group’s external auditor, following the
external audit tender process in 2018, with Mark Flanagan
undertaking his first year as lead audit partner. The Audit
Committee reviews the fee structure, resourcing and terms
of engagement for the external auditor annually; it further
considers the reappointment of the external auditor each year
before making a recommendation to the Board.
Effectiveness of the external audit
The Audit Committee evaluated the effectiveness of the external
audit process during the year in consultation with the Chief
Financial Officer and senior finance team. The assessment of the
auditor’s approach to providing audit services focused on:
Safeguards against independence threats being sufficient
and comprehensive.
Quality and transparency of communications being timely, clear,
concise and relevant and that any suggestions for improvements
or changes are constructive.
The exercise of professional scepticism and the willingness of the
auditor to challenge management’s assumptions.
The quality of the audit engagement team – including the
continuity of appropriate industry, sector and technical expertise
or where there have been new areas of activity and changes in
regulation or professional standards.
The Audit Committee concluded that the external audit team had
provided the required quality in relation to the provision of audit
services. Feedback is provided to the external auditor by the Audit
Committee and through one-to-one discussions between the Audit
Committee Chair and the lead audit partner.
FRC Audit Quality Review
The Audit Committee specifically considered the findings of the
FRC’s Audit Quality Review team’s assessment of KPMG’s 2020
audit of the Group. The Audit Committee discussed these with the
auditor and separately with management, noting the observations
raised and KPMG’s proposed responses. The Audit Committee will
monitor progress of the auditor’s proposals over the forthcoming
year and consider these as part of its annual review of the
effectiveness of external audit.
Non-audit services
The Audit Committee is responsible for the Group’s policy on non-
audit services and the approval of non-audit services. The policy
states that in the Company’s financial year, the total fees for
non-audit services provided by the external auditors, excluding
non-audit fees for due diligence for acquisitions and other specific
matters noted below, should not exceed 70% of the average of the
total fees for audit services they provided in the preceding three-
year period. During the year, the policy was updated to reflect
the requirements of the FRC’s Revised Ethical Standard 2019.
The policy is kept under annual review and the Audit Committee
receives regular reports on non-audit services provided by KPMG
and other audit firms.
In the year ended 31 December 2021, the total non-audit fees as a
percentage of the audit fees paid to the external auditors was 20%.
In addition to their statutory duties, KPMG LLP is also employed
where, as a result of their position as auditors or for their specific
expertise, they either must, or the Audit Committee accepts they
are best placed to, perform the work in question. This is primarily
work in relation to matters such as shareholder circulars, Group
borrowings, regulatory filings and certain business acquisitions
and disposals. In such circumstances the Audit Committee will
separately review the specific service requirements and consider
any impact on objectivity and independence of the auditors and
any appropriate safeguards to this. As such the Audit Committee
believes it appropriate for these non-audit services to be excluded
from the 70% cap set out above. In the year ended 31 December
2021 the fees paid in respect of due diligence for acquisitions to the
external auditors was £nil.
Entain plc | Annual Report 2021 Governance 107
Internal audit and its effectiveness
Internal Audit provides assurance to the Board, through the Audit
Committee, that effective and efficient control processes are in
place to identify and manage business risks that may prevent the
business from achieving its objectives and strategy. The Audit
Committee received regular reports on Internal Audit’s findings,
including their assessment of issues raised in previous reports.
The work completed by Internal Audit during the year focused on
key areas of the Group (disclosed on pages 78 to 85 under Principal
Risks), which included:
Reviews of Anti-money Laundering and Safer Gambling
processes across various business units.
The areas which will have their control environment reviewed
in 2022 are:
Technology disaster recovery capability.
Corporate social responsibility activities including environmental
procedures and charitable giving.
New acquisitions and mergers to ensure that appropriate,
commercially effective and highly compliant business practices
are in place.
Ongoing compliance assurance over key regulations including
gambling and responsibility requirements, anti-money
laundering, marketing and GDPR.
Review of the processes for developing and implementing new
Whistleblowing policy
software capabilities to the Group’s core Trading Platform.
Operating review of processes for payroll as a major expense to
the Group in several key locations, including compliance with UK
furlough regulations.
Review of the integrity and security of the Group’s financial
systems platform, Oracle.
Operating review of the processes and technology used to
ensure compliance with licence jurisdictions.
Operating review of the new Colombian market for
regulatory compliance.
Review of the Group’s compliance with the UK Modern Slavery
Act and adequacy of provisions to mitigate risks of slavery.
The Group has a formal whistleblowing procedure by which
employees can, in confidence, raise concerns about possible
improprieties in financial or other matters. This is set out in the
Group’s Code of Conduct and is approved by the Audit Committee.
The policy sets out the type of disclosure which is protected and
also specifies to whom disclosures should be made and the process
that will be followed. The Group actively encourages individuals,
where they believe that malpractice has taken place, to make
protected disclosures either internally to the Audit Committee or
externally through an outsourced service provider.
The Audit Committee is satisfied that robust and appropriate
arrangements are in place for the proportionate and independent
investigation of such matters and for appropriate follow-up action.
Review of the accuracy and integrity of processes to report to
Committee evaluation
regulatory bodies.
Ongoing reviews of key financial controls’
operating effectiveness.
The Board, with the support of the Audit Committee, completed its
annual review of the effectiveness of the system of internal control,
including the effectiveness of internal audit and consideration
of whether it had the appropriate level of independence and
its importance in assessing the Company’s culture. The Board
concluded that it was satisfied that the system of internal control
remains robust and have selected areas on a risk basis for inclusion
in the 2022 Internal Audit Plan.
The performance of the Audit Committee was assessed as a part
of the Board Review, which this year was externally facilitated
by Lintstock. All Audit Committee members completed a tailored
survey, prior to being interviewed by Lintstock representatives, to
expand on their survey responses and to raise any further issues
they wished to discuss.
As well as addressing core aspects of Audit Committee
performance, the exercise had a particular focus on the
following areas:
The assessment of work performed by the Internal and external
auditors, the integrity of the control environment, and the quality
of financial reporting.
The oversight of Entain’s financial health, accounting treatment
and exposure to risk.
The relationship and communication with key counterparties,
including the Head of Internal Audit and the external
audit partner.
Following the interviews in February / March 2022, Lintstock will
prepare a report on the findings. It is envisaged that the outcomes
will be discussed at a meeting of the Board in April 2022.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 108
Report of the Audit Committee continued
Accounting and key areas of judgement
Throughout the course of the year, the Audit Committee determined the following areas of the financial statements were of
significant interest. These issues were discussed with management and the external auditors to ensure that the required
level of disclosure has been provided and that appropriate rigour has been applied where any judgement may be exercised.
For completeness, the Audit Committee report should be read in conjunction with the Risk Report on pages 78-85.
Matter considered
Action
Separately disclosed items
The Group separately discloses certain items in order to
allow a clearer understanding of the underlying trading
performance of the business. In 2021, the Group has
recorded a net charge in respect of items which have been
separately disclosed of £134.1m in the Income Statement.
As part of their assessment that the treatment of separately
disclosed items in the financial statements is appropriate, the
Audit Committee has considered each of the items disclosed
and challenged, where necessary, the treatment adopted by
management. The Audit Committee has also considered the
conclusions reached by KPMG as part of its audit in this area
and are satisfied with the treatment and disclosure adopted.
In addition, non-GAAP measures have been provided within
the Annual Report and Accounts to assist in the articulation
of the underlying business. Non-GAAP measures relate to
industry standard KPIs which are commonly used by the
Group’s peers and market analysts.
Management’s use of non-GAAP measures in explaining the
underlying business performance has been considered by
the Audit Committee, along with the views of KPMG on their
use and prominence. Whilst the Committee understands the
challenges associated with the use of non-GAAP measures,
they are satisfied with the balance of the disclosure provided.
IFRS 3 fair value of acquired businesses
During the year, the Group completed a number of
acquisitions as detailed in Note 32 to the financial
statements. Included within the IFRS 3 fair value exercise
undertaken are a number of judgements including the value
of acquired intangibles (£218.5m) and goodwill (£273.1m).
The Audit Committee has reviewed the judgements
made in connection with the accounting treatment, to
determine whether the assets and liabilities recognised in
the financial statements are carried at an appropriate fair
value. In assessing the valuations, the Audit Committee has
reviewed the working papers provided by management
and its advisers in relation to the fair value exercise and has
assessed the assumptions used and conclusions reached.
The Committee has also considered the conclusions reached
by KPMG on their work in this area and has concluded that
the treatment within the financial statements is appropriate.
Uncertain tax positions
Following a ruling by the Athens Administrative Court of
Appeal in favour of the Group on the 2010/11 Greek Tax
Assessment, the Group has recorded a receivable for the
full amount due under the ruling plus interest. This has
resulted in the Group recognising a receivable of €227.5m
and an associated credit in the Income Statement of €82.5m
(for amounts previously recognised as a charge).
In assessing the treatment adopted, the Audit Committee
has assessed the basis for the judgement taken, advice
received by the Group’s external legal advisors and the
analysis provided by KPMG. Whilst the final outcome remains
uncertain as the Greeks Authorities have appealed the
ruling to the Greek Supreme Administrative Court, the Audit
Committee is satisfied that the appropriate judgement and
disclosure has been provided in the Annual Report.
Contingent consideration
Included within the Group Balance Sheet as at 31 December
2021 is contingent consideration of £70.8m, which has been
calculated based on potential future profitability and the
likely cost of settlement.
The Committee has reviewed the process and judgements
taken by management in determining the likely pay-
out under the contingent consideration agreements as
well as the findings of the KPMG audit and are satisfied
that the liabilities recognised are appropriate given
the circumstances.
Entain plc | Annual Report 2021 Governance 109
Report of the Environmental, Social
and Governance (“ESG”) Committee
Introduction
Following the decision in 2020 to rename the Committee in
recognition of the expanded scope and breadth of our remit, the
ESG Committee has had an active period of work during 2021.
We increased our meeting schedule from four to six meetings per
annum to ensure that our agendas enabled us to cover the Group’s
ESG activities and how these underpin the Group’s strategy.
New for 2021 was the ESG Committee’s monitoring of those
Principal Risks allocated to it by the Board for review. The ESG
Committee held deep dive risk reviews on health, safety and
wellbeing of customers and employees and the loss of key
locations. In its reviews, the ESG Committee considered the nature
and component of the Principal Risks, their proposed mitigations
and risk management programmes.
The Group’s environmental programme received particular focus
during the year, with the ESG Committee reviewing the Company’s
commitment to be carbon net zero by 2035 and preparations to
meet the Task Force on Climate-Related Financial Disclosures
(TCFD) recommendations. The ESG Committee will continue its
focus on TCFD during 2022.
In November I was delighted to participate in Entain’s first
sustainability event – Entain:Sustain which demonstrated the
Group’s progress in key areas such as safer gambling, diversity
and inclusion and environmental initiatives. I was pleased at
the attendance at the event and the strength of the questions
and discussion held, enabling important issues to be debated
and explained.
During the year we were joined by Stella David, our Senior
Independent Director. Stella has brought deep insight from her
executive career in consumer markets and non-executive roles.
She has been a welcome addition to the ESG Committee.
Virginia McDowell
Chair of the ESG Committee
3 March 2022
We increased our meeting
schedule to ensure that our
agendas enabled us to cover
the Group’s ESG activities
and how these underpin the
Group’s strategy.”
Virginia McDowell
Chair of the ESG Committee
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 110
Report of the ESG Committee continued
The role of the ESG Committee
Activities
Safer betting and gaming
The ESG Committee received regular updates on the Group’s safer
betting and gaming programme, including the ARC™ programme
and the Company’s research programme with Harvard Medical
School focusing on patterns of internet betting and gaming
behaviour and assessing the impact of Entain’s safer betting and
gaming tools.
The ESG Committee undertook a half-year and full-year review of
the delivery of safer betting and gaming project metrics as part
of the new safer betting and gaming element of the Group-wide
annual bonus structure which has a 15% weighting. This review
included an external assessment by EPIC Risk Management on
the Company’s performance against targets. At its year-end
assessment the ESG Committee determined it was satisfied
that these metrics had been fully met and made a positive
recommendation to the Remuneration Committee as part of
its assessment.
Further information on the development of the safer betting
and gaming remuneration metric is outlined on page 126 of the
Directors’ Remuneration Report.
Gaming licence compliance
The ESG Committee considered key elements of the Group’s
gaming licence compliance programme, including sports betting
integrity and the work of the Gambling Ombudsman Director.
Compliance governance
The ESG Committee received quarterly reports on international,
UK, retail and digital compliance developments and monitoring
of the Group’s compliance management. It further reviewed the
update of the Group Compliance Committee’s terms of reference
and refreshed structure.
Code of Conduct
The ESG Committee reviewed and approved the Group’s
updated Code of Conduct and its associated roll-out and training
programme. Deep dives on the Group’s anti-money laundering and
anti-bribery and corruption programmes were held during the year.
The Committee provides oversight of the Company’s
Environmental, Social and Governance (ESG) programme,
overseeing the effective management of the Company’s
ongoing relationship and engagement with a wide spectrum
of stakeholders. It monitors progress against internal key
performance indicators and external ESG index results.
Key responsibilities of the ESG Committee
Review the framework of ESG policies and controls for managing
the Group’s relationships with stakeholders.
Ensure that sufficient focus and resource is given to
implementing, monitoring and managing the Group’s ESG
policies and processes and that these remain effective.
Consider the appointment of third parties to advise on ESG
policies and practices and/or audit the Group’s ESG policies.
Liaise and work with the Board’s other Committees to ensure the
Board’s duties and responsibilities are carried out effectively.
Prepare an ESG report for inclusion in the Annual Report and
Accounts and oversee that any public disclosures on ESG
issues made by the Group accurately reflect the Group’s policies
and processes.
The ESG Committee’s terms of reference were reviewed and updated
and approved by the Board during the year. These can be found on the
Company’s website at www.entaingroup.com
ESG Committee membership and attendance
During the year, the ESG Committee had four members.
Jette Nygaard-Andersen stepped down from the Committee
on 21 January 2021 upon becoming an Executive Director.
Stella David joined the Committee on 4 March 2021 upon her
appointment to the Board.
Regular attendees at the meetings include the Chief Governance
Officer, Director of Internal Audit, Group General Counsel and
Chief People Officer. Other management including the heads of
the compliance teams, Director of Corporate Affairs, Director
of Regulatory Operations and the HSSE Director attended
periodically throughout the year.
The Committee had six meetings during the year.
Member
Virginia McDowell (Chair)
Stella David1
Peter Isola
David Satz
1. Joined the Committee on 4 March 2021.
Meetings
attended/
eligible to
attend
6/6
5/5
6/6
6/6
Entain plc | Annual Report 2021 Governance 111
Privacy and data protection
Regular updates on data privacy and protection were given
to the ESG Committee, including issues arising from requests
to share safer betting and gaming data with regulators
and legal and regulatory developments across the Group’s
different jurisdictions.
The ESG Committee held its annual review of the Group Data
Retention Policy and Group Data Protection Policy. It further
considered the Group’s Artificial Intelligence Charter.
Health, Safety, Security and the Environment (“HSSE”)
The ESG Committee discussed the Group’s environmental
strategy and our commitment to being carbon net zero by 2035.
HSSE performance was monitored by the ESG Committee
through regular updates on the Group’s HSSE performance
indicators and initiatives. The ESG Committee reviewed and
approved the proposed HSSE strategy for 2022 as well as
agreeing the Group’s HSSE KPIs for the forthcoming year.
The ESG Committee undertook deep dive reviews on two
Principal Risks allocate to it for monitoring: Health, safety
and the wellbeing of customers and employees and loss of
key locations.
Diversity and inclusion
The ESG Committee received quarterly reports on the Group’s
diversity and inclusion performance, with deeper briefings on
initiatives within the Company, including Employee Forums,
technology access and apprenticeship programmes.
Other reviews
The ESG Committee oversaw the annual ESG report,
reviewing the prepared text and giving feedback to
management on its content.
ESG Committee evaluation
The performance of the ESG Committee was assessed as
a part of the Board Review, which this year was externally
facilitated by Lintstock. All ESG Committee members
completed a tailored survey, prior to being interviewed by
Lintstock representatives, to expand on their survey responses
and to raise any further issues they wished to discuss.
As well as addressing core aspects of ESG Committee
performance, the exercise had a particular focus on the
following areas:
The top priorities for Entain from an ESG perspective over
the coming year, and the coverage of key issues at ESG
Committee meetings.
The policies and controls in key areas, including responsible
gambling, anti-money laundering, anti-bribery and
corruption, privacy and data protection, and diversity
and inclusion.
The adherence to policies and controls, and Entain’s
engagement with key stakeholders in relation to ESG matters.
Modern Slavery Act Statement review
and internal Working Group
The 2021 Modern Slavery and Human Trafficking
Transparency Statement was written and published in
accordance with Section 54(1) of the Modern Slavery Act
2015. The statement sets out the measures taken between 1st
January 2020 – 31st December 2020.
At the end of 2020, our Modern Slavery Working Group,
which includes colleagues from Group Procurement, Human
Resources, Internal Audit and Company Secretariat, was
formed. The Working Group is responsible for producing the
annual Modern Slavery Statement and aims to better the
visibility of human rights issues, impacts and risks, and identify
ways to eradicate adverse effects on human rights within the
Entain plc group and extended supply chains.
In 2021, the Working Group partnered with Unseen, one of the
UK’s leading anti-slavery charities working towards ending
modern slavery by empowering survivors, providing advice,
and influencing society. Unseen assisted with reviewing
our policies and procedures, provided a comprehensive gap
analysis of our current and future supply chain, and evaluated
different areas of our operations such as HR, supply chains
(including supply chain transparency) and procurement.
In September 2021, we introduced mandatory training on
the Modern Slavery Act 2015 to all colleagues across our
business, and we will provide tailored training to specific
functions within the Company, such as Procurement, Internal
Audit and recruitment. The training aims to enhance our
knowledge and understanding of the issues surrounding
modern slavery and will help us identify and prevent modern
slavery in our workplace and supply chains. The training will
be refreshed annually.
Following the interviews in February / March 2022, Lintstock
will prepare a report on the findings. It is envisaged that
the outcomes will be discussed at a meeting of the Board in
April 2022.
The Modern Slavery Statement was reviewed and approved
by the Board of Entain plc and can be viewed on our Company
website at www.entaingroup.com/sustainability/modern-
slavery-statement
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 112
Nomination Committee Report
Introduction
I am pleased to introduce the Nomination Committee report for
the year.
During the early part of last year, the Nomination Committee
focused on key Board appointments, a number of which I
discussed in last year’s report. These included the appointment
of Jette Nygaard-Andersen as Chief Executive, Stella David
as Senior Independent Director and Vicky Jarman as a Non-
Executive Director.
In March, we appointed Mark Gregory as a Non-Executive Director
and Chair of the Remuneration Committee. Mark brings financial
and retail knowledge from his executive career as well as a deep
understanding of UK corporate governance practice and investor
sentiment. An experienced remuneration committee chair, he has
proven to be a valuable addition to the Board.
Stella, Vicky and Mark completed their induction programmes
during 2021 and the Nomination Committee sought their feedback
on the process in order to further build on the effectiveness of the
programme for future new joiners.
In our last report we announced that Sandeep Tiku, our Group
Chief Operating Officer would be joining the Board during 2021
subject to his relocation to Gibraltar. Sandeep’s relocation was
delayed by the pandemic and he has notified the Company that he
no longer wishes to relocate and will therefore not be appointed to
the Board. The Board will not meet shareholder expectations for
an ethnically diverse composition and the Committee is currently
undertaking an active search to appoint a Director from an ethnic
minority background.
The Nomination Committee also continued to monitor the
composition and skills of the Board, succession planning for
Non-Executive Directors and diversity. As outlined last year, we
moved the regular succession planning for Executive Directors
to the newly established Chairman’s Committee in order that all
Non-Executive Directors can engage and input into this process.
This worked well during 2021 and it is intended to continue this
practice in 2022.
J M Barry Gibson
Chair of the Nomination Committee
3 March 2022
The Nomination Committee
also continued to monitor
the composition and skills
of the Board, succession
planning for Non-Executive
Directors and diversity.”
J M Barry Gibson
Chair of the Nomination Committee
Entain plc | Annual Report 2021 Governance 113
The role of the Nomination Committee
Nomination Committee membership and attendance
The Nomination Committee’s membership consists of
the Senior Independent Director and the chairs of each
of the Board Committees.
The Nomination Committee had three meetings during the year.
Member
Barry Gibson (Chair)
Pierre Bouchut
Stella David1
Mark Gregory2
Virginia McDowell
Stephen Morana3
1. Joined the Nomination Committee on 4 March 2021.
2. Joined the Nomination Committee on 17 March 2021.
3. Resigned from the Nomination Committee on 4 March 2021.
Meetings
attended/
eligible to
attend
3/3
3/3
1/1
1/1
3/3
2/2
The Nomination Committee actively reviews the composition
and diversity of the Board and senior management and leads
its succession process. It monitors the independence and time
commitment of the Group’s Non-Executive Directors and ensures
that a rigorous evaluation of the Board’s effectiveness and
performance is undertaken at least annually.
Key responsibilities of the Nomination Committee
Ensuring that there is a formal, rigorous and transparent
procedure for appointments to the Board.
Leading the process for appointments and make
recommendations to the Board.
Assisting the Board in ensuring its composition is regularly
reviewed and refreshed, taking into account the length of service
of the Board as a whole, so that it is effective and able to operate
in the best interests of shareholders.
Ensuring plans are in place for orderly succession to positions
on the Board, the Executive Committee and where appropriate,
senior management, including the Company Secretary.
Overseeing the development of a diverse pipeline for succession.
Working and liaising with other Board Committees,
as appropriate, including the Remuneration Committee in
respect of any remuneration package to be offered to any new
appointee of the Board.
The Nomination Committee’s terms of reference were reviewed and
updated and approved by the Board during the year. These can be found on
the Company’s website at www.entaingroup.com
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 114
Nomination Committee Report continued
Activities
Board appointments
As outlined in last year’s report, in early 2021 the Nomination
Committee led the process for the appointment of the new CEO
Jette Nygaard-Andersen, the Senior Independent Director Stella
David and Vicky Jarman as a Non-Executive Director. For these
searches we engaged external search consultant Russell Reynolds.
In addition, the Committee engaged Russell Reynolds for the
search for a new Remuneration Committee Chair. A short list
of candidates was put forward by Russell Reynolds and these
candidates met members of the Committee, the Chief Executive
and Chief Governance Officer. The Committee concluded that
Mark Gregory would be an excellent addition to the Board and an
experienced remuneration committee chair, with valuable financial
and customer service insight, and therefore recommended Mark’s
appointment to the Board. Mark Gregory was appointed to the
Board in March 2021.
Russell Reynolds Associates have no other connection with
the Group or individual Directors and are accredited under the
enhanced voluntary code of conduct for executive search firms.
External search consultants
Following the intensive period of Director searches in early 2021,
the Nomination Committee reflected on the search process and
agreed to implement a policy whereby there would be a rotation of
external search consultants used for each new potential Director
appointment going forward.
Board composition and Board Committees
To assist in succession planning for Non-Executive Director
appointments and Committee membership, the Nomination
Committee considered the skills, experience and tenure of current
Non-Executive Directors and reflected on how this skillset enabled
the Board to execute the Group’s strategy, fulfil the tasks and
activities of its Committees and meet future challenges.
The Nomination Committee assessed the new Non-Executive
Director appointments in 2021 and recommended that Stella David
join the Remuneration, ESG and Nomination Committees, Vicky
Jarman join the Audit and Remuneration Committees and Mark
Gregory join the Audit and Nomination Committees (as well as
chairing the Remuneration Committee).
During the year the Nomination Committee considered
membership of each Board Committee in light of Board changes
and focused on succession planning for the chairs and membership
of each Committee as this had been an action arising from
the 2020 Board and Committee evaluation. The Nomination
Committee agreed an immediate successor for each Committee
chair from the current Non-Executive Directors and discussed
longer term succession planning. In addition, it was recommended
that David Satz join the Audit Committee in light of his deep
knowledge of the betting and gaming industry. David joined the
Audit Committee in August 2021.
Independence
The Nomination Committee considered the independence of each
Non-Executive Director as part of its recommendation to the
Board for Director re-election. In making this recommendation, the
Nomination Committee also considered the time commitment and
performance evaluation of each Director standing for appointment.
Diversity
The Nomination Committee continued to appraise appointments
to the Board from the perspective of its commitment to diversity,
particularly with respect to gender and ethnicity, in its composition
and succession plans. With the appointment of Stella David and
Vicky Jarman in March 2021, the proportion of women on the
Board at 31 December 2021 increased to 36%. During the year the
Board reviewed the gender balance amongst the Group’s senior
management and further information can be found on page 58 of
the Strategic Report.
In January 2021 we announced that Sandeep Tiku, our Chief
Operating Officer, would be joining the Board as an Executive
Director, with Sandeep relocating from India to Gibraltar. In 2021
this appointment was delayed due to Sandeep’s ill health during
the pandemic. Sandeep has now notified the Group that he no
longer intends to relocate to Gibraltar and he will therefore not be
appointed to the Board. The Board recognises the value of having
a diverse membership and is mindful that, following Sandeep’s
decision not to relocate, it will not meet shareholder expectations
on the number of Directors from an ethnic minority background.
Consequently, as part of its ongoing review of Board composition
and diversity, the Nomination Committee is taking active steps to
appoint a Director from an ethnic minority background.
The Nomination Committee reviewed and recommended the
Board Diversity Policy which was subsequently approved by
the Board. This can be found on the Company’s website at
www.entaingroup.com
Committee evaluation
The performance of the Nomination Committee was assessed
as a part of the Board Review, which this year was externally
facilitated by Lintstock. All Nomination Committee members
completed a tailored survey, prior to being interviewed by Lintstock
representatives, to expand on their survey responses and to raise
any further issues they wished to discuss.
As well as addressing core aspects of Nomination Committee
performance, the exercise had a particular focus on the
following areas:
The review of succession plans for key Board and management
positions, including the identification of talent within
the business.
The promotion of a diverse pipeline of talent within the
organisation, and the level of attention devoted to diversity and
inclusion in talent management.
The level of exposure that the Board members gain to developing
talent within the organisation.
Following the interviews in February/March 2022, Lintstock will
prepare a report on the findings. It is envisaged that the outcomes
will be discussed at a meeting of the Board in April 2022.
The Nomination Committee was satisfied that a main action
from the 2020 Board and Committee evaluation to ensure that
succession planning remained a key area of focus had been met
during the year through detailed discussion at the Board (on senior
executive management), the Chairman’s Committee (on Executive
Directors), the Nomination Committee (for Non-Executive Directors
and the Committees) and at the Audit Committee (for the finance
leadership of the Group).
Entain plc | Annual Report 2021 Governance Directors’ Remuneration Report
115
Directors’
Remuneration
Report
Directors’ Remuneration Report
Annual Statement from the
Remuneration Committee Chair
The Remuneration Committee
Executive remuneration at Entain
Remuneration in context
Annual Report on Remuneration
Page 116
Page 120
Page 122
Page 128
Page 134
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 116
Directors’ Remuneration Report continued
2021 Group performance
2021 has seen Entain continue to deliver strong financial
and operational performance, demonstrating sustainable,
consistent and diversified growth, driven by our online
expansion and resilient retail recovery. We are proud of our
achievements as we continue to lead the industry in the vital
area of player protection.
Key 2021 performance highlights include:
Online NGR up 13% at constant currency.
Nine consecutive years of double-digit online NGR growth.
Group underlying EBITDA1 up 5% at £881.7m.
Double digit growth in all key markets excluding Germany
and the Netherlands.
Continued geographic expansion into new markets with
the completion of the acquisitions of Bet.pt in Portugal and
Enlabs AB in the Baltics.
Acquisition of Unikrn to drive access to the esports skill
based wagering market.
Our joint venture in the US, BetMGM, now live in 21 states
with market share in the fourth quarter of 23% where
it operates.
The continued advancement of our Sustainability
Charter and Advanced Responsibility & Care™ (“ARC™”)
programme, reinforcing the Group’s commitment to
delivering industry best-in-class Environmental, Social and
Governance (“ESG”) practices.
The launch of our commitment to net zero carbon emissions
by 2035 and our EnTrain initiative to benefit the lives of one
million people through access to technology.
1. Continuing operations stated pre-separately disclosed items.
Entain plc | Annual Report 2021
Annual Statement from the
Remuneration Committee Chair
On behalf of the Board, I am pleased to present my first Directors’
Remuneration Report (the “Report”) as Chair of Entain’s
Remuneration Committee (the “Committee”) for the year ended
31 December 2021. I am pleased to have been able to welcome
Stella David and Vicky Jarman as new members of the Committee
in March 2021 and would like to thank Stephen Morana for his
contribution during his tenure on the Committee.
Following shareholder approval of our Remuneration Policy at our
AGM on 24 June 2020, this year we will be asking shareholders
to vote on our Annual Report on Remuneration at our 2022 AGM.
The Report summarises remuneration outcomes for 2021 and
explains how we intend to apply the Remuneration Policy for
2022. The Policy is set out in our 2019 Directors’ Remuneration
Report and can be found on the Company’s website at
www.entaingroup.com.
I would like to thank all of our colleagues, across the globe, who
have contributed to the Company’s success in 2021 despite the
ongoing impact of Covid-19 which again saw our colleagues
impacted both at work and personally. The resilience and passion
shown by our colleagues during this prolonged period is testament
to the strength of talent we have at Entain and their drive to deliver
the Company’s goals.
In December I was delighted to have the opportunity to participate
in Entain’s Global Conference, which enabled Virginia McDowell
and myself to speak with colleague representatives from a variety
of countries and job roles on a wide range of topics, including
remuneration. More information can be found on pages 98
and 130.
2021 saw the appointment of Jette Nygaard-Andersen as our CEO
who, together with her management team, had a successful year
in developing and implementing our strategy alongside managing
the approaches for the Group by MGM Resorts International and
DraftKings. Under Jette’s leadership we enter 2022 in a strong
position and continue to make progress on our ambition to be the
global leader in betting, gaming and interactive entertainment,
which is confirmed when I reflect on the 2021 Group performance
highlights summarised to the left. All these achievements put
us in a great position as we look forward to executing on our
strategy, growing our footprint and customer base and delivering
an even better experience for our customers each and every day.
More detail is set out in the Chief Executive’s Review on page 10.
2021 was another successful year
for Entain. I am pleased that our
remuneration framework is highly
aligned to reward our executives for
delivering this level of performance
and we have also been able to reflect
this in the strengthening of our reward
proposition for all Entain colleagues.”
Mark Gregory
Chair of the Remuneration Committee
Entain plc | Annual Report 2021 Governance 117
Remuneration in 2021
I wanted to take this opportunity to outline actions taken by the
Committee during the course of the year and to set these in the
context of the wider workforce.
Salaries
A number of Executive Director changes were announced in 2021,
and full details of associated remuneration were set out in the 2020
Directors’ Remuneration Report along with the salary increase
awarded to our CFO, Rob Wood, upon taking on additional
responsibility as Deputy CEO. In parallel, given the continued
uncertainty relating to Covid-19 it was agreed that no general
salary increases would be implemented at the typical annual
review date of 1 January 2021. However, the Group continued to
ensure, throughout this period, that the salaries of those colleagues
placed on furlough were topped up to 100%. Later in the year, the
Committee was pleased that, given the strength of the Group’s
performance, the decision was made to bring forward the 2022
annual salary review, for the general employee population
(excluding Executive Directors and Executive Committee members),
to 1 October 2021. This enabled eligible colleagues to receive an
increase three months before the typical 1 January review date.
2021 incentive outturns
2021 annual bonus outturn
Whilst the overall structure of the annual bonus remained
unchanged, 2021 saw the introduction of a new non-financial
metric, safer betting and gaming, representing 15% of the overall
maximum bonus opportunity. Entain is fully aligned with the
UK Gambling Commission’s principal objectives to ensure that
children and vulnerable people are protected. Our approach to
safer betting and gaming aims to maintain best practice standards
across our business wherever we operate and to reinforce this
commitment we incorporated an associated metric into our annual
bonus, alongside the financial metrics (underlying Group operating
profit1 and growth in online net gaming revenue (“NGR”)).
Having thoroughly reviewed the performance for each metric,
and noting that furlough monies received during 2021 are being
repaid, the Committee approved a bonus outturn for the Executive
Directors of 100% of maximum opportunity.
In assessing the underlying Group operating profit outcome,
the Committee considered several items, which impacted both
positively and negatively during 2021. In reaching their conclusion,
as would be expected, the Committee have excluded the benefit of
furlough payments received during 2021. We have also excluded
the net benefit of acquisitions, and the impact of the temporary
withdrawal from the Netherlands market in the fourth quarter of
2021. At the time the 2021 targets were set, these items were
unforeseen and therefore not reflected in them.
When reviewing online NGR performance, the Committee
considered whether maximum pay-out was appropriate.
Whilst mindful of the impact on this metric of the Covid-19
pandemic and its effect on customer behaviour, the Committee
was satisfied that the outperformance achieved was not solely a
temporary effect. The Committee concluded that the achievement
represented “real” growth and the maximum target would
have been exceeded without the positive impact of Covid-19
related restrictions.
When considering the outcome of the safer betting and gaming
metric, the Committee was pleased to read the independent
assessment prepared by EPIC Risk Management, the leading
gambling harm minimisation consultancy, and accepted the
recommendation provided on the outturn by the ESG Committee.
The Committee is pleased that the commitment and hard work
of all eligible colleagues can be recognised and believes that
the outturn of 100% of maximum opportunity for the Executive
Directors represents a commensurate level of reward for 2021.
More detail on the bonus outturn is given on page 122.
2019 LTIP outturn
Our performance in 2021 continued the strong trajectory which we
have shown over the last few years. Robust EPS growth over the
period 2019–21, coupled with significant TSR out-performance of
the FTSE 51-150 comparator group, led to the vesting of the 2019
LTIP award at 100% of maximum.
In considering the outcome of the EPS element of the 2019 LTIP,
the Committee noted that the reported result for EPS over the
three-year performance period exceeded the upper end of the
target range. In assessing the final outcome, the Committee further
reviewed several items that impacted EPS, both positive and
negative, during the performance period. The benefit of furlough
payments received during 2020 and 2021 have been excluded,
as has the impact of the introduction of IFRS 16, the net benefit of
acquisitions, the exit from our businesses in Switzerland and the
Netherlands and the impact of regulatory changes in Germany.
None of these items were reflected in the original EPS targets.
The resulting EPS outcome continues to exceed the upper end of
the target range.
The Committee recognises the need to ensure this pay-out can
be justified based on the wider experience of our shareholders,
colleagues, and other stakeholders. In doing so, the Committee
considered Entain’s share price performance over the period –
up 150% – our financial and operational performance, and the
excellent progress that we have made on our sustainability and
safer betting and gaming agenda. More detail on the LTIP outturn
is given on page 122.
1. Excluding the benefit of furlough payments received, acquisitions and the results
of BetMGM.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 118
Directors’ Remuneration Report continued
Conclusion
Taking all of the above into account, and considering the Group’s
subsequent decision to repay furlough monies received in 2021,
the Committee believes that the outcomes of the annual bonus
and LTIP were fair and appropriate, reflecting underlying business
performance and being aligned with the experience of our
shareholders and other stakeholders over the one-year and three-
year respective performance periods.
2021 LTIP awards
The 2021 LTIP awards were granted on 24 March 2021.
Following changes made to the performance metrics in 2020, the
Committee was comfortable that they remained appropriate for
the 2021 awards, with only a minor change to the bespoke TSR
comparator group. Due to corporate activity, The Stars Group
and William Hill were removed from the group and Caesars
Entertainment was added. The metrics were:
One-third Cumulative EPS
One-third Relative Total Shareholder Return vs. the FTSE 100
One-third Relative Total Shareholder Return vs. a bespoke group
of sectoral peers
The Committee will assess the value of the 2021 LTIP awards at
vesting and will ensure that the final outturn reflects all relevant
factors, including consideration of underlying performance.
The terms of the awards provide the Committee with the ability
to review the outcome at vesting and to make appropriate
adjustments if it concludes that participants have benefited
from “windfall gains” as well as reviewing any malus and
clawback considerations.
Looking ahead to 2022
Directors’ salaries
The Committee reviewed the Executive Directors’ salaries in
December 2021 and approved a salary for our CEO of £820,000
from 1 January 2022 (an increase of 9.3%). This was agreed by
the Committee, after extensive discussion, and reflects the global
landscape for key senior talent in which we operate and cements
our wish to retain Jette at Entain. The competitive nature of this
market was illustrated in 2021 with the departure of Shay Segev.
Under Jette’s direction, Entain’s strategy has significantly evolved
to provide a clear roadmap for a sustainable future business and
she has presided over an excellent year of growth and performance
whilst establishing herself as an outstanding and highly regarded
industry leader. The Committee was comfortable that this level
of increase was appropriate to acknowledge Jette’s significant
contribution and noted the increase moves her salary broadly in
line with that of Kenneth Alexander, prior to his retirement as CEO.
Jette’s existing incentive levels remain unchanged.
The Chief Financial Officer & Deputy CEO and Chief Governance
Officer received increases of 2.5%, taking their base salaries to
£538,125 and £410,000 respectively, with effect from 1 January
2022. These increases are in line with the salary review budget
available for the wider workforce in the UK and Gibraltar
where these Directors are based. Their existing incentive levels
remain unchanged.
Annual bonus – new performance metric
The overall structure of the annual bonus remains fit for purpose
and therefore we are not proposing any major changes for 2022.
However, I am pleased to say that we have introduced a new non-
financial metric to reflect the importance of placing customers at
the heart of everything we do. This customer metric will represent
5% of the overall bonus opportunity in 2022 and we will use
Net Promoter Score (“NPS”) to determine its outcome. NPS is
a widely used customer loyalty and satisfaction measure that
allows companies to track promoters and detractors, producing
a clear measure of an organisation’s performance through its
customers’ eyes.
We are enhancing the safer betting and gaming metric, first
introduced in 2021. This metric will continue to represent 15%
of the overall bonus opportunity. In determining the outcome of
this metric, the Committee will again receive input from our ESG
Committee, who will have overall oversight of our safer betting and
gaming agenda and will assess the Group’s performance against
this metric.
Entain plc | Annual Report 2021 Governance This means that the performance metrics now reflect an 80%
financial / 20% non-financial weighting. Further information on the
new customer metric and the evolution of the safer betting and
gaming metric is provided on page 126.
In terms of the financial measures, we are retaining underlying
Group operating profit as a metric in the same proportion to
2021 (60%). The remaining 20% of the bonus will be determined
by a growth in online NGR metric. NGR remains one of our key
performance indicators and growing this metric, in particular
in relation to our online business, is fundamental to driving
shareholder value. The target range for both financial measures
has been set with reference to internal and external forecasts,
excluding our US joint venture.
Long-Term Incentive Plan
In determining the LTIP performance metrics for the 2022
award, the Committee has considered the difficulty in setting
appropriately stretching but incentivising EPS targets, given the
fast-changing external environment in which we currently operate.
The Committee have concluded that this can be addressed by
basing our 2022 LTIP award entirely on relative TSR metrics.
This aligns management’s interests closely with the experience
of investors and incentivises actions which enhance long-term
value creation.
Awards are expected to be made in the first quarter of 2022 and
details of the specific targets are set out on page 127.
119
Board Changes
As reported in detail in last year’s Directors’ Remuneration Report,
Jette Nygaard-Andersen was appointed as our CEO on 21 January
2021, succeeding Shay Segev who stepped down from the Board
on the same date. Robert Hoskin was also appointed to the Board
on 1 January 2021 in the role of Chief Governance Officer.
Shareholder engagement
We remain committed to maintaining an open and transparent
dialogue with our shareholders and we engaged with a number
of our significant shareholders in the first half of 2021, holding
exploratory conversations regarding potential developments to our
Remuneration Policy. I would like to thank all contributors for their
constructive input and for the support we received at our 2021
AGM, with 98.6% of votes cast in favour for our Annual Report on
Remuneration. Ongoing dialogue with shareholders on executive
remuneration is greatly valued, with feedback discussed by the
Committee and used to inform future decision making. This will be
especially relevant when we review the Remuneration Policy in
2022, ahead of the next vote on it at the 2023 AGM.
Conclusion
Entain responded strongly to the ongoing challenging external
circumstances in 2021 and continued to perform strongly,
delivering robust and sustainable performance. The Committee’s
decision-making process puts our principles of fairness and
transparency at the centre of our discussions, whilst supporting the
Group’s ambitious growth strategy and reflecting best practice in
UK remuneration and governance standards. I hope that you find
the report clear and informative and look forward to your support
at the forthcoming AGM.
Mark Gregory
Chair of the Remuneration Committee
3 March 2022
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 120
Directors’ Remuneration Report continued
Key areas of Remuneration Committee focus in 2021
A summary of the matters considered during the year is set
out below.
Our workforce
Remuneration discussion with Employee
Forum representatives
Receiving updates on all-colleague remuneration
arrangements throughout the Group
Review and approval of the 2020 UK Gender Pay
Gap Report
Approval of the launch of the 2021 ShareSave
Executive and senior management remuneration
Approval of the appointment terms for Jette Nygaard-
Andersen as CEO
Determination of the pay-outs from the 2020 annual bonus
plan and the 2018 LTIP award
Approval of the 2021 annual bonus plan and 2021
LTIP award and their associated performance metrics
and targets
Review of salaries and remuneration packages for senior
executives and fees for the Chairman
Review of performance metrics for the 2022 annual bonus
plan and 2022 LTIP
Committee governance
Approval of the 2020 Directors’ Remuneration Report
Receiving updates on external market developments in
remuneration and governance, including international
compensation practices
Evaluation of the Remuneration Committee, its advisers and
the Committee’s Terms of Reference
Review of shareholder feedback received in relation to
Directors’ remuneration following the 2021 AGM
The Remuneration Committee
Role of the Committee
The Committee assists the Board in fulfilling its responsibility
to shareholders to ensure that the Remuneration Policy
and practices for Executive Directors and senior executive
management rewards fairly and responsibly to support the
strategy and promote the long-term success of the Group.
It further oversees the Group’s overall remuneration strategy
and ensures it is aligned to the purpose and values and is clearly
linked to the successful delivery of Entain’s long-term strategy.
Committee membership and attendance
Number of
meetings
attended
Number of
meetings
eligible to
attend
7
7
7
8
1
7
7
7
8
1
Member
Mark Gregory (Chair)1
Stella David2
Vicky Jarman2
Virginia McDowell
Stephen Morana3
1. Joined the Committee on 17 March 2021.
2. Joined the Committee on 4 March 2021.
3. Resigned from the Committee on 4 March 2021.
During the year, there were six scheduled Committee meetings and
two ad-hoc meetings. There will be seven scheduled meetings in
2022, with ad-hoc meetings as required.
None of the Committee members or attendees is involved in any
Committee decisions from which they may financially benefit
personally (other than as shareholders) in the decisions made
by the Committee. The Chairman, Chief Executive Officer, Chief
Financial Officer & Deputy CEO, Chief People Officer and the
Director of Reward may attend meetings at the invitation of the
Committee but are not present when their own remuneration is
being discussed. The Company Secretary acts as the secretary to
the Committee.
Key responsibilities
Recommending to the Board the Remuneration Policy for
Executive Directors and senior management.
Setting the remuneration packages for each Executive Director
and other members of the Executive Committee.
Setting the remuneration package for the Chairman of the Board.
Overseeing the Remuneration Policy for all colleagues.
The Committee’s terms of reference can be found on the
Company’s website at www.entaingroup.com.
Entain plc | Annual Report 2021 Governance 121
Remuneration Committee evaluation
The performance of the Remuneration Committee was assessed as a part of the Board Review, which this year was externally facilitated
by Lintstock. All Committee members completed a tailored survey, prior to being interviewed by Lintstock representatives, to expand on
their survey responses and to raise any further issues they wished to discuss.
As well as addressing core aspects of Committee performance, the exercise had a particular focus on the following areas:
The alignment of Remuneration Policy with the expectations of shareholders, and with Entain’s strategic objectives, including the
financial and non-financial measures used to determine variable pay.
The quality of debates on Remuneration Policy, including the engagement with management on this topic.
The level of focus on wider workforce pay policy.
Following the interviews in February / March 2022, Lintstock will prepare a report on the findings. It is envisaged that the outcomes will
be discussed at a meeting of the Board in April 2022.
Advice to the Committee
Advisers are appointed independently by the Remuneration Committee, which reviews its selection periodically and is satisfied that the
advice it receives is independent, objective and free from conflicts of interest. The total fees paid to the Committee’s adviser, Deloitte, in
respect of 2021 were £141,500 (2020: £99,125). These were charged on a time and materials basis. Deloitte’s advice included provision
of market data, advice on the remuneration aspects of Board appointments and general guidance on market and best practice.
Deloitte LLP also provided a range of tax and advisory services to Entain during the year, support in certain technology areas and support
for the Group’s internal audit function.
Deloitte is a founding member of the Remuneration Consultants Group and as such, voluntarily operates under the code of conduct in
relation to executive remuneration consulting in the UK. Further details can be found at www.remunerationconsultantsgroup.com.
Management’s advice to the Committee was also supported by the provision of market data from Willis Towers Watson and legal advice
from both Addleshaw Goddard and Freshfields.
Shareholder voting and consideration of shareholder views
The 2020 Annual Statement from the Remuneration Committee Chair and the Annual Report on Remuneration were subject to an
advisory vote at the AGM on 25 June 2021. Our Remuneration Policy was last approved by shareholders on 24 June 2020.
Resolution
Date
Votes for
for Votes against
against Votes withheld
% of Votes
% of Votes
Annual Report on Remuneration
25 June 2021 422,362,208
98.6%
6,008,769
Remuneration Policy
24 June 2020 458,789,615
95.0% 24,425,820
1.4%
5.0%
40,400
596,332
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
122
Directors’ Remuneration Report continued
Executive remuneration at Entain
The remuneration framework for Executive Directors at Entain is intended to incentivise them to execute the Company’s strategy and
create long-term sustainable value for shareholders. It is simple, focused and aligned with key financial and strategic business goals.
Fixed
Pay
Year 1
Base salary
Benefits
Pension
Year 2
Year 3
Year 4
Year 5
Annual
Bonus
Total
pay
One-year performance period
Three-year deferral period
Key performance metrics
Malus provisions apply
No further performance conditions
Clawback provisions apply
LTIP
Three-year performance period
Key performance metrics
Malus provisions apply
Two-year holding period
No further performance conditions
Clawback provisions apply
Shareholding
Requirement
Executive Directors’ minimum shareholding requirement applies both in and following cessation of employment
2021 – Executive Directors’ remuneration
The full explanatory notes for each element of remuneration are detailed on page 134 in the Annual Report on Remuneration.
£000s
Base Salary
Benefits
Pension
Jette Nygaard-Andersen (CEO appointed on 21 January 2021)
Rob Wood (CFO & Deputy CEO)
Robert Hoskin (Chief Governance Officer)
Shay Segev (CEO until 21 January 2021)
2021 Incentive outcomes
708
520
400
39
25
15
5
–
28
23
–
–
Annual
Bonus
1,769
LTIP
–
1,039
3,844
800
3,529
Total
2,530
5,441
4,734
–
–
39
The full explanatory notes for the annual bonus and LTIP outcomes are detailed on pages 135 and 136 in the Annual Report
on Remuneration.
Underlying
Group Operating
Profit (60%)
Threshold
£537.0m
Target
£553.6m
Stretch
£581.3m
Outcome
£587.5m
100% of
maximum
2021
Annual
Bonus
Growth in Online
NGR (25%)
w
Threshold
1% growth
Target
3% growth
Stretch
5% growth
Outcome
13%
Safer Betting
and Gaming
(15%)
Cumulative
EPS
(50%)
ESG Committee assessment of performance
Threshold
184p
Stretch
214p
Outcome
227.8p
100% of
maximum
100% of
maximum
100% of
maximum
2019-21
LTIP
Relative TSR
(50%)
w
Threshold
Median: 49%
Stretch
Upper quartile: 88%
Outcome
161%
100% of
maximum
Entain plc | Annual Report 2021 Governance 123
Implementation of the Remuneration Policy for Executive Directors in 2022
The tables below illustrate the balance of pay and time period of each element of the Policy for Executive Directors and summarises how
the Committee applied the Policy in 2021, together with details of how the Committee intend to implement the Policy in 2022.
Element
Salary
To provide competitive
fixed remuneration that
will attract and retain
appropriate talent.
Reflects an individual’s
responsibilities, experience
and role
Fixed pay
Y1
Y2 Y3 Y4 Y5
Benefits
To provide competitive
benefits and to attract
and retain high calibre
employees
Fixed pay
Y1
Y2 Y3 Y4 Y5
Pension
To provide an opportunity
for retirement planning
Fixed pay
Y1
Y2 Y3 Y4 Y5
Annual Bonus
To incentivise the
achievement of key
financial and non-financial
performance targets in line
with corporate strategy
over a one-year period
50% cash
Y1
Y2 Y3 Y4 Y5
50% shares
Y1
Y2 Y3 Y4 Y5
Operation
How we implemented
the Policy in 2021
How we plan to implement
the Policy in 2022
Salaries for Executive
Executive Directors’ salaries
Salary increases of 9.3% for
Directors are reviewed
annually by the Committee
and any increases normally
take effect from 1 January.
To the extent that increases
are awarded, these will
ordinarily be in-line with
the typical level of increase
across the wider workforce
The value of benefits is
based on the cost to the
Group and there is no pre-
determined maximum limit
Executive Directors receive
standard benefits such as
medical and life insurance
and car allowance
Executive Directors have the
opportunity to participate in
a company provided pension
which is in line with that
available to other employees
from 1 January 2021:
– CEO – £750,000 (J Nygaard-
Andersen from appointment
on 21 January)
– CFO & Deputy CEO –
£430,000 until 20 January;
increased to £525,000 from
21 January when appointed
Deputy CEO
– CGO – £400,000
– CEO – £675,000 (S Segev
until 21 January)
the CEO and 2.5% for both the
CFO & Deputy CEO and CGO
From 1 January 2022,
Executive Director
salaries will be:
– CEO – £820,000
– CFO & Deputy CEO –
£538,125
– CGO – £410,000
Normal company
benefit provision
Normal company
benefit provision
No change
CEO – 6% of salary cash
allowance (J Nygaard-
Andersen)
CFO & Deputy CEO – 4.5% of
salary company contribution
CGO – Opted out of the plan
CEO – Opted out of the plan
(S Segev)
Maximum annual
Maximum opportunities:
No change to the maximum
incentive opportunity
of 250% of salary for
the CEO and 200% of
salary for other Executive
Directors. No payment
will be made for below
threshold performance.
50% of the maximum
opportunity is payable for
target performance
50% of any bonus award
will be deferred into shares
for three years
Dividend equivalents are
payable on deferred shares
Malus and clawback
provisions apply
– CEO – 250%
– Other Executive Directors –
200%
Performance measures (as a %
of maximum):
– Underlying Group Operating
Profit (pre US joint venture)
(60%)
– Growth in Online NGR (25%)
– Safer Betting and Gaming
(15%)
Executive Directors awarded
bonuses of 100% of their
maximum opportunity
bonus opportunity or payment
mechanisms of bonuses
Performance measures (as a
% of maximum):
– Underlying Group Operating
Profit (pre US joint venture)
(60%)
– Growth in Online NGR
(20%)
– Safer Betting and Gaming
(15%)
– Customer (5%)
Targets are considered
commercially sensitive,
but will be disclosed
in the 2022 Directors’
Remuneration Report
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 124
Directors’ Remuneration Report continued
How we implemented the
Policy in 2021
How we plan to implement
the Policy in 2022
Grant levels for 2021 awards:
No change to maximum
– CEO – 300%
– Other Executive Directors –
250%
LTIP opportunities
The performance conditions will
be based on:
The performance conditions
– Relative TSR vs. the FTSE
were based on:
100 (50%)
– Relative TSR vs. a bespoke
group of sectoral peers (50%)
See page 127 for details on
LTIP awards to be granted
in 2022
– Cumulative EPS (1/3rd)
– Relative TSR vs. the FTSE
100 (1/3rd)
– Relative TSR vs. a bespoke
group of sectoral peers
(1/3rd)
The performance period for
the 2019 LTIP ended in the
year and 100% of this award
will vest. See page 136 for
further information
Shareholding guidelines:
No change
– CEO – 400%
– Other Executive Directors –
200%
The Executive Directors’ share
interests as at 31 December
2021 are detailed on page 138
Element
LTIP
To incentivise the execution
of the long-term business
plan and the delivery of
long-term sustainable value
for shareholders
Up to 300% of salary
Y1
Y2 Y3 Y4 Y5
Two-year holding period
Y1
Y2 Y3 Y4 Y5
Shareholding Guidelines
To ensure that Executive
Directors’ interests are
aligned with those of
shareholders over a longer
time horizon
Executive Directors’
share ownership
Y1
Y2 Y3 Y4 Y5
Operation
Maximum award of 300%
of base salary for the CEO
and 250% of base salary for
other Executive Directors
Threshold performance
results in 25% of the
award vesting
Awards are granted
annually and are
subject to a three-year
performance period
A two-year holding period
will apply following the
vesting period
Dividend equivalents are
payable on vested awards
Malus and clawback
provisions apply
The shareholding guideline is
equal to 400% of salary for
the CEO and 200% of salary
for other Executive Directors
Executive Directors are
required to retain 50% of the
post-tax number of vested
shares from the Company
incentive plans until the
minimum shareholding
requirement is met
and maintained
Executive Directors are
required to maintain 100%
of their guideline (or their
actual holding if lower)
for two years following
cessation of employment
Entain plc | Annual Report 2021 Governance 125
Performance metrics and link to strategy
The table below demonstrates how each element of our reward package links to our two strategic pillars of Growth and Sustainability.
More information about our strategic pillars is set out in the Chief Executive’s Review on pages 12 to 19.
Strategic pillars
Growth
Sustainability
Element of reward
Bonus
LTIP
Link to reward
Underlying Group operating profit
Growth in online NGR
Safer betting and gaming
Customer
Deferral of bonus into shares
Total shareholder return
Holding periods for Executive Directors
Bonus and LTIP
Malus and clawback provisions apply
Shareholding requirements for Executive Directors
Benefits
ShareSave for all employees
Free-share award (subject to shareholder approval)
Market related benefits package
Employee recognition
Learning and development opportunities
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 126
Directors’ Remuneration Report continued
2022 Annual bonus metrics
The Committee is mindful of the continued focus on ESG performance and is pleased to
introduce our new customer metric and to explain how the safer betting and gaming metric
will operate in 2022. The evolution of our annual bonus metrics highlights how we are
working to embed sustainability across all aspects of the business.
How will we ensure that the safer
betting and gaming metric will be
robustly measured, reviewed and
reflect underlying performance?
To provide the Committee and
shareholders with comfort that the
outcome for the safer betting and gaming
metric are robust and appropriate, the ESG
Committee will again have oversight of the
safer betting and gaming metric, and will
receive input from EPIC Risk Management
– the leading independent gambling
harm minimisation consultancy – when
reviewing and evaluating the delivery
against targets, prior to recommending the
outcome to the Committee.
How will the rest of the 2022 annual
bonus be determined?
The 80% of the annual bonus based on
financial metrics will be split between
underlying Group operating profit and
growth in online NGR. Underlying Group
operating profit remains at the same
proportion to 2021 (60%) and the NGR
weighting has reduced from 25% to 20%
to enable the inclusion of the customer
metric. NGR continues to be a key
performance indicator and fundamental to
driving shareholder value. The targets and
respective outcomes of the 2022 metrics
will be reported in next year’s Directors’
Remuneration Report.
Why has the Committee strengthened
the alignment between sustainability
and remuneration?
Customers are a key priority for Entain
and the new metric is designed to align
an element of the annual bonus with the
achievement of great customer outcomes.
How will the safer betting and gaming
metric evolve in 2022?
We are keen to continue the evolution
of the safer betting and gaming metric
by further enhancing our systems and
processes, continuing to improve the
detection and prevention of problematic
play. For 2022:
Why does the Committee think it
is important to include a customer
metric in the annual bonus?
The customer measure complements
existing commitments to continuously
enhance and personalise the protection
of customers, thereby placing them at the
heart of everything we do.
How will the new metric work?
We will use Net Promoter Score (“NPS”)
to measure performance across our
brands with the final outcome assessed
at Group level. NPS is a customer
loyalty and satisfaction measure that
companies use to track promoters and
detractors, producing a clear measure of
an organisation’s performance through its
customers’ eyes.
As a measure it is easily understood
by both external stakeholders and
employees, it aligns with our strategic
direction and the results will enable us to
take appropriate actions to improve our
customers’ experience.
How will the new metric be included in
the annual bonus?
5% of the 2022 annual bonus plan will
be based on our new customer metric
and 15% will continue to be dedicated
to safer betting and gaming. The 2022
performance metrics will therefore
comprise an 80% financial and 20% non-
financial weighting.
Half of the total will relate to the UK
market, where we will target the usage
of our active account management
tools amongst risk assessed online
customers. Through our Advanced
Responsibility and Care™ (“ARC™”)
platform we are able to monitor and
categorise player behaviour and
interact with the customer to effectively
influence behaviour, thereby providing a
more positive and safer experience.
The other half will relate to markets
outside the UK. The deployment
of ARC™’s advanced models and
technologies, tailored to each country’s
regulatory requirements, culture and
maturity, gives us an opportunity to
offer the same targeted interactions and
overall experiences to a large number of
our players around the globe.
In addition, to reach the threshold level
for pay-out under this metric, and show
our internal commitment, minimum
levels of completion of safer betting and
gaming and other relevant compulsory
training modules must be achieved by
our colleagues globally.
More information on the 2021 target and
outturn of the safer betting and gaming
metric can be found in this report on
page 135 and the ESG Committee report
on page 110.
Entain plc | Annual Report 2021 Governance 127
2022 LTIP targets
In determining the LTIP performance metrics for the 2022
award, the Committee has considered the difficulty in setting
appropriately stretching but incentivising EPS targets, given the
fast-changing external environment in which we currently operate.
The Committee have concluded that this can be addressed by
basing our 2022 LTIP award entirely on relative TSR metrics.
This aligns management’s interests closely with the experience
of investors and incentivises actions which enhance long-term
value creation.
For 2022, 50% of the LTIP awards will be based on TSR
performance relative to the FTSE 100 and 50% on performance
relative to an industry peer group of the following companies:
888 Holdings, Aristocrat, Betsson, Caesars Entertainment,
DraftKings, Evolution Gaming Group, Flutter Entertainment,
International Game Tech, Kindred Group, MGM Resorts, Playtech,
PointsBet, Rank Group, Rush Street Interactive and Sands LV.
The targets and vesting schedule for the 2022 LTIP awards are set
out below.
Measure
Weighting
TSR vs FTSE100
TSR vs peer
group
50%
50%
Threshold1
(25% vesting)
Maximum1
(100% vesting)
Median Upper quartile
Median Upper quartile
1. Straight line vesting between threshold and maximum.
The Committee retains discretion whether and, if so, how to
adjust targets post grant when determining the performance
outcome. Additionally, the Committee will assess the value of
the 2022 LTIP awards at vesting and will ensure that the final
outturn reflects all relevant factors, including consideration of
underlying performance.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 128
Directors’ Remuneration Report continued
Remuneration in context
Committed to good governance
When considering executive remuneration, the Committee takes into account a wide range of factors including legal and regulatory
requirements, associated guidance, and the views of shareholders and their representative bodies. How the Committee addresses the
following principles, taken from the 2018 UK Corporate Governance Code, is set out below.
Clarity
Our remuneration framework is structured to support the financial and strategic objectives of the Group,
aligning the interests of our Executive Directors with those of shareholders
We are committed to transparent communication with all our stakeholders, including shareholders
– page 37 sets out more details of how we engage with shareholders
Simplicity
We operate a simple, but effective remuneration framework
The annual bonus and LTIP reward performance against key measures of success for the business
There is clear line of sight for management and shareholders
Risk
Our incentives are structured to align with the Group’s risk management framework
Three-year deferral under the annual bonus and the two-year holding period on LTIP awards create long-
term alignment, as do our within and post-employment shareholding guidelines
Both incentives also incorporate robust performance targets, malus and clawback provisions, and
overarching Committee discretion to adjust formulaic outcomes
Predictability
The Remuneration Policy clearly sets out the possible future value of remuneration which Executive
Directors could receive, including the impact of share price appreciation of 50%
Proportionality
There is clear alignment between the performance of the Company and the rewards available to
Executive Directors
Incentive elements are closely aligned to our strategic goals, transparent and robustly assessed, with the
Committee having full discretion to adjust outcomes to ensure they align with overall Entain performance
Alignment
to culture
We are committed to effective stakeholder and colleague engagement, part of which is ensuring that the
Committee sees all relevant data relating to pay and conditions in the wider workforce
Operating responsibly towards our customers is fundamental to the way in which Entain operates and
remuneration outcomes are reviewed in the light of actions taken in support of our safer betting and
gaming agenda
This year we are introducing a new customer measure into our annual bonus, to reflect the importance of
putting the customer at the heart of everything we do, as well as evolving the safer betting and gaming
metric. Both metrics contribute to our sustainability and demonstrate a clear link between remuneration
and our culture. The Committee will also take broader ESG considerations into account and may apply
discretion if necessary when assessing the appropriateness of incentive outcomes
Entain plc | Annual Report 2021 Governance 129
Understanding our colleague reward framework
Our people are vital to our business. At Entain, we believe in fairness throughout the Company. The Group operates a number of general
principles applied to all levels.
We will provide a competitive package compared to the relevant market for each colleague.
We will ensure colleagues can share in the success of the business, where appropriate, through performance-based variable
remuneration and opportunity to acquire Entain shares.
We aim for transparency and a fair cascade of remuneration throughout the Group.
The Remuneration Committee considers a range of factors when deciding upon the remuneration for Executive Directors, one of which
is the alignment with pay practices across the wider workforce. The table below summarises the remuneration structure for employees
below the Board.
Element
Wider workforce
Executive Directors and senior management
Base salary
Benefits and pension
Short-term incentives
Long-term incentives
Our base salary is the basis for a competitive
total reward package for all employees, and we
review these annually
The review takes into account a number of
factors such as country budget, relevant
market comparators, the skills, knowledge
and experience of each individual, relativity
to peers within the Company and local
legislative requirements
In setting the salary review budget each year,
we consider affordability as well assessing
how employee base salaries are positioned
relative to market rates, forecasts of any
further market increases and attrition rates
We offer market-aligned benefits packages
reflecting market practice in each country in
which we operate
Where appropriate, we offer elements of
personal benefit choice to our employees
The base salary of our Executive Directors
and senior management forms the basis of
their total remuneration and we review their
salaries annually
The benefits packages of our Executive
Directors and senior management are aligned
with the wider workforce of the country in
which they are employed
Executive Directors are eligible to participate
in the pension arrangement in the country in
which they are based, on the same basis as
local employees
Many of our global workforce participate in
The Executive Directors and senior
the Group annual bonus, with metrics aligned
to those of the Executive Directors and
senior management
management participate in the same Group
annual bonus plan as eligible members of the
global workforce
We operate local incentive arrangements
where appropriate to align with
market practice
Half of any award to an Executive Director is
subject to deferral into shares for three years
Malus and clawback provisions apply
A small proportion of this population is eligible
to be considered for Restricted Stock Awards,
which vest after three years
Malus and clawback provisions apply
All employees have the chance to participate in
the Group’s all-employee ShareSave plan
Subject to approval by shareholders at the
2022 AGM, an award of “free shares” will
be made to all eligible employees in 2022, in
recognition of the Group’s strong performance
in 2021
We operate an LTIP with a three-year
performance period for Executive Directors and
senior management, and vesting is subject to
Group performance outcomes
Awards made to Executive Directors
are subject to a two-year holding period
following vesting
Malus and clawback provisions apply
Read more about the Committee’s work in 2021:
page 120
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 130
Directors’ Remuneration Report continued
Actions as a result of the Covid-19 pandemic
The Covid-19 pandemic continued to impact our colleagues, as it did everyone in 2021. Our people working in shops and stadia in
the UK were unable to work due to lockdowns in the first quarter of 2021 and those based in offices continued to work from home in
line with relevant local government guidance. We have been incredibly proud of how our people have reacted to these challenges
over the past two years. Their health, safety and wellbeing were our priority throughout. An extensive communication and wellbeing
programme was in place to support colleagues throughout the year, and will continue to be a focus in the future. For those people
placed on furlough in the UK, we ensured their salary was topped up to 100%, and the Group has subsequently chosen to repay
furlough monies received in 2021.
Consideration of colleague and stakeholder views
I was pleased that we were able to implement a number of
all-colleague remuneration initiatives during 2021, some of
which directly relate to feedback received during our Forum
engagement activities, as well as acknowledging the tremendous
effort that everyone has put in over the past two years during a
prolonged period of uncertainty:
The Group-wide annual salary review was brought forward
from 1 January 2022 to 1 October 2021, acknowledging the
strength of the Group’s performance during the year.
We acknowledged the commitment of our UK Retail
colleagues, who have continually put customers first every
day and shown great resilience throughout the pandemic, by
announcing an increase in their hourly rate of pay. With effect
from 1 April 2022 this will be a minimum of £10 per hour, up
from £9.13 per hour, and takes our minimum level of pay above
that recommended by the Real Living Wage Foundation.
A review of benefit structures in the UK and Gibraltar led to an
increase in the maximum employer pension contribution to 6%
of base salary.
All of our colleagues have the opportunity to share in the value
they create. The successful launch of our first all-employee
ShareSave plan in April 2021 saw over 20% of our colleagues
electing to participate, giving them the opportunity to
purchase Entain shares at an option price of £12.64. A second
ShareSave will be launched in 2022.
Subject to approval by shareholders at the 2022 AGM,
a “free share” award of £300 of Entain shares will be made
to all eligible employees later in 2022. The award is designed
to include colleagues across the entire Group, including recent
acquisitions, and to build on the ShareSave plan by further
aligning interests with shareholders.
All of these initiatives acknowledge the importance of our
colleagues in delivering the Group’s objectives and I look
forward to continuing the dialogue with our people in 2022.
The Committee supports and aims for fairness and transparency
of remuneration arrangements across the Group, with consistent
principles underlying both pay for the Executive Directors and
that for our wider colleague population. To support this, the
Committee receives regular updates, for example, during the
year, a detailed paper on Group-wide all colleague remuneration
arrangements was presented to the Committee.
We have a number of colleague forums within Entain. These play
an important role in providing our people with a voice and allow
them to provide the business with valuable insight and feedback
on a range of topics, including remuneration. During 2021,
representatives from our Retail Forum and National Forum
(for non-retail colleagues in the UK) attended a meeting of the
Remuneration Committee to provide direct feedback which
included discussion on topics currently concerning our colleagues.
This included the views of our UK Retail colleagues on how
the Group had reacted throughout the Covid-19 pandemic.
In addition, Virginia McDowell, in her role as Designated
Workforce Director, provides the Committee with updates on
colleague views on remuneration. Through the Board we receive
valuable insight as to general colleague views on remuneration;
the results of our Global ‘Your voice’ Survey, including those
related to pay and benefits. See page 98 for more detail on our
Board Engagement activities.
I was delighted to participate in Entain’s Global Conference,
held virtually in December 2021, bringing together colleague
representatives from across the Group, and giving them the
opportunity to engage with Virginia McDowell and myself
on a wide range of topics. The meeting was insightful and
informative with colleagues openly sharing their experiences
and suggestions for areas of improvement, and I commend their
passion for the business and the value of their contribution during
our discussion.
Entain plc | Annual Report 2021 Governance
131
CEO Pay Ratio (Unaudited)
The first table below sets out the ratio at median, 25th and
75th percentile of the total remuneration received by our
CEOs compared to the total remuneration received by our UK
colleagues, while the second provides further information on
the total colleague pay figure at each quartile, and the salary
component within this. Our combined CEOs’ 2021 pay was 122
times the median (50th percentile). This represents an increase
from last year, which is mainly attributable to an annual bonus
payment being made in 2021, with this having been waived by the
Executive Directors and Executive Committee members in 2020.
The Committee considers that this ratio is not out of line with other
retail organisations.
2021 CEO pay ratio
2020 CEO pay ratio
2019 CEO pay ratio
Method
Option A
Option A
Option A
25th
percentile
139
106
278
50th
percentile
122
95
229
75th
percentile
98
75
170
UK colleagues – pay element
Salary
Total remuneration
25th
percentile
15,487
18,503
50th
percentile
17,211
21,028
75th
percentile
20,125
26,330
Structures are in place to support salary progression and regular
market analysis, by geography and role function is carried out,
with action taken as appropriate.
Salaries are typically reviewed in January each year. For 2021,
the difficult decision was taken, due to the uncertainties of the
pandemic, that a general salary review process would not be
carried out. However, given our strong business performance
during 2021 it was agreed that the Group-wide review due in
January 2022 would be brought forward to 1 October 2021,
excluding Executive Directors and Executive Committee members.
Relative Importance of the Spend on Pay
The table below sets out the overall spend on pay for all colleagues
compared with the returns distributed to shareholders.
Significant distributions
Staff costs (£m)1
Distributions to shareholders (£m)2
2021
579.1
–
2020 % change
10.5%
524.0
n/a
–
1. The increase in staff costs is largely attributable to the increase in bonus payable
in respect of 2021 compared to 2020, combined with a change in mix of colleagues
employed, with a move towards a higher skilled online workforce and fewer shop
based retail colleagues.
2. No dividends were paid during 2020 or 2021.
We would highlight the following in terms of the approach taken:
Gender pay gap reporting
2021 is the fourth year in which we have published our gender pay
gap results. Our median hourly pay difference between male and
female colleagues in the UK is 5.3% (2020: 7.1%), which compares
favourably with the UK median pay gap of 15.4% across all sectors
(source: Office for National Statistics, October 2021). Our median
bonus pay gap is 59.6% (2020: 13%) with the increase being
driven by the deferral of the 2019 Group annual bonus payment,
meaning no bonus payment was captured in 2020 and two
payments are included in the 2021 figures.
From further analysis it is clear that these gaps largely remain
a function of lower numbers of women at senior levels. We are
committed to making Entain an inclusive place to work and we
are continuing to invest in initiatives to create greater diversity at
senior levels. Further information on these initiatives is provided
in the investing in people and communities section on page 57.
Our gender pay gap report for the year ended 5 April 2021,
together with contextual information and more detail on the
initiatives we have underway to close our gender pay gap, can be
viewed on the Company’s website at www.entaingroup.com.
Option A was chosen as it is considered to be the most accurate
way of identifying colleagues at P25, P50 and P75, and is
aligned with investor expectations. Under this approach we
calculate total remuneration for all of our UK colleagues and
rank them accordingly on this basis.
The lower quartile, median and upper quartile colleagues
were calculated based on full-time equivalent data as at
31 December 2021.
In reviewing the colleague pay data, the Committee is
comfortable that the P25, P50 and P75 individuals identified
appropriately reflect the colleague pay profile at those quartiles,
and that the overall picture presented by the ratios is consistent
with our pay, reward and progression policies for UK colleagues.
The calculation of salary and total remuneration includes any
payments made that were reclaimed via the UK Coronavirus Job
Retention Scheme (furlough) during 2021.
The Committee notes that Entain has in place a number of
initiatives to ensure that the pay and conditions for our wider
colleague population are fair and reasonable and receives regular
updates on reward practices throughout the Group.
We aim to provide a market competitive remuneration package in
each of the countries in which we operate. This includes benefits
appropriate to the local market and the ability for many colleagues
to share in the success of Entain via annual incentive programmes.
After the successful launch of our first all-employee ShareSave
plan last year, another cycle of ShareSave will be offered in April
2022. This sits alongside the “free share” award which, subject
to shareholder approval at the AGM, will be offered to all eligible
employees later in the year.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
132
Directors’ Remuneration Report continued
Summary of performance
The chart below shows the value of £100 invested in Entain plc since obtaining Main Market listing on 1 February 2016, compared
with the value of £100 invested in the FTSE 100 Index and the FTSE 350 Travel and Leisure Index. The FTSE 100 has been chosen on
the basis that this is the index in which Entain was a constituent of at the end of 2021.
£100 invested in Entain plc on 1 February 2016 would have been worth £416 at 31 December 2021 compared with £154 if invested in
the FTSE 100 and £100 if invested in the FTSE 350 Travel and Leisure Index.
Over the three-year period 1 January 2019 to 31 December 2021 (the period covered by the 2019 LTIP) the total shareholder return
(“TSR”) of Entain shares was +165% compared with +23% for the FTSE 100 and -10% for the FTSE 350 Travel and Leisure Index.
£500
£400
£300
£200
£100
01/02/16
31/12/16
31/12/17
31/12/18
31/12/19
31/12/20
31/12/21
Entain
FTSE 100
FTSE 350 Travel & Leisure Index
Source: Datastream
Entain plc | Annual Report 2021 Governance
133
Summary of CEO remuneration outcomes: 2015–2021
Year
CEO
Single figure of total
remuneration4
2021
2020
2019
2018
2017
2016
2015
J Nygaard-
Andersen1
S Segev2
S Segev2 K Alexander3 K Alexander K Alexander K Alexander K Alexander K Alexander
£2.53m
£0.04m
£0.3m
£1.68m
£5.23m £19.10m £18.21m £17.83m
£3.41m
Annual bonus pay-out5
(% of maximum)
100%
LTIP vesting
(% of maximum)
Legacy award vesting
(% of maximum)
–
–
–
–
–
–
–
–
–
100%
92%
100%
89.8%
91.1%
–
–
–
–
–
–
–
–
100%
100%
100%
100%
1. Jette Nygaard-Andersen was appointed CEO on 21 January 2021.
2. Shay Segev was appointed CEO on 17 July 2020 and stepped down from the Board on 21 January 2021. Shay’s 2018 and 2019 LTIP awards lapsed when he left employment
and he was not entitled to any bonus payment in respect of 2021.
3. Kenneth Alexander retired from the role of CEO on 17 July 2020.
4. Figures for 2015, 2016 and 2017 were previously reported in Euros and have been converted into GBP using an average rate for the relevant year.
5. The Executive Directors waived any entitlement to bonus for 2020 due to the Covid-19 pandemic.
Change in Directors’ pay for the year in comparison to all Entain colleagues
The table below shows the year-on-year change in salary, benefits and annual bonus earned from 2021 to 2020, building to a
five-year history, for all Executive and Non-Executive Directors and the Chairman of the Board, compared to that for Entain’s UK
colleagues. The comparison is not able to be shown for those individuals who were not in role for the full 12 months of either year.
Base salary/fees
Benefits
Annual bonus Base salary/fees
Benefits
Annual bonus
2021
2020
Executive Directors
J Nygaard-Andersen1
R Wood2
R Hoskin3
Non-Executive Directors4
B Gibson5,6
P Bouchut6
S David3
M Gregory3
P Isola6
V Jarman3
V McDowell6
D Satz7
All colleagues8
–
27.2%
–
5.3%
1.9%
–
–
5.4%
–
5.4%
–
0.1%
–
2.2%
–
n/a
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.9%
132.4%
–
–
–
–
(3.8)%
–
–
(8.3)%
–
(8.5)%
–
3.5%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1.4)%
(53.1)%
1. Jette Nygaard-Andersen joined the Board in 2019 and was appointed CEO in 2021. As she was not in either role for a full 12 months no comparison is shown.
2. Rob Wood joined the Board during 2019. As he was not in role for the full 12 months of 2019, no comparison is shown in respect of 2020. In 2020, in his role as CFO, Rob was
subject to a 20% reduction in salary for three months, and additionally as an Executive Director he waived his entitlement to receive a bonus under the 2020 Group annual
bonus plan. In 2021, Rob’s salary was increased from £430,000 to £525,000, effective 21 January 2021, upon taking on additional responsibility as Deputy CEO.
3. Robert Hoskin, Stella David, Mark Gregory and Vicky Jarman joined the Board during 2021, therefore no comparisons are shown.
4. Non-Executive Directors receive fees only and do not receive any additional benefits or bonus payments.
5. Barry Gibson joined the Board during 2019. As he was not in role for the full 12 months of 2019, no comparison is shown in respect of 2020.
6. In 2020, Barry Gibson, Pierre Bouchut, Peter Isola and Virginia McDowell were all subject to a 20% reduction in fees for three months. There were no increases to the Non-
Executive Directors fee structure in 2021.
7. David Satz was appointed to the Board in 2020, therefore no comparisons are shown.
8. The all colleague data is comprised of that used to calculate the CEO pay ratio. To eliminate the impact of changes in colleague numbers year-on-year this has been based
on average base salary, benefits and annual bonus data for 2019/20 and 2020/21. For 2021, the difficult decision was taken, due to the uncertainties of the pandemic, not
to proceed with the 2021 all-employee salary review which has resulted in the low level of year-on-year change shown above. The significant percentage change in annual
bonus reflects an outturn of 100% in 2021 compared to a bonus payment capped at target in 2020 (when the Executive Directors waived their bonus entitlement).
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
134
Annual Report on Remuneration
The 2021 Annual Report on Remuneration contains details of the remuneration paid and awarded to Directors during the financial year
ended 31 December 2021. This report has been prepared in accordance with the provisions of the Companies Act 2016, Schedule 8 of
the Large and Medium Sized Companies Groups (Accounts and Reports) (Amendment) Regulations 2013 (the “Regulations”), the Listing
Rules of the UK Financial Conduct Authority and the UK Corporate Governance Code. An advisory resolution to approve the Annual
Report on Remuneration and the Annual Statement will be put to shareholders at the 2022 AGM.
Single figure of remuneration table (audited)
The remuneration of Executive Directors, showing the breakdown between components with comparative figures for the prior financial
year, is shown below. Figures provided have been calculated in accordance with the Regulations. Further information on the component
elements is provided in subsequent sections.
Executive Directors
Jette Nygaard-Andersen2 2021
Rob Wood3
Robert Hoskin4
Shay Segev5
2020
2021
2020
2021
2020
2021
2020
Base
salary
£000
708
–
520
408
400
–
39
301
Benefits
Pension
£000
£000
25
–
15
15
5
–
–
2
28
–
23
18
–
–
–
–
Annual
bonus
Long-term
incentive1
£000
1,769
–
1,039
–
800
–
–
–
£000
–
–
3,844
559
3,529
–
–
–
Total
£000
2,530
–
5,441
1,000
4,734
–
39
303
Total fixed
remuneration
Total variable
remuneration
£000
761
–
558
441
405
–
39
303
£000
1,769
–
4,883
559
4,329
–
–
–
1. An assumed share price of 1,890p has been used to calculate the value of the 2019 LTIP awards shown for each Executive Director in respect of 2021. This represents the
average share price over the final quarter of the 2021 financial year. The proportion of the value of the 2019 LTIP that is attributable to share price appreciation is 73.2%. The
values shown also include the value of dividend equivalents payable.
2. Jette Nygaard-Andersen was appointed CEO on 21 January 2021, having joined the Board as a Non-Executive Director in 2019. Fees paid during 2020 and 2021 for her role as a
Non-Executive Director are shown on page 139.
3. The amount shown in last year’s report for Rob Wood in respect of the 2018 LTIP was calculated based on an assumed share price of 1,035p. The actual share price at vesting on
3 November 2021 was 2,031p. The amount shown for 2020 has been updated to reflect this change and the value of dividend equivalents payable. The proportion of the value of
the 2018 LTIP that was attributable to share price appreciation is 50.8%.
4. Robert Hoskin was appointed Chief Governance Officer and to the Board on 1 January 2021.
5. Shay Segev resigned from the Board on 21 January 2021. The LTIP award granted to Shay in 2019 lapsed when he left employment and so nil value is shown in the table above.
Further information on the single figure of remuneration table
Base salary
Salaries are normally reviewed on 1 January each year.
As set out in the Chair’s statement on page 116, Jette Nygaard-Andersen was appointed CEO on 21 January 2021 on a salary of
£750,000. Fees paid to Jette during 2020 and 2021 when she served as a Non-Executive Director are shown on page 139.
Rob Wood was on a salary of £430,000 until 20 January 2021, which increased to £525,000 from 21 January 2021 when he was
appointed as Deputy CEO, in addition to his CFO responsibilities.
Robert Hoskin was on a salary of £400,000 from his appointment to the Board on 1 January 2021.
Shay Segev was on a salary of £675,000. He left the Board on 21 January 2021.
Benefits and pension
Executive Directors may receive taxable benefits such as private medical and life insurance and car allowance.
Jette Nygaard-Andersen received a car allowance of £25,000 and, from May 2021, an allowance in lieu of an employer pension
contribution equal to 6% of her base salary. A cash allowance was approved by the Remuneration Committee as Jette is a Danish tax
resident and therefore not able to participate in any of the Group’s existing employee pension arrangements. The quantum is aligned to
the maximum company contribution available to other employees in the UK.
Rob Wood received a car allowance of £10,700 and participated in the defined contribution pension arrangements which are available on
the same basis as for other colleagues, receiving a company contribution of 4.5% of his base salary.
Robert Hoskin and Shay Segev opted out of the pension plan.
Entain plc | Annual Report 2021 Governance 135
2021 annual bonus
The Executive Directors were eligible to participate in the annual bonus for 2021.
The annual bonus framework for 2021 was based on performance against three key measures for Entain, underlying Group operating
profit, pre US joint venture (60%), growth in online NGR (25%) and safer betting and gaming (“SG”) (15%). The SG metric was introduced
in 2021, under the oversight of the ESG Committee, and more detail on the assessment of the final outturn can be found in the ESG
Committee report on page 110. At the start of the year the Committee set stretching targets under these measures, was satisfied that
these represented challenging but realistic targets, and that significant out-performance would be required to achieve a maximum pay-
out.
The targets set for financial metrics, the performance achieved against all metrics, and the resulting pay-out is set out in the table below.
Metric
Weighting
Threshold
Target
Stretch
Actual
Pay-out
as a % of
maximum for
each metric
Total weighting
of each metric
as a % of
maximum bonus
opportunity
Underlying Group operating
profit1
Growth in online NGR2
Safer betting and gaming3
60%
25%
15%
£537.0m
£553.6m
£581.3m
£587.5m
1% growth
3% growth
5% growth
13% growth
See footnote 3 below
100%
100%
100%
Total as a % of maximum opportunity
60%
25%
15%
100%
1. In assessing the underlying Group operating profit outcome, the Committee considered several items, which impacted both positively and negatively during 2021. In reaching
their conclusion, as would be expected, the Committee have excluded the benefit of furlough payments received during 2021. We have also excluded the net benefit of
acquisitions, and the impact of the temporary withdrawal from the Netherlands market in the fourth quarter of 2021. (The actual figure shown above is stated after these
adjustments).
2. When reviewing online NGR performance, the Committee considered whether maximum pay-out was appropriate given the level of outperformance against the target. Whilst
mindful of the impact on this metric of the Covid-19 pandemic and its effect on customer behaviour, the Committee were satisfied that the outperformance achieved was not
solely a temporary effect. The Committee concluded that the achievement represented “real” growth and the maximum target would have been exceeded without the positive
impact of Covid-19 related restrictions.
3. In 2021, Entain introduced a safer betting and gaming metric to our annual bonus based on the development of our player protection algorithms. The full metric comprised of two
equally weighted parts at 7.5% each (15% in total):
– UK market – based on the Group’s progress in rolling out new significantly enhanced protection trackers, within the Advanced Responsibility & Care™ programme, with the aim
–
of improving our ability to identify and provide tailored support and interactions to those most at risk.
International market – based on the Group’s progress in rolling out new markers and algorithms (bespoke by territory) within at least 10 less mature international markets,
applying our learnings and best practice to improve our player protection offering.
EPIC Risk Management, the leading gambling harm minimisation consultancy, independently reviewed the work carried out and provided advice to the ESG Committee which has
enabled it to make a recommendation on the outturn to the Committee. More detail on the assessment of the final outturn can be found in the ESG Committee report on page 110.
The Committee noted the level of pay-out, when assessed on a formulaic basis, which was reflective of the strong NGR performance and
the consistent ability of our operating model to deliver diversified and sustainable growth. In line with the provisions of the UK Corporate
Governance Code, the Committee carefully considered whether the proposed outcome could be justified in the context of Entain’s overall
performance. In doing so, it considered:
Business performance during 2021, including progress against financial, operational, and strategic targets;
The quality of underlying earnings and whether any significant one-off factors influenced the results;
Our risk and reputational performance;
The individual performance of the Executive Directors; and
Entain’s share price performance and the experience of our shareholders over the year.
The Committee noted the Group’s excellent operational and financial progress during the year, as set out in the 2021 Group performance
highlights in the Chair’s letter on page 116.
Taking all the above factors into account, the Committee considered that the outcome under the annual bonus was justifiable and a fair
reflection of overall Entain performance during the year, and therefore concluded no further discretionary adjustments were necessary.
As a result, the table below sets out the final outcome and annual bonus payable to each Executive Director for 2021.
Bonus opportunity (% of salary)
Salary eligible for 2021 bonus
Outcome:
– As % of maximum bonus
– As % of salary
– As £ amount
J Nygaard-Andersen1
250%
£707,693
100%
250%
R Wood2
200%
£519,641
100%
200%
R Hoskin
200%
£400,000
100%
200%
£1,769,233
£1,039,282
£800,000
1. Jette Nygaard-Andersen’s bonus eligible salary is pro-rated to reflect her appointment as CEO on 21 January 2021.
2. Rob Wood’s bonus eligible salary is pro-rated to reflect his salary of £430,000 from 1 January to 20 January 2021, and his salary of £525,000, effective 21 January 2021.
Half of the total bonus is paid in cash following the year-end, while half is deferred into shares for three years under the Deferred
Bonus Plan.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 136
Annual Report on Remuneration continued
2019 Long-Term Incentive Plan
The Long-Term Incentive Plan values shown in the single figure table for 2021 relate to the vesting of LTIP awards made in 2019.
The targets attached to the 2019 LTIP awards and the performance outcome against these are set out below.
Measure
Relative TSR vs. FTSE 51-150
Cumulative adjusted EPS
Outcome
Weighting
Threshold
(25% vesting)
Maximum
(100% vesting)
Entain
performance
50%
50%
100%
Median:
49%
184p
Upper quartile:
88%
161%
214p
227.8p
Straight-line vesting between
threshold and maximum
Vesting
100% of
maximum
100% of
maximum
100% of
maximum
In considering the outcome of the EPS element of the 2019 LTIP, the Committee noted that the reported result for EPS over the three-year
performance period exceeded the upper end of the target range. In assessing the final outcome, the Committee further reviewed several
items that impacted EPS, both positive and negative, during the performance period. The benefit of furlough payments received during
2020 and 2021 have been excluded, as has the impact of the introduction of IFRS 16, the net benefit of acquisitions, the exit from our
businesses in Switzerland and the Netherlands and the impact of regulatory changes in Germany. None of these items were reflected in
the original EPS targets. The resulting EPS outcome (as shown in the table above) continues to exceed the upper end of the target range.
In the Committee’s view, this level of vesting for this part of the award is a fair and reasonable outcome.
As an additional check, the Committee assessed whether Entain’s overall performance over the three years justified the combined
vesting level of 100%. In doing so, they took into account the Group’s financial and operational achievements over this period, our share
price performance, and other considerations such as the progress we have made with our safer betting and gaming and sustainability
programmes. The Committee found it particularly reassuring that over the period:
We have seen continued expansion into new markets with the completion of the acquisitions of Bet.pt in Portugal and Enlabs AB in the
Baltics, as well as Unikrn to drive access to the esports skill based wagering market.
BetMGM, our joint venture in the US, is now live in 21 markets with strong momentum as a leading player where it operates.
The Company’s share price had increased by 150% from 1 January 2019 to 31 December 2021, despite impacts from Covid-19 in the
second and third years.
All of these factors gave the Committee comfort that a vesting outcome of 100% of maximum was fair and reasonable, and appropriately
reflected Entain’s performance and value delivered to shareholders over the period.
The LTIP awards granted in 2019 had not vested at the time this report was finalised, and so the reported value has been based on the
average share price in the last three months of the financial year, which was 1,890p. The maximum value of the awards, the value of the
awards included in the single figure of remuneration table and the value attributable to share price movement is set out below.
LTIP shares
under award
Maximum value of
award achievable
% vesting
LTIP shares
vesting
Value of
shares
vesting
Value of
dividend
equivalents
due1
Total value
of LTIP
(single figure)
Value
attributable
to share price
movement
197,044
180,886
£3,724,132
£3,418,745
100%
100%
197,044 £3,724,132
£120,204 £3,844,336 £2,845,323
180,886
£3,418,745
£110,357 £3,529,102 £2,612,010
Name
R Wood
R Hoskin
1. Based on dividends paid in the period since the date of grant to 31 December 2021.
2021 Long-Term Incentive Plan
Share awards granted during 2021 (audited)
The table below sets out share awards granted to the Executive Directors during 2021 under the LTIP. No awards were made under
the Annual & Deferred Bonus Plan as the Executive Directors’ waived their entitlement to receive a bonus under the 2020 Group annual
bonus plan.
Name
J Nygaard-
Andersen
R Wood
R Hoskin
Award type
Grant date
award Shares awarded1
Face value of
% vesting
at threshold
performance
% vesting at
maximum
performance
Performance
conditions
LTIP 24 March 2021
£2,250,000
LTIP 24 March 2021
£1,312,500
LTIP 24 March 2021
£1,000,000
147,540
86,065
65,573
25%
25%
25%
100% See next page
100% See next page
100% See next page
1. Share price used for grant calculations is 1,525p, the closing share price on the day prior to grant.
Entain plc | Annual Report 2021 Governance 137
For the 2021 LTIP, the Committee agreed that the award should be based on the same measures as 2020. This provides a balance of
external relative performance against peers and the broader market as well as absolute financial performance with reference to EPS
which is a key performance indicator for the Group. Performance for these awards will be measured over the period 1 January 2021 to
31 December 2023.
Measure
Relative TSR vs. FTSE 100
Relative TSR vs. bespoke peer group1
Cumulative adjusted EPS
Weighting
One-third
One-third
One-third
Threshold (25% vesting)
Maximum (100% vesting)
Median
255p
Upper quartile
296p
Straight-line vesting between threshold and maximum
1. The bespoke peer group comprises the following companies for the 2021 awards: 888 Holdings, Betsson, Caesars Entertainment, Evolution Gaming Group, Flutter Entertainment,
Gamesys, International Game Technology, Kindred Group, Playtech, Rank Group and TabCorp Holdings.
The Committee was comfortable that the EPS targets represented stretching performance, with management required to deliver three-
year CAGR in EPS of 16% to reach maximum vesting.
The terms of the 2021 awards provide the Committee with the ability to review the outcome at vesting and to make appropriate
adjustments if it concludes that participants have benefited from “windfall gains” over the performance period. The Committee also
retains the ability, under the terms of the Policy, to exercise discretion to override the formulaic outcomes if it believes that the outturn is
not appropriate.
Shareholdings and share interests (audited)
Shareholding guidelines
Executive Directors are required to maintain a shareholding as determined by the Committee and retain this for a period of time following
cessation from the role. Executive Directors are expected to build up their shareholding over a period of five years from the date of
appointment as an Executive Director (or, if later, from the date of any change to the terms of the shareholding requirement). Shares that
count towards the requirement are those that are beneficially owned, any vested share awards subject to a holding period and unvested
deferred bonus shares (on an after-tax basis). The current shareholding requirements are:
CEO – 400% of base salary.
Other Executive Directors – 200% of base salary.
In line with the provisions of the UK Corporate Governance Code, the Committee has implemented post-employment shareholding
requirements for the Executive Directors to ensure that they remain aligned with shareholders for a period after they step down from
the Board. The Committee expects Executive Directors to maintain 100% of their guideline (or their actual holding if lower) for two years
following departure. Shares purchased by the Executive Directors out of their own funds will not count towards these guidelines. To assist
in the implementation of the post-employment shareholding guideline our policy includes the potential to require leavers to deposit the
requisite number of shares into a trust or nominee arrangement. In the case of good leavers, future vestings may be made subject to
adherence to the shareholding requirement.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 138
Annual Report on Remuneration continued
Share interests
As at 31 December 2021, the value of Jette Nygaard-Andersen, Rob Wood and Robert Hoskin’s beneficial shareholdings were £0.2m,
£1.0m and £1.2m respectively. Following their appointments to the Board, Jette Nygaard-Andersen, in 2021, and Rob Wood, in 2019,
continue to build up their holdings in Entain shares. Robert Hoskin was appointed to the Board in 2021 and meets his shareholding
requirement of 200% of base salary.
Executive Directors’ share interests as at 31 December 2021 are set out below.
Share interests
subject to
performance conditions
Share interests not
subject to
performance
conditions
Name
Number of
beneficially
owned shares1
Share
awards
Share
options
Share
awards
Share
options
Total interests
at 31 December
2021
Value of shares
held as % of
base salary2
Shareholding
requirement
met?
J Nygaard-Andersen
9,900
147,540
40,052
419,912
69,435
1,602,800
–
–
365,619
663,958
–
–
–
–
–
39,067
–
–
–
157,440
499,031
435,054
53,352
2,320,110
22%
195%
292%
n/a
N
N
Y
n/a
R Wood
R Hoskin3
S Segev4
1. Beneficially owned shares include shares held directly or indirectly by connected persons. The value of £0.2m, £1.0m and £1.2m for Jette Nygaard-Andersen, Rob Wood and
Robert Hoskin respectively is based on the closing share price at 31 December 2021 (1,683p). There were no changes in the number of beneficially owned shares for any
Executive Director between 31 December 2021 and the date this report was signed.
2. In line with our shareholding policy, the value of shares held as a percentage of base salary includes shares owned by the Executive Directors and the after-tax shares held under
the Annual & Deferred Bonus Plan. The value of shareholding is based on the closing share price at 31 December 2021 (1,683p).
3. In line with our below Board Remuneration Policy, Robert Hoskin received a cash award of £750,000 in August 2020, which will be payable in January 2024, subject to continued
employment.
4. As a former Executive Director, the information shown above for Shay Segev reflects the position on 21 January 2021, the date he stepped down from the Board. The 663,958
share options held, subject to performance conditions, lapsed when he left employment and the share options, not subject to performance conditions, vested under the 2017 LTIP
award and were exercised in March 2021.
Executive Directors’ service contracts and external appointments
Executive Directors have rolling contracts, terminable by either party giving the appropriate notice.
Director
J Nygaard-Andersen
R Wood
R Hoskin
Date appointed
21 January 2021
5 March 2019
1 January 2021
Arrangement
Service contract
Service contract
Service contract
Notice period
12 months
12 months
12 months
Subject to Board approval, Executive Directors are able to accept appropriate outside Non-Executive Director appointments provided the
aggregate commitment is compatible with their duties as Executive Directors. The Executive Directors concerned may retain fees paid
for these services. Jette Nygaard-Andersen is a Non-Executive Director of Coloplast A/S and in 2021 she was paid fees of 600,000 DKK
which she retained. The other Executive Directors do not currently hold any external appointments.
Payments for loss of office (audited)
As announced on 11 January 2021, Shay Segev resigned from Entain to take up a new role. He stepped down from the Board on
21 January and left employment on 31 May 2021. In line with our Remuneration Policy:
Shay received £243,912 in salary and benefits between 22 January 2021 and the date of termination; his salary remained unchanged
at 1 January 2021. Shay’s salary and benefits received up to 21 January 2021 are shown in the single figure table on page 134.
Outstanding awards under the LTIP lapsed when he left employment of the Group at the end of May 2021.
No annual bonus was payable in respect of 2021.
In line with our post-employment shareholding requirement policy, Shay is required to meet his full shareholding requirement of 400%
for two years following his departure.
Payments to past Directors (audited)
Kenneth Alexander retired as CEO on 17 July 2020 and full details of his leaving arrangements can be found in the 2020 Directors’
Remuneration Report. This includes the requirement, under the Policy, to maintain a shareholding of 400% of salary for two years
following his departure. The table below sets out details of the ABDP and LTIP awards, made in 2018, which were both released to him
on the ordinary vesting date of 20 September 2021. The 2018 LTIP award was pro-rated for time served during the performance period
as well as the performance condition. He also received dividend equivalents on all of the vested shares.
Award
2018 LTIP
2018 ADBP
End of performance period
Number of shares
31 December 2020
20 September 2021
118,039
100,576
Entain plc | Annual Report 2021 Governance 139
Chairman and Non-Executive Directors
Single figure of remuneration table (audited)
The remuneration of the Non-Executive Directors is shown below.
Non-Executive Directors
Barry Gibson2
Pierre Bouchut2
Stella David3
Mark Gregory4
Peter Isola2
Vicky Jarman3
Virginia McDowell2
Stephen Morana2,5
Jette Nygaard-Andersen6
David Satz
Former Non-Executive
Directors7
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Fees1
£000
Benefits
£000
Annual
bonus
£000
Long-term
incentives
£000
Pension
£000
Total
£000
Total fixed
remuneration
Total variable
remuneration
450
428
108
106
128
–
88
–
85
81
70
–
106
101
28
147
7
85
85
17
_
157
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
450
428
108
106
128
–
88
–
85
81
70
–
106
101
28
147
7
85
85
17
–
450
428
108
106
128
–
88
–
85
81
70
–
106
101
28
147
7
85
85
17
–
157
157
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1. Non-Executive Directors receive fees only and do not receive any additional benefits or bonus payments.
2. In 2020, Barry Gibson, Pierre Bouchut, Peter Isola, Virginia McDowell and Stephen Morana were all subject to a 20% reduction in fees for three months.
3. Stella David and Vicky Jarman joined the Board on 4 March 2021.
4. Mark Gregory joined the Board on 17 March 2021.
5. Stephen Morana stepped down from the Board on 4 March 2021.
6. Jette Nygaard-Andersen stepped down as a Non-Executive Director when she was appointed as CEO on 21 January 2021. Her remuneration as CEO is set out on page 134.
7. Fees totalling £157,000 were paid to Non-Executive Directors in 2020 who stood down from the Board during that year and received no fees in relation to 2021.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 140
Annual Report on Remuneration continued
Fee structure
The table below sets out the fee structure for 2022 for the Non-Executive Directors and the Chairman of the Board. These are unchanged
from those in 2021. In early 2020, the Non-Executive Directors were given the one-off choice to have their fees denominated in either
GBP or Euros, and subsequently an equivalent USD fee level was established.
Chairman of the Board
Senior Independent Non-Executive Director
Board member
Chair of Audit, Remuneration or ESG Committee
Letters of appointment
As at 1 January 2022
£450,000
£155,000
€100,000 or £85,000 or $117,000
€25,000 or £21,000
Non-Executive Directors are appointed under letters of appointment and as such do not have service contracts. Apart from the Chairman
of the Board, each Non-Executive Director is subject to an initial three-year term subject to annual re-election at the Company’s AGM.
All letters of appointment are available for viewing at the Company’s registered office and at the AGM.
Director
B Gibson
P Bouchut
S David
M Gregory
P Isola
V Jarman
V McDowell
D Satz
Date appointed
4 November 2019
Arrangement
Notice period
Letter of appointment
13 September 2018
Letter of appointment
4 March 2021
17 March 2021
2 February 2016
4 March 2021
6 June 2018
22 October 2020
Letter of appointment
Letter of appointment
Letter of appointment
Letter of appointment
Letter of appointment
Letter of appointment
3 months
3 months
3 months
3 months
3 months
3 months
3 months
3 months
Share interests (audited)
Non-Executive Directors’ share interests as at 31 December 2021 are set out below. With the exception of Stella David and Vicky Jarman
who only joined the Board in March 2021 and David Satz who joined the Board in October 2020, all Non-Executive Directors hold shares
with a value in excess of one times their annual fee.
Director
B Gibson
P Bouchut
S David
M Gregory
P Isola
V Jarman
V McDowell
S Morana2
D Satz
Number of beneficially
owned shares1
68,437
38,500
3,652
7,446
36,135
–
15,000
34,184
–
1. Beneficially owned shares include shares held directly or indirectly by connected persons. There were no changes in the number of shares owned outright for any Non-Executive
Director between 31 December 2021 and the date this report was signed.
2. As a former Non-Executive Director, the beneficially owned shares for Stephen Morana reflects the position on 4 March 2021, the date he stepped down from the Board.
Mark Gregory
Chair of the Remuneration Committee
3 March 2022
Entain plc | Annual Report 2021 Governance Directors’ Report
141
Principal activity
Customer and creditor payment policy
Entain plc (the “Company”) and its subsidiaries (together the
“Group”) is a major international sports-betting and gaming
company operating both online and in the retail sector.
The Group is committed to prompt payment of customer cash-out
requests and maintains adequate cash reserves to cover customer
withdrawals and balances.
The Company is registered as a public limited company under
the Isle of Man Companies Act 2006 and is listed in the Premium
category on the Main Market of the London Stock Exchange.
Results and future performance
A review of the Group’s results and activities is covered within
the Strategic Report on pages 6 to 86. This incorporates the
Chairman’s statement, Chief Executive and Chief Financial Officer’s
review, which include an indication of likely future developments.
Key performance indicators
Key performance indicators in relation to the Group’s activities are
continually reviewed by senior management and are presented on
page 21.
Dividends
On 6 April 2020 the Group announced that the 2019 second interim
dividend would be withdrawn due to the ongoing uncertainty
surrounding Covid-19 and dividends have not resumed since that
date. No interim dividends have been declared with respect to the
year ended 31 December 2021.
At the date of this report, the Board has not proposed a dividend
given that many of our markets continued to be impacted by
Covid-19 restrictions into the start of the new financial year.
However, progress remains encouraging and the Board will review
the payment of dividends with future results.
Corporate Governance
The Directors recognise the importance of corporate governance
and their associated report is set out on pages 88 to 142.
The information in that section is deemed to form part of this
Report and so fulfils the requirements of the corporate governance
statement for the purposes of DTR 7.2.1.
As a company quoted on the Premium Main Market of the London
Stock Exchange, the Company has adopted the 2018 UK Corporate
Governance Code (“Code”), as amended from time to time, and will
seek to comply with premium listed company norms to the extent
appropriate for the size and nature of the Company.
Normally payments will be made to customers within seven days
of receiving a customer instruction.
In the case of other creditors, it is the Group’s policy to agree terms
at the outset of a transaction and ensure compliance with such
agreed terms. In the event that an invoice is contested then the
Group informs the supplier without delay and seeks to settle the
dispute quickly. During 2020, the Group appointed a Customer
Ombudsman Director.
Articles of Association
The Company’s Articles of Association may only be amended by
special resolution at a general meeting of shareholders.
Directors
The Directors of the Company who were in office during the year,
are disclosed on pages 88-89 .
The Company’s Articles of Association provide that any new
Director appointed by the Board during the year, having not been
previously elected by shareholders, may hold office only until the
next AGM, when that Director must retire and stand for election at
the meeting. The Articles also require one third of the Directors not
newly appointed since the last AGM to seek re-election.
In compliance with the recommendation of the 2018 Code, all
Directors will seek reappointment at the 2022 AGM, as they did
in 2021.
Directors’ remuneration
Both Executive Directors have Service Agreements and all the
Non-Executive Directors have Letters of Appointment and the
details of their key terms are set out in the Directors’ Remuneration
Report. Details of remuneration of each Director are provided in the
Remuneration Report on pages 116 to 140.
Powers of directors
Subject to company law and the Company’s articles, the Directors
may exercise all of the powers of the Company and may delegate
their power and discretion to Committees. The articles give the
Directors power to appoint and replace Directors.
Engagement with Employee Statements
This is discussed in the s172 Statement on page 36 and on
pages 98 to 99.
Engagement with Stakeholder Statements
This is discussed in the s172 Statement on pages 36 to 39 and on
pages 98 to 99.
Directors’ interests
This is reported in the Directors’ Remuneration Report on
pages 116 to 140 and provides details of the interests of each
Director, including details of current incentive schemes and long-
term incentive schemes, the interests of Directors in the share
capital of the Company and details of their share interests as at
31 December 2021.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 142
Director’s Report continued
Conflicts of interest
Political donations
On appointment, each Director must notify the Company of their
external board appointments, other significant commitments
and any actual or potential conflicts of interest. Each Director is
required to disclose actual or potential conflicts of interests to
the Board and where actual or potential conflicts of interest
arise, the relevant Director does not receive Board papers and is
excluded from discussions and voting on the subject matter that
gives rise to the conflict. The Board has a policy to identify and
manage Directors’ conflicts or potential conflicts of interest.
Directors’ Indemnities
The Company has entered into deeds of indemnity with each of the
Directors, which comply with the Isle of Man Companies Act 2006;
these remain in force as at the date of this report.
Share capital
Details of the Company’s authorised and issued share capital,
together with details of the movement therein, are set out in
Note 28 to the financial statements. This includes the rights and
obligations attaching to shares and restrictions on the transfer
of shares.
Substantial shareholdings – Interests in voting rights
As at 28 February 2022, the Company had been notified in
accordance with Chapter 5 of the Disclosure and Transparency
Rules of the following interests in the Company’s Shares:
The Company did not make any political donations or incur any
political expenditure during 2021 (2020: Nil).
Insurance
The Company maintains a directors and officers’ liability insurance
policy in respect of any legal costs that may be incurred against the
Directors in dealing with any legal claims or investigations.
Annual General Meeting
The Company’s Annual General Meeting will be held on 24 June
2022 at The Brewery, Chiswell Street, London EC1Y 4SA.
Independent Auditors
KPMG LLP (“KPMG”) has expressed its willingness to continue
in office as auditor and a resolution to re-appoint KPMG will be
proposed at the forthcoming AGM.
So far as the Directors are aware, there is no relevant audit
information (as defined by Section 418 of the Companies Act 2006)
of which the Company’s auditors are unaware, and each Director
has taken all the steps that he or she ought to have taken as a
Director in order to make himself or herself aware of any relevant
audit information and to establish that the Company’s auditors are
aware of that information.
On behalf of the Board:
Shareholder
The Capital
Group Companies
Sands
Capital Management
Number of
Shares
% of Issued Share
Capital & Total
Voting rights1
J M Barry Gibson
Chairman
64,825,853
11.05%
3 March 2022
28,900,339
4.93%
Registered office: 32 Athol Street Douglas, Isle of Man, IM1 1JB
1. The Company had 586,654,355 ordinary shares in issue on 28 February 2022.
Use of financial instruments
The risk management objectives and policies of the Group are set
out within Note 25 of the financial statements.
Entain plc | Annual Report 2021 Governance 143
Financial
statements
Financial statements
145
152
153
154
155
156
157
204
205
206
207
212
213
Independent Auditor’s Report
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement of
changes in equity
Consolidated statement of
cash flows
Notes to the consolidated
financial statements
Company income statement
Company balance sheet
Company statement of changes
in equity
Notes to the Company
financial statements
Glossary
Shareholder &
Corporate information
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
144
Entain plc | Annual Report 2021 Financial statements 145
Independent Auditor’s Report to
the members of Entain plc
1 Our opinion is unmodified
Basis for opinion
We have audited the financial statements of Entain Plc (“the
Company”) for the year ended 31 December 2021 which comprise
the Consolidated Income Statement, the Consolidated Statement
of Comprehensive Income, the Consolidated Balance Sheet, the
Consolidated Statement of Changes in Equity, the Consolidated
Statement of Cash Flows, the Company Income Statement, the
Company Balance Sheet, the Company Statement of Changes
in Equity, and the related notes, including the accounting policies
in Note 4.
In our opinion:
The financial statements give a true and fair view of the
state of the Group’s and of the parent Company’s affairs as
at 31 December 2021 and of the Group’s profit and parent
Company’s profit for the year then ended;
The Group financial statements have been properly prepared
in accordance with International Financial Reporting Standards
as adopted by the European Union;
The parent Company financial statements have been properly
prepared in accordance with UK accounting standards,
including FRS 101 Reduced Disclosure Framework; and
The financial statements have been prepared in accordance
with the requirements of the Isle of Man Companies Act 2006.
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities are described below. We have fulfilled our
ethical responsibilities under, and are independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical
Standard as required by the Crown Dependencies’ Audit Rules and
Guidance. We believe that the audit evidence we have obtained is
a sufficient and appropriate basis for our opinion.
2 Key audit matters: our assessment of risks of
material misstatement
Key audit matters are those matters that, in our professional
judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. We summarise below the
key audit matters, in decreasing order of audit significance, in
arriving at our audit opinion above, together with our key audit
procedures to address those matters and our findings from those
procedures in order that the Company’s members, as a body, may
better understand the process by which we arrived at our audit
opinion. These matters were addressed, and our findings are based
on procedures undertaken, in the context of, and solely for the
purpose of, our audit of the financial statements as a whole, and
in forming our opinion thereon, and consequently are incidental
to that opinion, and we do not provide a separate opinion on
these matters.
Dynamic Audit planning tool
(Relative significance of audit risks before taking account of control(s)
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Likelihood of material misstatement
High
Key audit matter
Other risks
New risk
Change compared to prior year
A Revenue recognition from
G Acquisition accounting
online operations
B Recoverability of parent
Company’s investments in
subsidiaries and receivables
due from Group entities
(Parent Company only)
C Gaming taxes in
immature markets
H Valuation of the Group’s
Gala Coral defined
benefit pension
I
Revenue recognition
from UK Retail
J Direct taxation
K Share-based payments
D Management override
L Contingent consideration
M Going concern and Long-
Term Viability Statement
of controls
E Disclosure – APMs including
separately disclosed items
F Provisions/contingent
liabilities for litigation
and/or breaches of laws
and regulations
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
146
Independent Auditor’s Report to the members of Entain plc continued
Revenue recognition from online operations
(2021: £3,010.2 million, 2020: £2,680.6 million)
Refer to page 163 (accounting policy) and pages 164 to 166
(financial disclosures).
The risk (Data capture and processing error or fraud – Revenue
from online operations): risk vs 2020 – Revenue streams
are computed and recorded on highly complex IT systems, which
process a high volume of low value transactions with the key
elements being the gaming and betting platforms (“platform”),
customer wallets, the data warehouse, and the financial systems.
Systematic errors in calculations in aggregation could result in
incorrect reporting of revenue.
The Group’s income streams across its online operations are
dependent on their core finance processes and effectiveness of
operational controls to accurately report and reconcile revenue
transactions between the platform, the data warehouse and the
financial systems, and there is a risk that unauthorised changes
could be made in the data warehouse or the financial systems
which may result in the overstatement of revenue.
Our response – Our procedures included:
Data reconciliations: Where GITCs over in-house managed
systems handling the transfer of data are not designed and
implemented effectively, comparing the amounts of revenue in the
accounting records against the amounts reported in the platform
or by third parties (source data), as applicable, for each month and
by label and reconciling the information between systems.
Tests of details (tracing and vouching): We assessed the
appropriateness of revenue recognised by:
Tracing a sample of sporting betting and gaming transactions
through the platform or to third party systems (when
outsourced), and assessing that they are appropriately recorded
within the financial information systems at the transaction level;
Vouching a sample of sporting betting transactions from data
warehouse to the platform to verify correct calculation of the
pay-out based on the stake placed and odds offered on the
individual bet;
Vouching a sample of sporting betting and gaming transactions
from data warehouse to the platform or to third party
systems (when outsourced) and assessing that they are
appropriately recorded;
Control operation: For the Group’s in-house systems we utilised
our own IT specialists to assess the relevant IT systems and
controls by:
Obtaining external confirmation of client funds held in the
payment service providers and reconciling the obtained bank
balance confirmation to the customers’ accounts; and
Performing a substantive analytical procedure over the “Return
to player” ratio.
Assessing transparency: We also considered the adequacy of the
Group’s disclosures in respect of revenue.
Our findings – Our testing identified no material errors in the
recording of revenue transactions for the Online businesses
(2020: no material errors identified).
Testing the functionality of the platform that processes player
activity, customer’s wallets reconciliation and cash movements;
Testing the data flow in the online betting environment by
observing bets placed from the customer-facing systems and
tracing the transactions to the platform, and then from the
data warehouse (storage) to the financial information systems
(accounting records) to assess whether the information is passed
appropriately from one system to another;
Testing the relevant general IT controls (“GITCs”) including
access to programs and data, program change and development
– specifically evaluating account set-up and termination of users,
password restrictions, users with privileged access, program
change and development process controls, and testing whether
any unauthorised changes have been made to the system;
Where GITCs are not operating effectively over in-house
systems handling the transfer of data, testing the operating
effectiveness of compensating manual controls reconciling the
accounting records to the third party systems; and
Assessing the overall IT environment, including relevant IT
security policies and procedures, IT organisational structure,
IT strategy and reporting, disaster recovery and back-up testing.
Entain plc | Annual Report 2021 Financial statements 147
Recoverability of parent Company’s investments in subsidiaries
and receivables due from Group entities (parent Company only):
(2021 carrying value: £5,114.7 million, 2020 carrying value:
£5,018.4 million)
Refer to pages 207 and 209 (Company accounting policy) and
pages 210 to 211 (Company financial disclosures).
The risk (Recoverability of parent Company’s investments
in subsidiaries and receivables due from Group entities):
risk vs 2020 – The carrying amount of the parent Company’s
investments in subsidiaries and of the intra-Group debtor balance
together represents 99% (2020: 99%) of the parent Company’s
total assets. Their recoverability is not at a high risk of significant
misstatement or subject to significant judgement. However, due
to their materiality in the context of the parent Company financial
statements, this is considered to be the area that had the greatest
effect on our overall parent Company audit.
We performed the tests below rather than seeking to rely on any of
the Company’s controls because the nature of the balance is such
that we would expect to obtain audit evidence primarily through
the detailed procedures described.
Our response – Our procedures included:
Benchmarking assumptions: We challenged the assumptions
used in the cash flows included in the budgets based on
our knowledge of the Group and the markets in which the
subsidiaries operate.
Historical comparisons: We assessed the reasonableness
of the budgets by considering the historical accuracy of the
previous forecasts.
Our sector experience: We evaluated the current level of trading,
including identifying any indications of a downturn in activity,
by examining the post year end management accounts and
considering our knowledge of the Group and the market.
Comparing valuations: We compared the carrying value of the
parent Company’s investments in subsidiaries and receivables due
from Group entities to value in use calculations for the relevant
CGUs and to the market capitalisation of the Group.
Assessing transparency: We assessed the adequacy of the parent
Company’s disclosures in respect of investments in subsidiaries and
Group debtor balances.
Our findings – We found the Company’s conclusion that there is
no impairment of investments in subsidiaries and intercompany
receivables to be balanced (2020: balanced).
We continue to perform procedures over gaming taxes in immature
markets. However, following the ruling made by the Administrative
Court of Appeal in Athens in relation to the historic Greek tax case
during the year, we have not assessed this as one of the most
significant risks in our current year audit and, therefore, it is not
separately identified in our report this year.
3 Our application of materiality and an overview of the
scope of our audit
Materiality for the Group financial statements as a whole was
set at £35 million (2020: £20 million), determined with reference
to a benchmark of Group revenue (of which it represents 0.9%
(2020: 0.6%)). The significant increase in materiality primarily
arose due our reassessment of the risk in the business, the growth
in revenue and, the Group’s resilience to the impact of Covid-19.
We consider total revenue to be the most appropriate benchmark
as it provides a more stable measure year on year than Group profit
before tax.
Materiality for the parent Company financial statements as a
whole was set at £17 million (2020: £8 million), determined with
reference to a benchmark of total assets, of which it represents
0.3% (2020: 0.2%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an
acceptable level the risk that individually immaterial misstatements
in individual account balances add up to a material amount across
the financial statements as a whole.
Performance materiality was set at 75% (2020: 75%) of materiality
for the financial statements as a whole, which equates to
£26.25 million (2020: £15 million) for the Group and £12.75 million
(2020: £6 million) for the parent Company. We applied this
percentage in our determination of performance materiality
because we did not identify any factors indicating an elevated
level of risk.
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding £1.8 million
(2020: £1 million), in addition to other identified misstatements
that warranted reporting on qualitative grounds.
Of the Group’s 10 (2020: 10) reporting components, we subjected
three (2020: four) to full scope audits for Group purposes and one
(2020: none) to specified risk-focused audit procedures. The latter
was not financially significant enough to require a full scope audit
for Group purposes, but did present specific individual risks that
needed to be addressed. The decrease in number of components
subject to full scope audits is a result of the Group combining two
components together in the current year.
We subjected one (2020: none) component to specified risk-
focused audit procedures over revenue, cost of sales and
compliance with laws and regulation.
For the residual six components, we performed analysis at an
aggregated Group level to re-examine our assessment that there
were no significant risks of material misstatement within these.
The component materialities ranged from £17 million to £31 million
(2020: £8 million to £14 million), and were determined having
regard to the mix of size and risk profile of the Group across
the components.
The work on all of the components (2020: all of the components),
including the audit of the parent Company, was performed by the
Group team.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 148
Independent Auditor’s Report to the members of Entain plc continued
We were able to rely upon the Group’s internal control over
financial reporting in several areas of our audit, where our controls
testing supported this approach, which enabled us to reduce the
scope of our substantive audit work; in the other areas the scope
of the audit work performed was fully substantive.
The components within the scope of our work accounted for the
percentages illustrated below.
4 The impact of climate change on our audit
In planning our audit, we have considered the potential impact
of climate change on the Group’s business and its financial
statements. Taking into account the nature of the business
operations, the level of headroom on the long term assets and the
solvency of the Group we did not identify any risks that significantly
impact the financial statements of the Group or our audit.
We read the climate related disclosure in the front half of the
annual report and considered consistency with the financial
statements and our audit knowledge.
5 Going concern
The Directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the Group
or the Company or to cease their operations, and as they have
concluded that the Group’s and the Company’s financial position
means that this is realistic. They have also concluded that there
are no material uncertainties that could have cast significant doubt
over their ability to continue as a going concern for at least a year
from the date of approval of the financial statements (“the going
concern period”).
We used our knowledge of the Group, its industry, and the general
economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s and
Company’s financial resources or ability to continue operations
over the going concern period. The risks that we considered most
likely to adversely affect the Group’s and Company’s available
financial resources and metrics relevant to debt covenants over this
period were:
The impact of significant changes in regulation affecting the
Group’s ability to operate in certain territories; and
The impact of a significant business continuity issue affecting
the Group’s operating systems for a significant portion of the
going concern period.
Revenue (%)
EBITDA (pre corporate
costs and bonus) (%)
24
21
25
23
76%
(2020: 79%)
75%
(2020: 77%)
79
76
14
77
61
% coverage full scope 2021
% coverage specified risk
– focussed audit procedures 2021
% coverage full scope 2020
% out of scope 2021
% out of scope 2020
We also considered less predictable but realistic second order
impacts, such as political or policy changes that could affect
demand in the Group’s markets.
We considered whether these risks could plausibly affect the
liquidity or covenant compliance in the going concern period by
comparing severe, but plausible downside scenarios that could
arise from these risks individually and collectively against the level
of available financial resources and covenants indicated by the
Group’s financial forecasts.
We considered whether the going concern disclosure in Note 2 to
the financial statements gives a full and accurate description of
the Directors’ assessment of going concern, including the identified
risks and, dependencies, and related sensitivities.
Our conclusions based on this work:
We consider that the Directors’ use of the going concern basis
of accounting in the preparation of the financial statements
is appropriate;
We have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty related to
events or conditions that, individually or collectively, may cast
significant doubt on the Group’s or Company’s ability to continue
as a going concern for the going concern period; and
We have nothing material to add or draw attention to in relation
to the Directors’ statement in Note 2 to the financial statements
on the use of the going concern basis of accounting with no
material uncertainties that may cast significant doubt over the
Group and Company’s use of that basis for the going concern
period, and we found the going concern disclosure in Note 2 to
be acceptable.
However, as we cannot predict all future events or conditions and
as subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were made,
the above conclusions are not a guarantee that the Group or the
Company will continue in operation.
Profit before tax (%)
Net assets (%)
16
13
9
84%
(2020: 87%)
87
75
3
1
97%
(2020: 99%)
99
97
Entain plc | Annual Report 2021 Financial statements
149
6 Fraud and breaches of laws and regulations
– ability to detect
Identifying and responding to risks of material misstatement
due to fraud.
To identify risks of material misstatement due to fraud (“fraud
risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to
commit fraud. Our risk assessment procedures included:
As the Group is regulated, our assessment of risks involved gaining
an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our
team and remained alert to any indications of non-compliance
throughout the audit.
The potential effect of these laws and regulations on the financial
statements varies considerably.
Enquiring of Directors, and internal audit and inspection of
policy documentation as to the Group’s high-level policies and
procedures to prevent and detect fraud including the internal
audit function, and the Group’s channel for “whistleblowing”, as
well as whether they have knowledge of any actual, suspected
or alleged fraud.
Firstly, the Group is subject to laws and regulations that directly
affect the financial statements including financial reporting
legislation (including related companies legislation), and taxation
legislation and we assessed the extent of compliance with these
laws and regulations as part of our procedures on the related
financial statement items.
Secondly, the Group is subject to many other laws and regulations
where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation or the loss
of the Group’s licence to operate. We identified the following
areas as those most likely to have such an effect: anti-bribery
and corruption, recognising the nature of the Group’s operations,
and responsible gaming legislation across all of the territories
where the Group generates material revenues. Auditing standards
limit the required audit procedures to identify non-compliance
with these laws and regulations to enquiry of the Directors
and other management and inspection of regulatory and legal
correspondence, if any. Therefore if a breach of operational
regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or
breaches of law or regulation.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-
compliance with laws and regulations is from the events and
transactions reflected in the financial statements, the less likely the
inherently limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remained a higher risk of
non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing
non-compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
Reading Board, Audit Committee and Remuneration
Committee minutes.
Considering remuneration incentive schemes and performance
targets for Directors and how these are impacted by separately
disclosed items.
Using analytical procedures to identify any unusual or
unexpected relationships.
Identifying fraud risks, with assistance from our forensic
specialists, based on discussions of the circumstances of
the Group.
We communicated identified fraud risks throughout the audit team
and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, and taking into account
possible pressures to meet profit targets, we perform procedures
to address the risk of management override of controls and the
risk of fraudulent revenue recognition, in particular the risk that
revenue from the Group’s online operations is recorded incorrectly,
that management may be in a position to make inappropriate
accounting entries, and the risk of bias in accounting estimates and
judgements such as accounting for acquisitions and the recognition
of intangible assets, provisions for gaming tax obligations,
provisions for impairment and pension assumptions.
Further detail in respect of online revenue recognition is set out in
the key audit matter disclosure in section 2 of this report.
We also performed procedures including:
Identifying journal entries and other adjustments to test for all
full scope components based on risk criteria and comparing the
identified entries to supporting documentation. These included:
unusual revenue pairings; unusual journals with a credit or debit
to entry to cash; and, unusual journals in seldom used pairings.
Evaluated the business purpose of significant
unusual transactions.
Assessing whether significant accounting estimates are
indicative of a potential bias.
Identifying and responding to risks of material misstatement
related to compliance with laws and regulations.
We identified areas of laws and regulations that could reasonably
be expected to have a material effect on the financial statements
from our general commercial and sector experience and through
discussion with the Directors and other management (as required
by auditing standards), and from inspection of the Group’s
regulatory and legal correspondence and discussed with the
Directors and other management the policies and procedures
regarding compliance with laws and regulations.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 150
Independent Auditor’s Report to the members of Entain plc continued
Our work is limited to assessing these matters in the context of
only the knowledge acquired during our financial statements
audit. As we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent
with judgements that were reasonable at the time they were made,
the absence of anything to report on these statements is not a
guarantee as to the Group’s and Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there
is a material inconsistency between the Directors’ corporate
governance disclosures and the financial statements and our
audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements and
our audit knowledge:
The Directors’ statement that they consider that the annual
report and financial statements taken as a whole is fair, balanced
and understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy;
The section of the annual report describing the work of the
Audit Committee, including the significant issues that the Audit
Committee considered in relation to the financial statements,
and how these issues were addressed; and
The section of the annual report that describes the review of
the effectiveness of the Group’s risk management and internal
control systems.
We are required to review the part of the Corporate Governance
Statement relating to the Group’s compliance with the provisions of
the UK Corporate Governance Code specified by the Listing Rules
for our review. We have nothing to report in this respect.
7 We have nothing to report on the other information
in the Annual Report
The Directors are responsible for the other information presented
in the Annual Report together with the financial statements.
Our opinion on the financial statements does not cover the other
information and, accordingly, we do not express an audit opinion
or, except as explicitly stated below, any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work,
the information therein is materially misstated or inconsistent with
the financial statements or our audit knowledge. Based solely on
that work we have not identified material misstatements in the
other information.
Directors’ remuneration report
In addition to our audit of the financial statements, the Directors
have engaged us to audit the information in the Directors’
Remuneration Report that is described as having been audited,
which the Directors have decided to prepare as if the Company
was required to comply with the requirements of Schedule 8 to The
Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 (SI 2008 No. 410) made under the UK
Companies Act 2006.
In our opinion the part of the Directors’ Remuneration Report to
be audited has been properly prepared in accordance with the
UK Companies Act 2006, as if those requirements applied to
the Company.
Disclosures of emerging and principal risks and longer-
term viability
We are required to perform procedures to identify whether there
is a material inconsistency between the Directors’ disclosures in
respect of emerging and principal risks and the viability statement,
and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or
draw attention to in relation to:
The Directors’ confirmation within the Viability Statement on
page 86 that they have carried out a robust assessment of the
emerging and principal risks facing the Group, including those
that would threaten its business model, future performance,
solvency and liquidity;
The Emerging and Principal Risks disclosures describing these
risks and how emerging risks are identified, and explaining how
they are being managed and mitigated; and
The Directors’ explanation in the Viability Statement of how they
have assessed the prospects of the Group, over what period
they have done so and why they considered that period to be
appropriate, and their statement as to whether they have a
reasonable expectation that the Group will be able to continue in
operation and meet its liabilities as they fall due over the period
of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Based on the above procedures, we have concluded that the above
disclosures are materially consistent with the financial statements
and our audit knowledge.
Entain plc | Annual Report 2021 Financial statements
151
8 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 77,
the Directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and
fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing
the Group and parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern;
and using the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor’s report. Reasonable assurance is a high level
of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities.
9 The purpose of our audit work and to whom we owe
our responsibilities
This report is made solely to the Company’s members, as a body,
in accordance with Section 80 (c) of the Isle of Man Companies
Act 2006 and the terms of our engagement by the Company.
Our audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to
them in an auditor’s report, and the further matters we are required
to state to them in accordance with the terms agreed with the
Company, and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other
than the Company and the Company’s members, as a body, for our
audit work, for this report, or for the opinions we have formed.
Mark Flanagan
Responsible Individual
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants and Recognised Auditors
St Nicholas House
Park Row
Nottingham
NG1 6FQ
3 March 2022
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 152
Consolidated income statement
for the year ended 31 December 2021
2021
2020
Underlying
items
£m
Notes
Separately
disclosed
Items
(note 6)
£m
Total
£m
Underlying
items
£m
Separately
disclosed
items
(note 6)
£m
Net Gaming Revenue
VAT/GST
Revenue
Cost of sales
Gross profit
Administrative costs
Contribution
Administrative costs excluding marketing
5
7
7
3,886.3
(56.3)
3,830.0
(1,394.2)
2,435.8
(1,789.2)
1,851.5
(1,204.9)
Group operating profit/(loss) before share
of results from joint ventures and associates
Share of results from joint ventures and associates
16,17
8
8
8
8
10
21
12
12
Group operating profit/(loss)
Finance expense
Finance income
Gains/(losses) arising from change in fair value
of financial instruments
Gains/(losses) arising from foreign exchange
on debt instruments
Profit/(loss) before tax
Income tax
Profit/(loss) from continuing operations
Loss for the year from discontinued operations
after tax
Profit/(loss) for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Earnings per share on profit for the year
from continuing operations
From profit for the year
Diluted earnings per share on profit for the year
from continuing operations
From profit for the year
Memo
EBITDAR2
Rent and associated costs3
EBITDA
Share based payments
Depreciation, amortisation and impairment
Share of results from joint ventures and associates
Group operating profit/(loss)
646.6
(162.5)
484.1
(77.1)
2.1
62.0
56.2
527.3
(90.1)
437.2
(5.6)
431.6
420.2
11.4
431.6
54.3p1
53.3p1
53.8p1
52.8p1
898.8
(17.1)
881.7
(12.3)
(222.8)
(162.5)
484.1
–
–
–
–
–
(128.3)
–
(128.3)
(128.3)
–
(128.3)
(5.8)
–
–
–
(134.1)
(27.5)
(161.6)
(9.3)
(170.9)
(170.9)
–
(170.9)
19.2
–
19.2
–
(147.5)
–
(128.3)
3,886.3
(56.3)
3,830.0
(1,394.2)
2,435.8
(1,917.5)
1,851.5
(1,333.2)
518.3
(162.5)
355.8
(82.9)
2.1
3,628.5
(66.9)
3,561.6
(1,253.0)
2,308.6
(1,718.9)
1,740.2
(1,150.5)
589.7
(60.2)
529.5
(76.5)
2.3
62.0
(61.8)
(42.9)
350.6
(63.0)
287.6
(14.4)
273.2
251.6
21.6
273.2
63.5p
61.0p
62.8p
60.4p
862.1
(19.0)
843.1
(14.8)
56.2
393.2
(117.6)
275.6
(14.9)
260.7
249.3
11.4
260.7
45.1p
42.6p
44.7p
42.2p
918.0
(17.1)
900.9
(12.3)
(370.3)
(162.5)
355.8
–
–
–
–
–
(170.6)
–
(170.6)
(170.6)
–
(170.6)
(5.3)
–
–
–
(175.9)
2.1
(173.8)
(20.0)
(193.8)
(193.8)
–
(193.8)
Total
£m
3,628.5
(66.9)
3,561.6
(1,253.0)
2,308.6
(1,889.5)
1,740.2
(1,321.1)
419.1
(60.2)
358.9
(81.8)
2.3
(61.8)
(42.9)
174.7
(60.9)
113.8
(34.4)
79.4
57.8
21.6
79.4
15.8p
9.9p
15.6p
9.8p
141.4
1,003.5
–
141.4
–
(19.0)
984.5
(14.8)
(238.6)
(312.0)
(550.6)
(60.2)
529.5
–
(170.6)
(60.2)
358.9
1. The calculation of underlying earnings per share has been adjusted for separately disclosed items, and for the removal of foreign exchange volatility arising on financial
instruments as it provides a better understanding of the underlying performance of the Group. See note 12 for further details.
2. Included within the Income Statement and Memo above are certain non-statutory measures. The use of these items and the reconciliation to their statutory equivalents
is provided above and on page 66 of the report.
3. Rent and associated costs include VAT and rent not captured by IFRS 16. These are predominantly driven by VAT on rental charges not being recoverable and held over leases.
The notes on pages 157 to 203 form an integral part of these consolidated financial statements.
Entain plc | Annual Report 2021 Financial statements Consolidated statement of comprehensive income
for the year ended 31 December 2021
Profit for the year
Other comprehensive (expense)/income:
Items that may be reclassified to profit or loss:
Currency differences on translation of foreign operations
Total items that may be reclassified to profit or loss
Items that will not be reclassified to profit or loss:
Re-measurement of defined benefit pension scheme
Tax on re-measurement of defined benefit pension scheme
Share of associate other comprehensive (expense)/income
Total items that will not be reclassified to profit or loss
Other comprehensive (expense)/income for the year, net of tax
Total comprehensive income for the year
Attributable to:
Equity holders of the parent:
Non-controlling interests
The notes on pages 157 to 203 form an integral part of these consolidated financial statements.
153
Notes
2021
£m
260.7
2020
£m
79.4
30
10
17
(128.3)
(128.3)
137.7
137.7
31.2
(10.9)
–
20.3
(108.0)
152.7
141.3
11.4
(0.2)
0.1
0.3
0.2
137.9
217.3
195.7
21.6
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 154
Consolidated balance sheet
At 31 December 2021
Assets
Non-current assets
Goodwill
Intangible assets
Property, plant and equipment
Interest in joint venture
Interest in associates and other investments
Trade and other receivables
Other financial assets
Deferred tax assets
Retirement benefit asset
Current assets
Trade and other receivables
Income and other taxes recoverable
Derivative financial instruments
Cash and cash equivalents
Assets in disposal group classified as held for sale
Total assets
Liabilities
Current liabilities
Trade and other payables
Balances with customers
Lease liabilities
Interest bearing loans and borrowings
Corporate tax liabilities
Provisions
Derivative financial instruments
Other financial liabilities
Non-current liabilities
Interest bearing loans and borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Other financial liabilities
Liabilities in disposal group classified as held for sale
Total liabilities
Net assets
Equity
Issued share capital
Share Premium
Merger Reserve
Translation reserve
Retained earnings
Equity shareholders’ funds
Non-controlling interests
Total shareholders’ equity
(Company number 4685V)
Notes
2021
£m
2020
£m
13
13
15
16
17
18
26
10
30
18
26
19
21
20
27
22
23
24
26
26
23
22
10
24
26
21
28
35
3,217.0
2,152.5
467.2
9.7
58.4
3.0
0.3
141.4
95.1
6,144.6
539.8
23.1
57.4
487.1
1,107.4
–
7,252.0
(695.8)
(205.9)
(78.2)
(121.1)
(59.1)
(43.5)
–
(36.1)
3,061.1
2,105.4
470.2
6.2
29.4
3.8
4.4
129.8
64.2
5,874.5
475.8
13.6
–
706.7
1,196.1
199.1
7,269.7
(687.4)
(241.1)
(89.8)
(14.1)
(66.4)
(49.4)
(26.1)
(147.5)
(1,239.7)
(1,321.8)
(2,161.3)
(215.5)
(408.0)
(6.4)
(52.6)
(2,843.8)
–
(2,085.7)
(248.2)
(331.7)
(19.5)
(9.3)
(2,694.4)
(172.0)
(4,083.5)
(4,188.2)
3,168.5
3,081.5
4.8
1,207.3
2,527.4
63.4
(635.8)
3,167.1
1.4
4.8
1,206.6
2,527.4
191.7
(901.3)
3,029.2
52.3
3,168.5
3,081.5
The financial statements on pages 152 to 203 were approved by the Board of Directors on 3 March 2022 and signed on its behalf by
J Nygaard-Andersen
Chief Executive Officer
R Wood
Deputy Chief Executive Officer/Chief Financial Officer
Entain plc | Annual Report 2021 Financial statements 155
Consolidated statement of changes in equity
for the year ended 31 December 2021
Issued
share
capital
£m
Share
premium
£m
Merger
Reserve
£m
Translation
reserve1
£m
At 1 January 2020
4.8
1,198.0
2,527.4
Profit for the year
Other comprehensive income
Total comprehensive income
Share options exercised
Share-based payments charge
Equity dividends (note 11)
–
–
–
–
–
–
–
–
–
8.6
–
–
–
–
–
–
–
–
At 31 December 2020
4.8
1,206.6
2,527.4
At 1 January 2021
4.8
1,206.6
2,527.4
Profit for the year
Other comprehensive income
Total comprehensive income
Share options exercised
Share-based payments charge
Business combinations (note 32)
Purchase of non-controlling
interests (note 35)
Equity dividends (note 11)
–
–
–
–
–
–
–
–
–
–
–
0.7
–
–
–
–
–
–
–
–
–
–
–
–
54.0
–
137.7
137.7
–
–
–
191.7
191.7
–
(128.3)
(128.3)
–
–
–
–
–
Retained
earnings
£m
Equity
shareholders’
funds
£m
(971.4)
2,812.8
57.8
0.2
58.0
–
12.1
–
57.8
137.9
195.7
8.6
12.1
–
(901.3)
3,029.2
(901.3)
3,029.2
249.3
20.3
269.6
–
6.9
(50.0)
39.0
–
249.3
(108.0)
141.3
0.7
6.9
(50.0)
39.0
–
At 31 December 2021
4.8
1,207.3
2,527.4
63.4
(635.8)
3,167.1
Non-
controlling
Interests
(note 35)
£m
43.1
21.6
–
21.6
–
–
(12.4)
52.3
52.3
11.4
–
11.4
–
–
14.2
(52.0)
(24.5)
1.4
Total
Shareholders’
equity
£m
2,855.9
79.4
137.9
217.3
8.6
12.1
(12.4)
3,081.5
3,081.5
260.7
(108.0)
152.7
0.7
6.9
(35.8)
(13.0)
(24.5)
3,168.5
1. The translation reserve is used to record exchange differences arising from the translation of the financial statements of subsidiaries with non-Sterling functional currencies.
The notes on pages 157 to 203 form an integral part of these consolidated financial statements.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
156
Consolidated statement of cash flows
for the year ended 31 December 2021
Cash generated by operations
Income taxes paid
Net finance expense paid
Net cash generated from operating activities
Cash flows from investing activities:
Acquisitions
Cash acquired on business combinations
Cash disposed on sale of business
Purchase of intangible assets
Purchase of property, plant and equipment
Proceeds from the sale of property, plant and equipment including disposal of shops
Purchase of investments in associates and other investments
Investment in joint ventures
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from issue of ordinary shares
Net proceeds from borrowings
Repayment of borrowings
Settlement of derivative financial instruments and other financial liabilities
Payment of lease liabilities
Equity dividends paid1
Net cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Effect of changes in foreign exchange rates
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year2
Notes
29
2021
£m
803.8
(98.7)
(73.3)
631.8
(449.8)
22.3
(53.7)
(106.4)
(69.8)
1.9
(29.4)
(164.4)
(849.3)
0.7
797.2
(566.1)
(149.8)
(87.9)
(24.5)
(30.4)
(247.9)
(14.8)
749.8
487.1
2020
£m
864.8
(59.2)
(95.3)
710.3
–
–
–
(101.6)
(62.6)
6.9
–
(61.8)
(219.1)
8.6
–
(43.5)
(11.3)
(85.9)
(12.4)
(144.5)
346.7
13.0
390.1
749.8
1. Equity dividends paid represent dividends paid to non-controlling interests of £24.5m (2020: £12.4m).
2. Cash and cash equivalents at the beginning of the year include £43.1m of cash within assets in disposal group classified as held for sale.
The notes on pages 157 to 203 form an integral part of these consolidated financial statements.
Entain plc | Annual Report 2021 Financial statements 157
Notes to the consolidated financial statements
for the year ended 31 December 2021
1 Corporate information
Entain PLC (“the Company”) is a company incorporated and domiciled in the Isle of Man on 5 January 2010 whose shares are traded
publicly on the London Stock Exchange. The principal activities of the Company and its subsidiaries (“the Group”) are described in the
strategic report. The consolidated financial statements of the Group for the year ended 31 December 2021 were authorised for issue in
accordance with a resolution of the Directors on 3 March 2022.
The nature of the Group’s operations and its principal activities are set out in note 5.
2 Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union and with the Isle of Man Companies Act 2006
applicable to companies reporting under IFRSs. The accounting policies set out in this section as detailed have been applied consistently
year on year other than for the changes in accounting policies set out in note 3.
Going concern
The Group financial statements are prepared under the historical cost convention unless otherwise stated. In adopting the going concern
basis of preparation in the financial statements, the Directors have considered the current trading performance of the Group, the financial
forecasts and the principal risks and uncertainties, including the ongoing impact of Covid-19. In addition, the Directors have considered
all matters discussed in connection with the long-term viability statement including the modelling of “severe but plausible” downside
scenarios such as legislation changes impacting the Group’s Online business and new lockdowns affecting the Group’s Retail operations.
Despite the net current liability position, the level of the Group’s available cash (c£400m), available financing facilities (including an
undrawn revolving credit facility of c£500m) and the forecast covenant headroom even under the sensitised downside scenarios,
the Directors believe that the Group is well placed to manage the risks and uncertainties that it faces. As such, the Directors have a
reasonable expectation that the Group will have adequate financial resources to continue in operational existence and have, therefore,
considered it appropriate to adopt the going concern basis of preparation in the financial statements.
The consolidated financial statements are presented in Pounds Sterling (£). All values are in millions (£m) rounded to one decimal place
except where otherwise indicated. The separately disclosed items have been included within the appropriate classifications in the
consolidated income statement. Further details are given in note 6.
3 Changes in accounting policies
From 1 January 2021 the Group has not been required to adopt, for the first time, any new standards, interpretations, or amendments as
there have been no new issues effective in the reporting year.
4 Summary of significant accounting policies
4.1 Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group at 31 December each year. The consolidation
has been performed using the results to 31 December for all subsidiaries, using consistent accounting policies. With the exception of a
small number of immaterial subsidiaries, the financial statements of those subsidiaries are prepared to 31 December. Control is achieved
where the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect these
returns through its power over the investee.
All intragroup transactions, balances, income and expenses are eliminated on consolidation.
Subsidiaries are consolidated, using the acquisition method of accounting, from the date on which control is transferred to the Group
and cease to be consolidated from the date on which control is transferred from the Group. On acquisition, the assets and liabilities and
contingent liabilities of a subsidiary are measured at fair value at the date of acquisition. Any excess of the cost of acquisition over the
fair values of the separately identifiable net assets acquired is recognised as goodwill. Where necessary, adjustments are made to the
financial statements of subsidiaries to bring the accounting policies used in line with those used by the Group.
4.2 Critical accounting estimates and judgements
The preparation of financial information requires the use of assumptions, estimates and judgements about future conditions. Use of
available information and application of judgement are inherent in the formation of estimates. Actual results in the future may differ from
those reported.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 158
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
4 Summary of significant accounting policies (continued)
4.2 Critical accounting estimates and judgements (continued)
Judgements
Management believes that the areas where judgement has been applied are:
– accounting for uncertain tax positions (note 18); and
– separately disclosed items (note 6).
Accounting for uncertain tax positions
The Group is subject to various forms of tax in a number of jurisdictions. Given the nature of the industry within which the Group operates,
the tax and regulatory regimes are continuously changing and, as such, the Group is exposed to a small number of uncertain tax
positions. Judgement is applied in or order to adequately provide for uncertain tax positions where it is believed that it is more likely than
not that an economic outflow will arise. In particular, during 2021 judgement has been applied in the Group’s accounting for Greek tax
and further disclosure is given in note 18.
Separately disclosed items
To assist in understanding the underlying performance of the Group, management applies judgement to identify those items that are
deemed to warrant separate disclosure due to either their nature or size. Whilst not limited to, the following items of pre-tax income and
expense are generally disclosed separately:
– amortisation of acquired intangibles resulting from IFRS 3 “Business Combinations” fair value exercises;
– profits or losses on disposal, closure, or impairment of non-current assets or businesses;
– corporate transaction and restructuring costs;
– legal, regulatory and tax litigation;
– changes in the fair value of contingent consideration; and
– the related tax effect of these items.
Any other non-recurring items are considered individually for classification as separately disclosed by virtue of their nature or size.
During 2021 the Group separately disclosed a net charge on continuing operations of £134.1m including £144.2m of amortisation of
acquired intangibles resulting from IFRS 3.
The separate disclosure of these items allows a clearer understanding of the trading performance on a consistent and comparable basis,
together with an understanding of the effect of non-recurring or large individual transactions upon the overall profitability of the Group.
The separately disclosed items have been included within the appropriate classifications in the consolidated income statement.
Further details are given in note 6.
Estimates
Management believes that the area where significant estimates have been made within the financial statement are:
– accounting for business combinations (note 32).
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised.
Further information about key assumptions concerning the future and other key sources of estimation uncertainty are set out below;
Business combinations
For business combinations, the Group estimates the fair value of the consideration transferred, which can include assumptions
about the future business performance of the business acquired and an appropriate discount rate to determine the fair value of any
contingent consideration.
The Group then estimates the fair value of assets acquired and liabilities assumed in the business combination, including any separately
identifiable intangible assets. These estimates also require inputs and assumptions including future earnings, customer attrition
rates and discount rates. The Group engages external experts to support the valuation process, where appropriate. IFRS 3 “Business
Combinations” allows the Group to recognise provisional fair values if the initial accounting for the business combination is incomplete.
The fair value of contingent consideration recognised in business combinations is reassessed at each reporting date, using updated
inputs and assumptions based on the latest financial forecasts for the relevant business. Fair value movements and the unwinding of the
discounting is recognised within the income statement as a separately disclosed item. See note 6 and note 32 for further details.
Entain plc | Annual Report 2021 Financial statements 159
4 Summary of significant accounting policies (continued)
4.2 Critical accounting estimates and judgements (continued)
Goodwill on acquisition is initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in
the net fair value of the separately identifiable assets, liabilities and contingent liabilities at the date of acquisition. In accordance with
IFRS 3 Business Combinations, goodwill is not amortised but reviewed for impairment at the first reporting period after acquisition and
then annually thereafter. As such it is stated at cost less any provision for impairment of value. Any impairment is recognised immediately
in the consolidated income statement and is not subsequently reversed.
On acquisition, any goodwill acquired is allocated to cash generating units for the purpose of impairment testing. Where goodwill forms
part of a cash generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposal is
included in the carrying amount of the assets when determining the gain or loss on disposal.
4.3 Other accounting policies
Intangible assets
Intangible assets acquired separately are capitalised at cost and those acquired as part of a business combination are capitalised
separately from goodwill if the fair value can be measured reliably on initial recognition. The costs relating to internally generated
intangible assets, principally software costs, are capitalised if the criteria for recognition as assets are met. Other expenditure is charged
in the year in which the expenditure is incurred. Following initial recognition, intangible assets are carried at cost less any accumulated
amortisation and any accumulated impairment losses.
The useful lives of these intangible assets are assessed to be either finite or indefinite. All indefinite lived assets are subject to an annual
impairment review from the year of acquisition. Where amortisation is charged on assets with finite lives, this expense is taken to the
consolidated income statement through the “operating expenses, depreciation and amortisation” line item. Useful lives are reviewed on
an annual basis.
A summary of the policies applied to the Group’s intangible assets is as follows:
Retail licences
Software - purchased & internally capitalised costs
Trademarks & brand names
Customer relationships
Lower of 15 years, or duration of licence
2-15 years
10-15 years, or indefinite life
3-15 years
The useful lives of all intangible assets are reviewed at each financial period end. Impairment testing is performed annually for intangible
assets which are not subject to systematic amortisation and where an indicator of impairment exists for all other intangible assets.
An intangible asset is derecognised on disposal, with any gain or loss arising (calculated as the difference between the net disposal
proceeds and the carrying amount of the item) included in the consolidated income statement in the year of disposal.
Pensions and other post-employment benefits
The Group’s defined benefit pension plans, the Ladbrokes Pension Plan and the Gala Coral Pension Plan hold assets separately from the
Group. The pension cost relating to both plans are assessed in accordance with the advice of independent qualified actuaries using the
projected unit credit method.
Actuarial gains or losses are recognised in the consolidated statement of comprehensive income in the period in which they arise.
Any past service cost is recognised immediately. The retirement benefit asset recognised in the balance sheet represents the fair value of
scheme assets less the value of the defined benefit obligations.
In accounting for the Group’s defined benefit pension plans, it is necessary for management to make a number of estimates and
assumptions each year. These include the discount rates, inflation rates and life expectancy. In making these estimates and assumptions,
management considers advice provided by external advisers, such as actuaries. Where actual experience differs to these estimates,
actuarial gains and losses are recognised directly in other comprehensive income. Refer to note 30 for details of the values of assets and
obligations and key assumptions used. Although the Group anticipates that plan surpluses will be utilised during the life of the plans to
address member benefits, the Group recognises its pension surplus in full on the basis that it does not consider there to be substantive
restrictions on the return of residual plan assets in the event of a winding up of the plans after all member obligations have been met.
The Group’s contributions to defined contribution schemes are charged to the consolidated income statement in the period to which the
contributions relate.
There is a degree of estimation involved in predicting the ultimate benefits payable under defined benefit pension arrangements.
The pension scheme liabilities are determined using actuarial valuations. The actuarial valuation involves making assumptions about
discount rates, mortality rates and future pension increases. Due to the long-term nature of these plans, such estimates are subject to
uncertainty. See note 30 for details on sensitivity analysis performed around these estimates.
The Group’s defined benefit pension schemes both have a net asset position when measured on an IAS 19 basis. Judgement is applied,
based on legal, actuarial, and accounting guidance in IFRIC 14, regarding the amounts of net pension asset that is recognised in the
consolidated balance sheet. Further details are given in note 30.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 160
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
Impairment
On acquisition, any goodwill acquired is allocated to cash generating units for the purpose of impairment testing. Where goodwill forms
part of a cash generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposal is
included in the carrying amount of the assets when determining the gain or loss on disposal.
An impairment review is performed for goodwill and other indefinite life assets on at least an annual basis. For all other non-current
assets an impairment review is performed where there are indicators of impairment. This requires an estimation of the recoverable
amount which is the higher of an asset’s fair value less costs to sell and its value in use. Estimating a value in use amount requires
management to make an estimate of the expected future cash flows from each cash generating unit and to discount cash flows by a
suitable discount rate in order to calculate the present value of those cash flows. Estimating an asset’s fair value less costs to sell is
determined using future cashflow and profit projections as well as industry observed multiples and publicly observed share prices for
similar gambling companies. See note 14 for details on sensitivity analysis performed around these estimates.
Within UK and European Retail, the cash generating units are generally an individual Licensed Betting Office (“LBO”) and therefore,
impairment is first assessed at this level for licences, right of use (“ROU”) assets and property, plant and equipment, with any impairment
arising booked to licences and property, plant and equipment on a pro-rata basis.
Impairment losses are recognised in the consolidated income statement.
Investments in joint ventures
A joint venture is an entity in which the Group holds an interest on a long-term basis, and which is jointly controlled by the Group and one
or more other venturers under a contractual agreement.
Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties that collectively control
the arrangement.
The Group’s share of results of joint ventures is included in the Group consolidated income statement using the equity method of
accounting. Investments in joint ventures are carried in the Group consolidated balance sheet at cost plus post-acquisition changes in
the Group’s share of net assets of the entity less any impairment in value. The carrying value of investments in joint ventures includes
acquired goodwill.
If the Group’s share of losses in the joint venture equals or exceeds its investment in the joint venture, the Group does not recognise further
losses, unless it has obligations to continue to provide financial support to the joint venture.
Investments in associates
Associates are those businesses in which the Group has a long-term interest and is able to exercise significant influence over the financial
and operational policies but does not have control or joint control over those policies.
The Group’s share of results of associates is included in the Group’s consolidated income statement using the equity method of
accounting. Investments in associates are carried in the Group’s consolidated balance sheet at cost plus post-acquisition changes in the
Group’s share of net assets of the entity less any impairment in value. The carrying value of investments in associates includes acquired
goodwill. If the Group’s share of losses in the associate equals or exceed its investments in the associate, the Group does not recognise
further losses, unless it has obligations to continue to provide financial support to the associate.
Property, plant and equipment
Land is stated at cost less any impairment in value.
Buildings, plant and equipment are stated at cost less accumulated depreciation and any impairment in value.
Depreciation is applied using the straight-line method to specific classes of asset to reduce them to their residual value over their
estimated useful economic lives.
Land and buildings
Plant and equipment
Fixtures and fittings
Lower of 50 years, or estimated useful life of the building, or lease. Indefinite lives
are attached to any freehold land held and therefore it is not depreciated
3-5 years
3-10 years
Right of Use (“ROU”) assets arising under lease contracts are depreciated over the lease term (as defined in IFRS 16) being the period
to the expiry date of the lease, unless it is expected that a break clause will be exercised when the lease term is the period to the date of
the break.
The carrying values of property, plant and equipment are reviewed for impairment where an indicator of impairment exists as to whether
there are events or changes in circumstances indicating that the carrying values may not be recoverable. If any such indication exists
and where the carrying values exceed the estimated recoverable amount, the assets or cash generating units are written down to their
recoverable amount.
Entain plc | Annual Report 2021 Financial statements 161
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
The recoverable amount of property, plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash
inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.
An item of property, plant and equipment is derecognised upon disposal, with any gain or loss arising (calculated as the difference
between the net disposal proceeds and the carrying amount of the item) included in the consolidated income statement in the year
of disposal.
Leases
The Group has applied IFRS 16 only to those contracts that were previously identified as a lease under IAS 17 Leases, any contracts not
previously identified as leases have not been reassessed for the purposes of adopting IFRS 16. Accordingly, the definition of a lease under
IFRS 16 has only been applied to contracts entered into on or after 1 January 2019.
Leases, other than those with a lease period of less than one year at inception, or where the original cost of the asset acquired would be a
negligible amount (see note 22), are capitalised at the inception at the present value of the minimum lease payments. Lease payments are
apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly against income.
ROU assets are included within property, plant and equipment at cost and depreciated over their estimated useful lives, which normally
equates to the lives of the leases, after considering anticipated residual values.
ROU assets which are sub-leased to customers are classified as finance leases if the lease agreements transfer substantially all the risks
and rewards of usage to the lessee. All other sub-leases are classified as operating leases. When assets are subject to finance leases, the
present value of the sub-lease is recognised as a receivable, net of allowances for expected credit losses and the related ROU asset is de-
recognised. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance lease
income. Finance lease interest income is recognised over the term of the lease using the net investment method (before tax) so as to give
a constant rate of return on the net investment in sub-leases. Operating lease rental income is recognised on a straight-line basis over the
life of the lease.
Cash and cash equivalents
Cash and cash equivalents consist of cash at bank and in hand, short-term deposits with an original maturity of less than three months
(and customer balances).
Financial assets
Financial assets are recognised when the Group becomes party to the contracts that give rise to them. The Group classifies financial
assets at inception as financial assets at amortised cost, financial assets at fair value through profit or loss or financial assets at fair value
through other comprehensive income.
Financial assets at amortised cost are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. On initial recognition, financial assets at amortised cost are measured at fair value net of transaction costs.
Trade receivables are generally accounted for at amortised cost. Expected credit losses are recognised for financial assets recorded at
amortised cost, including trade receivables. Expected credit losses are calculated by using an appropriate probability of default, taking
accounts of a range of possible future scenarios and applying this to the estimated exposure of the Group at the point of default.
Financial assets at fair value through profit or loss include derivative financial instruments. Financial assets through profit or loss are
measured initially at fair value with transaction costs taken directly to the consolidated income statement. Subsequently, the fair values
are remeasured, and gains and losses are recognised in the consolidated income statement.
Financial assets at fair value through other comprehensive income comprise equity investments that are designated as such on
acquisition. These investments are measured initially at fair value. Subsequently, the fair values are remeasured, and gains and losses are
recognised in the consolidated statement of comprehensive income.
Financial liabilities
Financial liabilities comprise trade and other payables, interest bearing loans and borrowings, contingent consideration, ante-post bets,
guarantees and derivative financial instruments. On initial recognition, financial liabilities are measured at fair value net of transaction
costs where they are not categorised as financial liabilities at fair value. Financial liabilities measured at fair value include contingent
consideration, derivative financial instruments, ante-post bets and guarantees.
Financial liabilities at fair value are measured initially at fair value, with transaction costs taken directly to the consolidated income
statement. Subsequently, the fair values are remeasured and gains and losses from changes therein are recognised in the consolidated
income statement.
Trade and other payables are held at amortised cost and include amounts due to clients representing customer deposits and winnings,
which is matched by an equal and opposite amount within cash and cash equivalents.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 162
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
All interest-bearing loans and borrowings are initially recognised at fair value net of issue costs associated with the borrowing.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest
rate method.
Derecognition of financial assets and liabilities
Financial assets are derecognised when the right to receive cash flows from the assets has expired or when the Group has transferred
its contractual right to receive the cash flows from the financial assets or has assumed an obligation to pay the received cash flows in full
without material delay to a third party, and either:
– substantially all the risks and rewards of ownership have been transferred; or
– substantially all the risks and rewards have neither been retained nor transferred but control is not retained.
Financial liabilities are derecognised when the obligation is discharged, cancelled or expires.
Derivative financial instruments
The Group uses derivative financial instruments such as cross currency swaps, foreign exchange swaps and interest rate swaps, to
hedge its risks associated with interest rate and foreign currency fluctuations. Derivative financial instruments are recognised initially and
subsequently at fair value. The gains or losses on remeasurement are taken to the consolidated income statement.
Derivative financial instruments are classified as assets where their fair value is positive, or as liabilities where their fair value is negative.
Derivative assets and liabilities arising from different transactions are only offset if the transactions are with the same counterparty, a
legal right of offset exists, and the parties intend to settle the cash flows on a net basis.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that
an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
Provisions are measured at the Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date and
are discounted to present value where the effect is material using a pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance expense.
Foreign currency translation
The presentational currency of Entain PLC and the functional currencies of its UK subsidiaries are Pounds Sterling (£).
Other than Sterling the main functional currencies of subsidiaries are the Euro (€), the US Dollar ($) and the Australian Dollar (A$). At the
reporting date, the assets and liabilities of non-Sterling subsidiaries are translated into Pounds Sterling (£) at the rate of exchange
ruling at the balance sheet date and their cash-flows are translated at the weighted average exchange rates for the year. The post-tax
exchange differences arising on the retranslation are taken directly to other comprehensive income.
Transactions in foreign currencies are initially recorded in the subsidiary’s functional currency and translated at the foreign currency rate
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the foreign
currency rate of exchange ruling at the balance sheet date.
All foreign currency translation differences are taken to the consolidated income statement. Non-monetary items that are measured
at historical cost in a foreign currency are translated using the exchange rate at the date of the initial transaction. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined.
On disposal of a foreign entity, the deferred cumulative retranslation differences previously recognised in equity relating to that particular
foreign entity are recognised in the consolidated income statement as part of the profit or loss on disposal.
The following exchange rates were used in 2021 and 2020:
Currency
Euro (€)
US Dollar ($)
Australian Dollar (A$)
Income tax
2021
2020
Average
Year end
Average
Year end
1.159
1.375
1.832
1.190
1.354
1.862
1.131
1.286
1.876
1.112
1.365
1.765
Deferred tax is provided on all temporary differences at the balance sheet date, between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes except:
– on the initial recognition of goodwill;
– where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor the tax profit; and
– associated with investments in subsidiaries, joint ventures and associates, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Entain plc | Annual Report 2021 Financial statements 163
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
Deferred tax assets are recognised for all deductible temporary differences and carry forward of unused tax assets and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and carry
forward of unused tax assets and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or
the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Deferred tax balances are not discounted.
Interest or penalties payable and receivable in relation to income tax are recognised as an income tax expense or credit in the
consolidated income statement.
Income tax expenses are recognised within profit and loss except to the extent that it relates to items recognised in other comprehensive
income or directly in equity, in which case it is recognised in other comprehensive income or directly in equity.
Revenues, expenses and assets are recognised net of the amount of sales tax except:
– where the sales tax incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the
sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
– receivables and payables are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
consolidated balance sheet.
Equity instruments and dividends
Equity instruments issued by the Company are recorded at the fair value of proceeds received net of direct issue costs.
Final dividends proposed by the Board of Directors and unpaid at the year end are not recognised in the financial statements until they
have been approved by shareholders at the Annual General Meeting. Interim dividends are recognised when paid.
Revenue
The Group reports the gains and losses on all betting and gaming activities as revenue, which is measured at the fair value of the
consideration received or receivable from customers less free bets, promotions, bonuses and other fair value adjustments. Revenue is net
of VAT/GST. The Group considers betting and gaming revenue to be out of the scope of IFRS 15 Revenue, and accounts for those revenues
within the scope of IFRS 9 Financial Instruments.
For licensed betting offices (LBOs), on course betting, Core Telephone Betting, mobile betting, Digital businesses (including sportsbook,
betting exchange, casino, games, other number bets), revenue represents gains and losses, being the amounts staked and fees received,
less total payouts recognised on the settlement of the event. Open betting positions (“Ante-post”) are carried at fair value and gains and
losses arising on these positions are recognised in revenue. See note 26 for details of ante-post positions at the year end.
The following forms of revenue are accounted for within the scope of IFRS 15 Revenue. Revenue from the online poker business reflects
the net income (rake) earned from poker hands completed by the year end. In the case of the greyhound stadia, revenue represents
income arising from the operation of the greyhound stadia in the year, including sales of refreshments, net of VAT. Given the nature of
these revenue streams they are not considered to be subject to judgement over the performance obligations, amount received or timing
of recognition.
Government assistance
Receipts from government assistance programs such as, furlough, are recorded as reductions in the costs against which they have been
received. See note 7 for more details.
Finance expense and income
Finance expense and income arising on interest bearing financial instruments carried at amortised cost are recognised in the consolidated
income statement using the effective interest rate method. Finance expense includes the amortisation of fees that are an integral part
of the effective finance cost of a financial instrument, including issue costs, and the amortisation of any other differences between the
amount initially recognised and the redemption price. All finance expenses are recognised over the availability period.
Share-based payment transactions
Certain employees (including Directors) of the Group receive remuneration in the form of equity settled share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (equity settled transactions).
The cost of equity settled transactions is measured by reference to the fair value at the date on which they are granted. Further details
of which are given in note 31. In valuing equity settled transactions, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of Entain PLC (market conditions).
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 164
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
The cost of equity settled transactions is recognised in the consolidated income statement, with a corresponding credit in equity, over
the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to
the award (vesting date). The cumulative expense recognised for equity settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the number of awards that, in the opinion of the Directors of the Group at
that date, based on the best available estimate of the number of equity instruments, will ultimately vest.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition,
which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance
conditions are satisfied.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share as shown in
note 12.
4.4 Future accounting developments
The standards and interpretations that are issued, but not yet effective, excluding those relating to annual improvements, up to the date
of issuance of the Group’s financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they
become effective. None of these are expected to have a significant effect on the consolidated financial statements of the Group as set
out below:
IAS 1 Presentation of Financial Statements Amendments to the classification of liabilities as current or non-current
1 January 2023
Amendments to IAS1 Presentation of Financial Statements and IFRS
Practice Statement 2 Making Materiality Judgments
IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors
Amendments to clarify between changes in accounting estimates
and changes in accounting policies
IAS 12 Income Taxes
Amendments to the measurement techniques for current
and deferred taxes
IAS 16 Property, Plant and Equipment
Amendments to the definition of sales proceeds and related costs
IAS 37 Provisions, Contingent Liabilities
Amendments to the definition of costs to fulfil an onerous contract
1 January 2023
1 January 2023
1 January 2022
1 January 2022
and Contingent Assets
IAS 41 Agriculture
Amendments to the measurement techniques for biological assets
1 January 2022
IFRS 3 Business Combinations
Updating a reference to the Conceptual Framework
IFRS 17 Insurance Contracts
Original issue
1 January 2022
1 January 2023
5 Segment information
The Group’s operating segments are based on the reports reviewed by the Executive management team (which is collectively considered
to be the Chief Operating Decision Maker (CODM)) to make strategic decisions, and allocate resources.
IFRS 8 requires segment information to be presented on the same basis as that used by the CODM for assessing performance and
allocating resources. The Group’s operating segments are now aggregated into the five reportable segments as detailed below.
This represents a change from 2020 with our former UK and European Retail segments now combined to form one Retail segment and
a New Opportunities segment created to reflect the investment strategy in innovation and new products and verticals as previously
communicated. Both changes are in line with the changes in the Group’s reporting to the executive management team (CODM), with the
Retail consolidation also a product of our Retail segment displaying consistent trading patterns and risk profiles across territories and all
geographies now reporting into the Deputy Chief Executive Officer/Chief Financial Officer.
– Online: comprises betting and gaming activities from online and mobile operations. Sports Brands include bwin, Coral, Crystalbet,
Eurobet, Ladbrokes and Sportingbet; Gaming Brands include CasinoClub, Foxy Bingo, Gala, Gioco Digitale, partypoker and
PartyCasino, Optibet and Ninja;
– Retail: comprises betting and retail activities in the shop estates in Great Britain, Northern Ireland, Jersey, Republic of Ireland,
Belgium and Italy;
– New opportunities: Unikrn and innovation spend;
– Corporate: includes costs associated with Group functions including Group executive, legal, Group finance, US joint venture, tax and
treasury; and
– Other segments: includes activities primarily related to telephone betting, Stadia and on course pitches.
The Executive management team of the Group has chosen to assess the performance of operating segments based on a measure of net
revenue, EBITDAR, EBITDA, and operating profit with finance costs and taxation considered for the Group as a whole. See page 66 of this
annual report for further considerations of the use of Non-GAAP measures. Transfer prices between operating segments are on an arm’s-
length basis in a manner similar to transactions with third parties.
Entain plc | Annual Report 2021 Financial statements 5 Segment information (continued)
The segment results for the year ended 31 December were as follows:
All other
segments
£m
New
Opportunities
£m
Corporate
£m
Online
£m
3,066.5
(56.3)
3,010.2
1,871.5
1,294.7
Retail
£m
791.1
–
791.1
535.8
529.0
32.8
–
32.8
28.5
27.8
(393.7)
(447.5)
(22.1)
901.0
(2.0)
899.0
(5.3)
(116.7)
81.5
(14.6)
66.9
(1.9)
(102.4)
(1.0)
–
776.0
(154.0)
622.0
(37.4)
1.4
(36.0)
5.7
(0.1)
5.6
(0.1)
(2.9)
0.4
3.0
(1.7)
1.3
–
–
–
–
–
(8.8)
(8.8)
–
(8.8)
–
(0.4)
–
–
–
–
–
(80.6)
(80.6)
(0.4)
(81.0)
(5.0)
(0.4)
–
(161.9)
(9.2)
–
(9.2)
(248.3)
26.0
(222.3)
2021
NGR1
VAT/GST
Revenue
Gross Profit
Contribution2
Operating costs excluding
marketing costs
Underlying EBITDAR before
separately disclosed items
Rental costs
Underlying EBITDA before
separately disclosed items
Share based payments
Depreciation and Amortisation
Share of joint ventures and
associates
Operating profit/(loss) before
separately disclosed items
Separately disclosed items (note 6)
Group operating profit/(loss)
Net finance income
Profit before tax
Income tax
Profit for the year from
continuing operations
Loss for the year from discontinued
operations after tax (note 21)
Profit for the year after
discontinued operations
Elimination
of internal
revenue
£m
(4.1)
–
(4.1)
–
–
–
–
–
–
–
–
–
–
–
–
165
Total
Group
£m
3,886.3
(56.3)
3,830.0
2,435.8
1,851.5
(952.7)
898.8
(17.1)
881.7
(12.3)
(222.8)
(162.5)
484.1
(128.3)
355.8
37.4
393.2
(117.6)
275.6
(14.9)
260.7
1. Included within NGR are amounts of £82.6m (2020: £116.6m) in relation to online poker services and £20.5m (2020: £14.9m) arising from the operation of greyhound stadia
recognised under IFRS 15 Revenue.
2. Contribution represents gross profit less marketing costs and is a key performance metric used by the Group, particularly in Online.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 166
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
5 Segment information (continued)
2020
Re-presented
NGR
VAT/GST
Revenue
Gross Profit
Contribution1
Operating costs excluding marketing costs
Underlying EBITDAR before separately
disclosed items
Rental costs
Underlying EBITDA before separately
disclosed items
Share based payments
Depreciation and Amortisation
Share of joint ventures and associates
Operating profit/(loss) before separately
disclosed items
Separately disclosed items (note 6)
Group operating profit/(loss)
Net finance expense
Profit before tax
Income tax
Profit for the year from continuing operations
Loss for the year from discontinued
operations after tax (note 21)
Profit for the year after discontinued
operations
Online
£m
2,747.5
(66.9)
2,680.6
1,708.7
1,147.4
(342.5)
804.9
(1.4)
803.5
(4.3)
(120.1)
0.1
679.2
(304.5)
374.7
Retail
£m
857.1
–
857.1
577.5
571.7
(456.1)
115.6
(17.3)
98.3
(1.5)
(115.8)
–
(19.0)
226.3
207.3
All other
segments
£m
Corporate
£m
27.8
–
27.8
22.4
21.1
(25.0)
(3.9)
(0.3)
(4.2)
–
(2.7)
0.3
(6.6)
–
(6.6)
–
–
–
–
–
(54.5)
(54.5)
–
(54.5)
(9.0)
–
(60.6)
(124.1)
(92.4)
(216.5)
Elimination
of internal
revenue
£m
(3.9)
–
(3.9)
–
–
–
–
–
–
–
–
–
–
–
–
Total
Group
£m
3,628.5
(66.9)
3,561.6
2,308.6
1,740.2
(878.1)
862.1
(19.0)
843.1
(14.8)
(238.6)
(60.2)
529.5
(170.6)
358.9
(184.2)
174.7
(60.9)
113.8
(34.4)
79.4
1. Contribution represents gross profit less marketing costs and is a key performance metric used by the Group, particularly in Online.
Geographical information
Revenue by destination and non-current assets on a geographical basis for the Group, are as follows:
United Kingdom
Australia
Italy
Rest of Europe1
Rest of the world2
Total
1. Rest of Europe is predominantly driven by markets in Germany, Belgium and Georgia.
2. Rest of the world is predominantly driven by the market in Brazil.
3. Non-current assets excluding other financial assets, deferred tax assets and retirement benefit assets.
2021
Non-current
assets3
£m
3,007.2
507.0
483.0
1,807.0
103.6
5,907.8
Revenue
£m
1,754.5
458.1
392.4
966.2
258.8
3,830.0
2020
re-presented
Non-current
assets3
£m
3,116.4
557.8
428.4
1,569.0
4.5
5,676.1
Revenue
£m
1,675.5
383.3
353.6
962.9
186.3
3,561.6
Entain plc | Annual Report 2021 Financial statements 6 Separately disclosed items
Amortisation of acquired intangibles1
Integration costs2
Corporate transaction costs3
Tax litigation/ one-off legislative impacts4
Legal and onerous contract provisions5
Profit on disposal of property, plant and equipment6
Movement in fair value of contingent consideration7
Issue costs write off8
Impairment loss9
Triennial restructuring costs
Other one-off items10
Total before tax
Tax on separately disclosed items11
Separately disclosed items for the year from continuing operations
Separately disclosed items for the year from discontinued operations (note 21)
Separately disclosed items for the year after discontinued operations
167
2020
£m
307.0
25.1
–
(223.5)
8.9
(6.9)
42.4
5.3
5.0
8.3
4.3
175.9
(2.1)
173.8
20.0
193.8
2021
£m
144.2
17.3
9.4
(80.2)
26.2
(1.9)
6.1
5.8
3.3
–
3.9
134.1
27.5
161.6
9.3
170.9
1.
Amortisation charges in relation to acquired intangible assets arising from the various acquisitions made by the Group in recent years, including Ladbrokes Coral, Crystalbet,
Enlabs, Portugal and Unikrn.
2. Final costs associated with the integration of the Ladbrokes Coral Group and legacy GVC businesses, including redundancy costs.
3. During the year, the Group incurred a number of transaction costs associated with M&A activity including Enlabs, Portugal and Unikrn as well as the approaches for the Entain
4.
Group by US based betting and gaming businesses.
In November 2021, the Athens Administrative Court of Appeal found in favour of the Group on the 2010/11 Greek Tax case. The ruling stipulated that the previous amounts paid
by the Group plus interest were now due to Entain. Whilst the Greek authorities have appealed the decision by the courts, the Group has recognised the full receivable due under
the court ruling including reversing charges previously recognised in the Income Statement in respect of 2010/11. The credit of £80.2m recognised also includes £7.1m in respect
of the final amount received in respect of the UK VAT claim (2020: £223.0m).
Includes costs associated with complying with the HMRC investigation as well as a provision for potential settlement costs on matters associated with past trading activity.
5.
6. Relates to the sale of various retail assets.
7.
8.
9.
Costs associated with discount unwind and movements in the fair value of contingent consideration on acquisition activity from previous years.
Issue costs written off on the refinancing of US denominated loans and the Group’s revolving credit facility in the year.
During the current year, the Group recorded a non-cash impairment charge against certain leased assets which are now vacant and against assets relating to the disposed
Betdaq business.
10. Relates predominantly to the one-off costs associated with Covid-19.
11. The tax charge on separately disclosed items of £27.5m (2020: credit of £2.1m) represents -20.5% (2020: 1.2%) of the separately disclosed items incurred of £134.1m (2020:
£175.9m). This is lower than the expected rate of 19.0% (2020: 19.0%) as certain corporate transaction costs and integration costs are non-deductible for tax purposes, as
well as the impact of significant elements of amortisation of acquired intangibles being subject to lower overseas tax rates. In addition, the changes in future UK and Gibraltar
corporation tax rates have been applied to deferred tax liabilities recognised against acquired intangibles resulting in a current year charge.
The items above reflect incomes and expenditures which are either exceptional in nature or size or are associated with the amortisation
of acquired intangibles. The Directors believe that each of these items warrants separate disclosure as they do not form part of
the day to day underlying trade of the Group and are not expected to persist beyond the short term (excluding the amortisation of
acquired intangibles).
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 168
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
7 Administrative costs
Profit before tax, net finance expense and separately disclosed items has been arrived at after charging:
Betting tax and Machine Games Duty
Revenue share arrangements
Software royalties
Other cost of sales
Cost of sales
Salaries and payroll-related expenses (note 9)
Property expenses
Content and levy expenses
Marketing expenses
Depreciation and amortisation – owned assets
Depreciation and amortisation – leased assets
Other operating expenses
Administrative costs
Separately disclosed items before tax and finance expense (note 6)
Total
2021
£m
837.3
440.3
116.1
0.5
2020
£m
767.1
386.6
91.6
7.7
1,394.2
1,253.0
575.4
63.1
137.5
584.3
169.0
53.8
206.1
514.9
62.7
136.1
568.4
176.2
62.4
198.2
1,789.2
1,718.9
128.3
3,311.7
170.6
3,142.5
During the year the Group benefited from £48.7m (2020: £62.9m) of government support in the form of furlough receipts across the
various countries in which the Group operates, predominantly the UK and the Republic of Ireland. There are no ongoing obligations
on the Group for the amounts received which have been recorded as a reduction to salaries and payroll-related expenses within
underlying trading.
Fees payable to KPMG were as follows:
Audit and audit-related services:
Audit of the parent Company and Group financial statements
Audit of the Company’s subsidiaries
Audit-related assurance services
Total fees
8 Finance expense and income
Bank loans and overdrafts
Interest on lease liabilities1
Issue costs write off (note 6)
Total finance expense
Interest receivable
Gains/(losses) arising on financial derivatives
Gains/(losses) arising on foreign exchange on debt instruments
Net finance income/(expense)
1. Interest on lease liabilities of £13.8m (2020: £16.3) is net of £0.2m of sub-let interest receivable (2020: £0.4m).
2021
£m
2020
£m
0.6
1.9
0.5
3.0
2021
£m
(63.3)
(13.8)
(5.8)
(82.9)
2.1
62.0
56.2
37.4
0.6
1.5
0.4
2.5
2020
£m
(60.2)
(16.3)
(5.3)
(81.8)
2.3
(61.8)
(42.9)
(184.2)
Entain plc | Annual Report 2021 Financial statements 9 Employee staff costs
The average monthly number of employees (including Executive Directors) was:
Online
Retail
Other
Corporate1
1. Certain central functions have been recategorised to sit within a centralised corporate segment rather than within a divisionalised one.
The number of people employed by the Group at 31 December 2021 was 25,554 (2020: 23,573).
Wages and salaries
Redundancy costs1
Social security costs
Other pension costs (note 30)2
Share-based payments (note 31)
169
2021
Number
2020
Number
8,929
14,363
428
918
24,638
6,447
16,806
463
271
23,987
2021
£m
503.1
6.0
41.6
16.3
12.3
579.3
2020
£m
444.2
9.1
40.3
15.6
14.8
524.0
1. Included within redundancy costs are £3.4m (2020: £6.7m) which are included within separately disclosed items.
2. Included within other pension costs are £0.5m (2020: £2.4m) which are included within separately disclosed items.
In addition to salary, employees may qualify for various benefit schemes operated by the Group. Eligibility for benefits is normally
determined according to an employee’s length of service and level of responsibility. The amounts of some benefits are proportionate to
individual salary.
Benefits may include insured benefits that can cover private healthcare for the employee and their immediate family, long-term disability,
personal accident and death in service cover. Company cars, including fuel benefits, are provided predominantly to meet job requirements
but also to certain executives.
Staff costs are stated net of furlough receipts as discussed in note 7.
10 Income tax
Analysis of expense for the year:
Current income tax:
– UK
– adjustments in respect of previous years
Deferred tax:
– relating to origination and reversal of temporary differences
– adjustments in respect of previous years
Income tax expense reported in the income statement
Income tax expense is attributable to
Profit from continuing operations
Loss from discontinued operations
Deferred tax charged/(credited) directly to other comprehensive income
2021
£m
97.4
(6.8)
32.3
(5.3)
117.6
117.6
–
117.6
10.9
2020
£m
89.1
7.2
(33.9)
(2.8)
59.6
60.9
(1.3)
59.6
(0.1)
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 170
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
10 Income tax (continued)
A reconciliation of income tax expense (2020: expense) applicable to profit (2020: profit) before tax at the UK statutory income tax rate to
the income tax expense (2020: expense) for the years ended 31 December 2021 and 31 December 2020 is as follows:
Profit from continuing operations before income tax
Loss from discontinued operations before tax
Profit before tax
Corporation tax expense thereon at 19.00%
Adjusted for the effects of:
– Lower effective tax rates on overseas earnings
– Non-deductible expenses
– Fair value adjustment to contingent consideration
– Goodwill impairment
– Impact of additional 50% deduction for marketing expenditure in Gibraltar
– Increase in unrecognised tax losses
– (Decrease)/increase in unrecognised deferred interest
– Revaluation of deferred tax balances following increase in UK and Overseas tax rates
– Difference in current and deferred tax rates
Adjustments in respect of prior years:
– Deferred tax prior year adjustments
– Current tax adjustments
Income tax expense
Reported as:
– expense in consolidated income statement (before separately disclosed items)
– expense/(credit) in consolidated income statement (tax on separately disclosed items) (note 6)
Income tax expense
Deferred tax
Deferred tax at 31 December relates to the following:
2021
£m
393.2
(14.9)
378.3
2020
£m
174.7
(35.7)
139.0
71.9
26.4
(10.7)
7.0
1.2
–
(18.4)
50.5
(0.4)
28.3
0.3
(5.3)
(6.8)
(6.9)
10.6
5.9
2.4
–
18.5
2.2
–
(3.9)
(2.8)
7.2
117.6
59.6
90.1
27.5
117.6
63.0
(3.4)
59.6
Property, plant and equipment
Intangible assets
Retirement benefit assets
Losses
Other temporary difference
Deferred tax liabilities/ (assets)
Deferred tax
liabilities
Deferred tax
assets
2021
£m
–
333.0
33.3
–
41.7
408.0
2020
£m
–
284.7
22.6
–
24.4
331.7
2021
£m
(62.3)
(27.3)
–
(27.0)
(24.8)
2020
£m
(58.6)
(19.8)
–
(27.2)
(24.2)
(141.4)
(129.8)
Entain plc | Annual Report 2021 Financial statements 10 Income tax (continued)
Movements in deferred tax during the year ended 31 December 2021 were recognised as follows:
Net deferred tax liabilities/(assets)
Property,
plant and
equipment
£m
Intangible
assets
£m
Retirement
benefit assets
£m
(56.1)
0.1
–
(0.2)
(56.2)
(6.9)
–
–
0.8
(62.3)
304.9
(48.7)
–
6.3
262.5
24.2
–
25.0
(6.0)
305.7
23.4
(0.7)
(0.1)
–
22.6
(0.2)
10.9
–
–
33.3
Losses
£m
(33.2)
6.7
–
(0.7)
(27.2)
(0.9)
–
–
1.1
(27.0)
At 31 December 2020
Income statement
Other comprehensive income
Exchange adjustment
At 31 December 2021
Income statement
Other comprehensive income
Arising on business combinations (note 32)
Exchange adjustment
At 31 December 2021
Amounts presented on the consolidated balance sheet:
Deferred tax liabilities
Deferred tax assets
Net deferred tax liability
171
Total
£m
233.8
(36.7)
(0.1)
4.9
201.9
27.0
10.9
32.2
(5.4)
266.6
2020
£m
331.7
(129.8)
201.9
Other
temporary
differences
£m
(5.2)
5.9
–
(0.5)
0.2
10.8
–
7.2
(1.3)
16.9
2021
£m
408.0
(141.4)
266.6
Deferred tax assets are considered recognisable based on the ability of future offset against deferred tax liabilities or against future
taxable profits.
As at 31 December 2021, the Group had £1,621.6m (2020: £1,660.7m) of gross unrecognised deferred tax assets. This unrecognised
deferred tax asset consists of £213.3m of capital losses (2020: £213.3m), £1,408.7m of trading losses (2020: £1,407.2m), £nil of deferred
interest relief (2020: £40.2m) and £0.4m of other deferred tax assets (2020: £nil). These assets have not been recognised as they are not
expected to be utilised in the foreseeable future.
There are no significant unrecognised taxable temporary differences associated with investments in subsidiaries.
The standard rate of UK corporation tax throughout the period was 19.0%.
In the UK Budget on 3 March 2021, the Chancellor announced that the standard rate of UK Corporation Tax would be increased from 19%
to 25% with effect from 1 April 2023. This was substantively enacted on 24 May 2021. Both the 19% and the 25% rate have therefore
been used in measuring the UK deferred tax items at the date of this Report, depending on the expected date of reversal of any timing
differences. The impact of the UK Corporation Tax increase in this Report is a credit of £13.0m to Underlying Items, and a charge of
£10.6m to Separately Disclosed Items.
In the Gibraltar Budget on 20 July 2021, the Chief Minister announced that the standard rate of Gibraltar Corporate Income Tax would
be increased from 10% to 12.5% with effect from 1 August 2021. This was substantively enacted on 26 July 2021. The 12.5% rate has
therefore been used in measuring the Gibraltar deferred tax items at the date of this Report. The impact of the Gibraltar Corporate Income
Tax increase in this Report is a credit of £5.8m to Underlying Items, and a charge of £36.7m to Separately Disclosed Items. The Gibraltar
Budget also introduced a temporary enhanced tax deduction for qualifying business marketing and promotion costs, which will apply
for the years ending 31 December 2021 and 31 December 2022. This was substantively enacted on 30 July 2021. The impact of this
temporary measure in this Report is a credit of £18.4m to Underlying Items.
The Group’s future tax charge, and effective tax rate, could be affected by a number of factors including the mix of profits arising in each
country, changes to statutory corporate tax rates and the impact of continuing global tax reforms.
The Group has noted the OECD’s work on the taxation of the digital economy and the EU Proposal for a Council Directive on ensuring
a global minimum level of taxation for multinational groups, issued on 22 December 2021. If implemented, these are expected to apply
to the Group from the year ended 31 December 2023. The Group expects this to increase the future Effective Tax Rate on Underlying
Items. It is not yet possible to quantify the impact these changes will have until further details on the proposals and their implementation
become available.
The deferred tax assets and liabilities are measured at the tax rates of the respective territories which are expected to apply to the year in
which the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at
the balance sheet date. Deferred tax on retirement benefit assets is provided at 35.0%, which is the rate applicable to refunds.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021
172
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
11 Dividends
The dividends in the year of £24.5m relate entirely to dividends paid out to non-controlling interests (2020: £12.4m).
12 Earnings per share
Basic earnings per share has been calculated by dividing the profit for the year attributable to shareholders of the Company of £249.3m
(2020: £57.8m) by the weighted average number of shares in issue during the year of 585.7m (2020: 583.7m).
At 31 December 2021, there were 586.6m €0.01 ordinary shares in issue.
The calculation of adjusted earnings per share which removes separately disclosed items and foreign exchange gains and losses arising
on financial instruments has also been disclosed as it provides a better understanding of the underlying performance of the Group.
Separately disclosed items are defined in note 4 and disclosed in note 6.
Total earnings per share
Weighted average number of shares (millions)
Shares for basic earnings per share
Potentially dilutive share options and contingently issuable shares
Shares for diluted earnings per share
Total profit
Profit attributable to shareholders
– from continuing operations
– from discontinued operations
(Gains)/losses arising from financial instruments
(Gains)/losses arising from foreign exchange debt instruments
Associated tax charge on gains arising from financial instruments and foreign exchange debt instruments
Separately disclosed items net of tax (note 6)
Adjusted profit attributable to shareholders
– from continuing operations
– from discontinued operations
2021
585.7
5.4
591.1
2021
£m
249.3
264.2
(14.9)
(62.0)
(56.2)
9.9
170.9
311.9
317.5
(5.6)
2020
583.7
6.2
589.9
2020
£m
57.8
92.2
(34.4)
61.8
42.9
–
193.8
356.3
370.7
(14.4)
Earnings per share (pence)
Basic earnings per share
– from continuing operations
– from discontinued operations
From profit for the period
Diluted earnings per share
– from continuing operations
– from discontinued operations
From profit for the period
Standard earnings
per share
Adjusted earnings
per share
2021
2020
2021
2020
45.1
(2.5)
42.6
44.7
(2.5)
42.2
15.8
(5.9)
9.9
15.6
(5.8)
9.8
54.3
(1.0)
53.3
53.8
(1.0)
52.8
63.5
(2.5)
61.0
62.8
(2.4)
60.4
The earnings per share presented above is inclusive of the performance from the US joint venture BetMGM. Adjusting for the removal of
the BetMGM performance would result in a basic adjusted earnings per share of 81.9p (2020: 73.9p) and a diluted adjusted earnings per
share of 81.1p (2020: 73.1p) from continuing operations.
Entain plc | Annual Report 2021 Financial statements 173
Total
£m
6,712.0
190.5
101.6
(194.3)
6,809.8
(216.3)
109.5
491.6
(9.0)
1.1
Goodwill
£m
Licences
£m
Software
£m
Customer
relationships
£m
Trade-marks &
brand names
£m
3,238.8
128.3
–
(14.9)
3,352.2
(132.8)
–
273.1
–
–
3,492.5
272.4
18.7
–
–
291.1
(15.6)
–
–
–
275.5
3,061.1
3,217.0
15.7
–
–
–
15.7
(0.3)
12.8
22.3
(0.8)
–
49.7
6.3
–
1.1
–
7.4
(0.1)
6.8
–
(0.8)
13.3
8.3
36.4
595.9
11.3
101.6
(169.5)
539.3
(28.0)
96.7
21.1
(8.2)
1.1
622.0
379.3
6.0
115.8
(169.1)
332.0
(22.3)
102.7
1.6
(8.2)
405.8
935.9
20.6
–
(7.9)
948.6
(22.5)
–
78.9
–
–
1,925.7
30.3
–
(2.0)
1,954.0
(32.7)
–
96.2
–
–
1,005.0
2,017.5
7,186.7
593.2
17.4
262.2
(1.2)
871.6
(19.4)
89.8
–
–
942.0
96.4
6.8
39.3
(1.3)
141.2
(8.6)
48.0
–
–
180.6
1,347.6
48.9
418.4
(171.6)
1,643.3
(66.0)
247.3
1.6
(9.0)
1,817.2
207.3
216.2
77.0
63.0
1,812.8
1,836.9
5,166.5
5,369.5
13 Goodwill and intangible assets
Cost
At 1 January 2020
Exchange adjustment
Additions
Disposals and assets classified as held for sale
At 31 December 2020
Exchange adjustment
Additions
Additions from business combinations (note 32)
Disposals and assets classified as held for sale
Reclassification
At 31 December 2021
Accumulated amortisation and impairment
At 1 January 2020
Exchange adjustment
Amortisation charge
Disposals
At 31 December 2020
Exchange adjustment
Amortisation charge
Impairment charge
Disposals and assets classified as held for sale
At 31 December 2021
Net book value
At 31 December 2020
At 31 December 2021
At 31 December 2021, the Group had not entered into contractual commitments for the acquisition of any intangible assets (2020: £nil).
Included within trade-marks & brand names are £1,398.4m (2020: £1,398.4m) of intangible assets considered to have indefinite lives.
These assets relate to the UK Ladbrokes and Coral brands which are considered to have indefinite durability that can be demonstrated,
and their value can be readily measured. The brands operate in longstanding and profitable market sectors. The Group has a strong
position in the market and there are barriers to entry due to the requirement to demonstrate that the applicant is a fit and proper person
with the “know-how” required to run such operations.
Goodwill reflects the value by which consideration exceeds the fair value of net assets acquired as part of a business combination
including the deferred tax liability arising on acquisitions.
Licences comprise the cost of acquired betting shop licences.
Software relates to the cost of acquired software, through purchase or business combination, and the capitalisation of internally
developed software. Additions of £96.7m (2020: £101.6m) include £46.0m of internally capitalised costs (2020: £31.1m).
Customer relationships, trade-marks and brand names relate to the fair value of customer lists, trade-marks and brand names acquired
as part of business combinations, primarily relating to the bwin, Ladbrokes Coral Group plc and Enlabs businesses.
An impairment charge of £1.6m (2020: £nil) has been made against assets relating to the disposed Betdaq business. See notes 6 and 14
for further details of the impairment charge.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 174
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
14 Impairment testing of goodwill and indefinite life intangible assets
An impairment loss is recognised for any amount by which an asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
Within UK and European Retail, the cash generating units (“CGUs”) are generally an individual Licensed Betting Office (“LBO”) and
therefore, impairment is first assessed at this level for licences (intangibles) and property, plant and equipment, with any impairment
arising booked to licences and property, plant and equipment on a pro-rata basis. Since goodwill and brand names have not been
historically allocated to individual LBOs, a secondary assessment is then made to compare the carrying value of the segment against the
recoverable amount with any additional impairment then taken against goodwill first.
For Online the CGU is the relevant geographical location or business unit, for example Australia, European digital (defined as websites
hosted by proprietary platforms based in European constituent countries), Digital (defined as websites hosted by Entain proprietary
platforms) etc. and any impairments are made firstly to goodwill, next to any capitalised intangible asset and then finally to property,
plant and equipment. The expected cash flows generated by the assets are discounted using appropriate discount rates that reflect the
time value of money and risks associated with the group of assets.
For both tangible and intangible assets, the future cash flows are based on the forecasts and budgets of the CGU or business discounted
to reflect time value of money. The key assumptions within the UK and European Retail budgets are OTC wagers (customer visits and
spend per visit), the average number of machines per shop, gross win per shop per week, salary increases, the potential impact of the
shop closures and the fixed costs of the LBOs. The key assumptions within the budgets for Online are the number of active customers, net
revenue per head, win percentage, marketing spend, revenue shares and operating costs.
The value-in-use calculations use cash flows based on detailed, board approved, financial budgets prepared by management covering a
three-year period. These forecasts have been extrapolated over years 4 to 8 representing a declining growth curve from year 3 until the
long term forecast growth rate is reached. The growth rates used from years 4-8 range from 0% to 16%. From year 9 onwards long term
growth rates used are between 0% and 2.0% (2020: between 0% and 3.0%) and are based on the long term GDP growth rate of the
countries in which the relevant CGUs operate or the relevant outlook for the business. An 8-year horizon is considered appropriate based
on the Group’s history of underlying profit as well as ensuring there is an appropriate decline to long term growth rates from those growth
rates currently observed in our key markets. A 0% growth rate has been used for the UK Retail operating segment due to the ongoing
uncertainty following Covid-19. All key assumptions used in the value-in-use calculations reflect the Group’s past experience unless a
relevant external source of information is available.
The discount rate calculation is based on the specific circumstances with reference to the WACC and risk factors expected in the industry
in which the Group operates.
The pre-tax discount rates used and the associated carrying value of goodwill by CGU is as follows:
Goodwill
Digital
UK Retail
Australia
European Retail
European Digital
Enlabs
All other segments
2021
%
2020
%
2021
£m
10.9
10.9
11.7
9.3 – 11.5
10.9 – 11.5
12.7
10.9
9.1
9.1
10.6
8.5 – 10.4
9.9 – 10.4
n/a
9.1
2,121.5
76.4
331.2
153.0
332.0
187.7
15.2
3,217.0
2020
£m
2,101.1
76.4
349.5
163.7
355.2
–
15.2
3,061.1
It is not practical or material to disclose the carrying value of individual licences by LBO.
Impairment recognised during the year
Impairments of intangible assets and property, plant and equipment are recognised as separately disclosed items within
operating expenses.
During the current year, the Group recorded a non-cash impairment charge of £3.3m (2020: £5.0m) on certain head office locations which
are now vacant (within the Retail segment), and against assets relating to the disposed Betdaq business (within All other segment).
Sensitivity analysis
A reduction to 0% for the terminal growth rate applied to the cashflows (with other assumptions remaining constant) would result in no
additional impairment to any CGU.
A 5% decrease in all cash flows used in the discounted cash flow model for the value in use calculation (with other assumptions remaining
constant) would result in no additional impairment to any CGU.
A 0.5pp increase in discount rates used in the discounted cash flow model for the value in use calculation (with all other assumptions
remaining constant) would result in no additional impairment to any CGU.
No other reasonable change in assumptions to the CGUs would cause any additional impairment.
Entain plc | Annual Report 2021 Financial statements 175
14 Impairment testing of goodwill and indefinite life intangible assets (continued)
Impairment testing across the business
Licences/
franchisees
PPE & Software
Customer
relationships
Goodwill
Brand name
Digital
Digital Impairment review
UK Retail
UK Retail site by site Impairment review
UK Retail – Impairment review
ROI
Eurobet
Digital
Eurobet
Retail
Belgium
Digital
Belgium
Retail
Australia
Enlabs
ROI site by site Impairment review
ROI Impairment review
Eurobet Digital Impairment review
Eurobet Retail Impairment review
Belgium Digital Impairment review
Belgium Digital Impairment review
Australia Impairment review
Enlabs Impairment review
Combined
Digital/
UK Retail
Impairment
review
Eurobet
Impairment
review
Belgium
Impairment
review
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 176
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
15 Property, plant and equipment
Cost
At 1 January 2020
Exchange adjustment
Additions
Disposals and assets classified as held for sale
Reclassification
At 31 December 2020
Exchange adjustment
Additions
Additions from business combinations (note 32)
Disposals and assets classified as held for sale
Reclassification
At 31 December 2021
Accumulated depreciation
At 1 January 2020
Exchange adjustment
Depreciation charge
Impairment
Disposals and assets classified as held for sale
Reclassification
At 31 December 2020
Exchange adjustment
Depreciation charge
Impairment
Disposals and assets classified as held for sale
At 31 December 2021
Net book value
At 31 December 2020
At 31 December 2021
Land and
buildings
£m
Plant and
equipment
£m
Fixtures
and fittings
£m
Leased
assets
£m
29.6
–
13.9
(17.0)
–
26.5
(0.6)
14.9
0.2
(14.2)
-
26.8
21.2
–
10.3
–
(17.0)
–
14.5
(0.6)
11.6
–
(14.2)
11.3
12.0
15.5
78.6
2.4
13.0
(4.6)
–
89.4
(2.7)
16.8
2.0
(1.9)
(1.1)
102.5
15.7
1.4
12.9
–
(4.6)
25.4
(2.1)
16.9
–
(1.9)
38.3
64.0
64.2
237.5
3.7
31.6
(72.9)
(18.1)
181.8
(12.0)
38.1
0.2
(19.8)
–
188.3
90.3
2.0
41.6
–
(72.9)
(7.1)
53.9
(10.6)
28.7
–
(19.8)
52.2
439.8
3.5
70.9
(2.8)
18.1
529.5
(5.6)
52.0
0.9
(4.5)
–
572.3
190.4
0.4
62.4
5.0
(2.1)
7.1
263.2
(2.0)
62.5
1.7
(4.5)
320.9
Total
£m
785.5
9.6
129.4
(97.3)
–
827.2
(20.9)
121.8
3.3
(40.4)
(1.1)
889.9
317.6
3.8
127.2
5.0
(96.6)
–
357.0
(15.3)
119.7
1.7
(40.4)
422.7
127.9
136.1
266.3
251.4
470.2
467.2
At 31 December 2021, the Group had not entered into contractual commitments for the acquisition of any property, plant and equipment
(2020: £nil).
In the preceding year the Group reclassified certain leased assets that were previously held within fixtures and fittings to be presented
within Leased assets.
Included within fixtures, fittings and equipment are assets in the course of construction which are not being depreciated of £8.3m
(2020: £38.8m), relating predominantly to the new till system in UK Retail.
An impairment charge of £1.7m (2020: £5.0m) has been made against office buildings included within leased assets in the year.
See notes 6 and 14 for further details.
Entain plc | Annual Report 2021 Financial statements 15 Property, plant and equipment (continued)
Analysis of leased assets:
Cost
At 1 January 2020
Exchange adjustment
Additions
Disposals and assets classified as held for sale
Reclassification
At 31 December 2020
Exchange adjustment
Additions
Additions from business combinations
Disposals and assets classified as held for sale
At 31 December 2021
Accumulated depreciation
At 1 January 2020
Exchange adjustment
Depreciation charge
Impairment
Disposals and assets classified as held for sale
Reclassification
At 31 December 2020
Exchange adjustment
Depreciation charge
Impairment
Disposals and assets classified as held for sale
At 31 December 2021
Net book value
At 31 December 2020
At 31 December 2021
16 Interest in joint venture
Cost
At 1 January 2020
Additions
Exchange adjustment
Share of loss after tax
At 31 December 2020
Additions
Exchange adjustment
Share of loss after tax
At 31 December 2021
Land and
buildings
£m
Plant and
equipment
£m
433.4
3.3
40.3
(0.8)
–
476.2
(5.5)
51.1
0.9
(2.0)
520.7
188.2
0.3
56.6
5.0
(0.3)
–
249.8
(1.9)
52.2
1.7
(2.0)
299.8
226.4
220.9
6.4
0.2
30.6
(2.0)
18.1
53.3
(0.1)
0.9
–
(2.5)
51.6
2.2
0.1
5.8
–
(1.8)
7.1
13.4
(0.1)
10.3
–
(2.5)
21.1
39.9
30.5
177
Total
£m
439.8
3.5
70.9
(2.8)
18.1
529.5
(5.6)
52.0
0.9
(4.5)
572.3
190.4
0.4
62.4
5.0
(2.1)
7.1
263.2
(2.0)
62.5
1.7
(4.5)
320.9
266.3
251.4
Share of joint
venture’s net
assets
£m
6.0
61.8
(1.0)
(60.6)
6.2
164.4
1.0
(161.9)
9.7
The joint venture represents the Group’s investment in BetMGM set up in the US in which a 50% stake is held.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 178
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
16 Interest in joint venture (continued)
Summarised financial information in respect of the Group’s joint venture’s net assets is set out below:
Non-current assets
Cash and cash equivalents
Other current assets
Current assets
Balances with customers
Other current liabilities
Current liabilities
Non-current liabilities
Net assets
Group’s share of net assets
Summarised statement of comprehensive income
Revenue
Depreciation and amortisation
Other operating expenses
Income tax
Loss for the year
Group’s share of loss
2021
£m
103.5
208.1
67.8
275.9
(132.6)
(227.4)
(360.0)
–
19.4
9.7
2021
£m
617.9
(12.0)
(929.7)
–
(323.8)
(161.9)
2020
£m
42.2
45.0
15.5
60.5
(16.2)
(67.1)
(83.3)
(7.0)
12.4
6.2
2020
£m
135.5
(3.5)
(253.2)
–
(121.2)
(60.6)
There are no contingent liabilities relating to the Group’s interest in the joint venture (2020: £nil).
The risks associated with the Group’s interest in joint ventures are aligned to the same risks the Group is exposed to on the basis that they
operate wholly within the betting and gaming market.
The Group has committed to further investment in BetMGM over the course of 2022, with $225.0m additional contributions expected
($450.0m split between both joint venture partners). This will take the Group’s total investment to $550m ($1.1bn across both joint
venture partners).
17 Interest in associates and other investments
Cost
At 1 January 2020
Additions
Revaluation loss
Share of profit after tax
Share of other comprehensive income
Foreign exchange
At 31 December 2020
Revaluation loss
Arising on business combinations (note 32)
Additions
Share of loss after tax
Foreign exchange
At 31 December 2021
Share of
associates’
net assets
£m
Other
investments
£m
19.0
–
–
0.4
0.3
(0.4)
19.3
–
–
25.6
(0.6)
(0.1)
44.2
10.9
0.2
(1.7)
–
–
0.7
10.1
(2.3)
2.9
3.8
–
(0.3)
14.2
Total
£m
29.9
0.2
(1.7)
0.4
0.3
0.3
29.4
(2.3)
2.9
29.4
(0.6)
(0.4)
58.4
Entain plc | Annual Report 2021 Financial statements 17 Interest in associates and other investments (continued)
Associates
Summarised financial information in respect of the associates is set out below:
Non-current assets
Current assets
Current liabilities
Net assets
Group’s share of net assets
Revenue for the year
Profit/(loss) for the year
Other comprehensive (expense)/income
Total comprehensive expense
Group’s share of total comprehensive (expense)/income
Further details of the Group’s associates are listed in note 34.
179
2021
£m
43.3
132.9
(72.7)
103.5
44.2
2020
£m
14.1
106.5
(51.5)
69.1
19.3
193.5
197.2
0.3
(1.2)
(0.9)
(0.6)
(1.7)
1.3
(0.4)
0.7
The financial year end of Sports Information Services (Holdings) Limited (SIS), an associate of the Group, is 31 March. The Group has
included the results for SIS for the 12 months ended 31 December 2021.
In the year the Group acquired four new associates; Gran Casino Dinant SA, Infiniti Casino Oostende NV, Leaderbet NV and Draw & Code
Limited. All associates are private companies and there are no quoted market price available for their shares.
The risks associated with associate investments considered to be aligned to the same risks the Group is exposed to on the basis that they
operate wholly within the betting and gaming market.
Other investments of £14.2m (2020: £10.1m) consist of investments which have no fixed maturity date or coupon rate.
18 Trade and other receivables
Trade receivables
Other receivables
Finance lease receivable
Prepayments
Trade and other receivables are presented on the Balance Sheet as follows:
Current
Non-current
Total
2021
£m
22.5
461.6
4.1
54.6
542.8
2021
£m
539.8
3.0
542.8
2020
£m
12.8
385.8
4.9
76.1
479.6
2020
£m
475.8
3.8
479.6
Trade receivables are non-interest bearing and are generally on 30-90 day terms. Trade receivables are reviewed for impairment on an
ongoing basis, taking account of the ageing of outstanding amounts and the credit profile of customers. Impaired receivables, including
all trade receivables that are a year old, are provided for in an allowance account. Impaired receivables are derecognised when they are
assessed as irrecoverable. The expected credit losses arising from receivables are not considered to be significant.
The balance of other receivables consists of the receivable for Greek tax of €227.5m (2020: €145.0m), amounts receivable from payment
service providers of £130.8m (2020: £172.4m), and other smaller items such as regulatory deposits, security deposits, rent deposits and
balances due from affiliates and partners.
Greek tax
In November, The Athens Administrative Court of Appeal ruled in favour of the Group on the 2010/11 Greek Tax Assessment, a ruling
which has subsequently been appealed by the Greek authorities. Following the ruling, the Group is now entitled to recover all amounts
paid under the 2010/11 Assessment plus interest and, as such, a receivable of €227.5m has been recorded.
Whilst the Group expects to be successful in defending the appeal by the Greek authorities, should the Greek Supreme Administrative
Court rule in favour of the Greek tax authorities, then the Group may become liable for the full 2010/11 Assessment plus interest.
Whilst the outcome of the appeal hearing, which is not expected until 2024, remains uncertain, the Group remains confident that the
Supreme Court will also find in favour of the Group.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 180
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
19 Cash and cash equivalents
Cash and short-term deposits
2021
£m
487.1
2020
£m
706.7
Additional to the cash balance above, in the prior year, were amounts of £43.1m included within assets classified as held for sale.
Cash and cash equivalents in the consolidated statement of cash flows comprises cash at bank with a maturity of three months or less,
overdrafts net of short term investments and includes £69.4m (2020: £36.3m) restricted in respect of customer accounts.
20 Trade and other payables
Current trade and other payables comprise:
Trade payables
Other payables
Social security and other taxes
Accruals
2021
£m
66.7
112.7
208.1
308.3
695.8
21 Assets held for sale and discontinued operations
During the year the Group disposed of its interest in its spread betting business recognising a loss on disposal of £9.3m in 2021.
Inclusive of the loss on disposal, the results for the year for the discontinued operation were:
Revenue
Cost of sales
Gross profit
Administrative costs
Operating loss
Separately disclosed items
Loss before tax
Income tax credit
Loss for the year from discontinued operations after tax
2021
£m
11.0
(6.9)
4.1
(9.7)
(5.6)
(9.3)
(14.9)
–
(14.9)
2020
£m
47.1
103.3
229.7
307.3
687.4
2020
£m
13.8
(7.6)
6.2
(20.6)
(14.4)
(21.3)
(35.7)
1.3
(34.4)
Separately disclosed items consist of £9.3m (2020: provision of £10.0m) relating to a loss on disposal (including tax), £nil (2020: £3.4m)
relating to amortisation of acquired intangibles, £nil (2020: £19.3m) relating to impairment and £nil (2020: £11.4m gain) relating to
movement in fair value of contingent consideration.
Entain plc | Annual Report 2021 Financial statements 21 Assets held for sale and discontinued operations (continued)
Items classified as held-for-sale on the balance sheet are disclosed below:
Non-current assets
Property, plant and equipment
Current assets
Trade and other receivables
Cash and cash equivalents
Assets classified as held for sale
Current liabilities
Trade and other payables
Balances with customers
Other financial liabilities
Liabilities classified as held for sale
22 Lease liabilities
Current
Lease liabilities
Non-current
Lease liabilities
Total lease liabilities
181
2020
£m
0.7
155.3
43.1
198.4
199.1
(12.7)
(155.0)
(4.3)
(172.0)
2021
£m
–
–
–
–
–
–
–
–
–
2021
£m
2020
£m
78.2
89.8
215.5
293.7
248.2
338.0
The Group’s leasing activity consists of leases on property, cars, Self Service Betting Terminals and office equipment. The majority of
those relate to the leasing of LBOs within the Retail estates and office buildings.
Each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. Variable lease payments which do not depend on
an index or a rate (such as lease payments on gaming machines based on a percentage of revenue) are excluded from the measurement
of the lease liability and asset. The Group classifies its right-of-use assets in a consistent manner to its property, plant and equipment
(see note 15).
Leases of vehicles and IT equipment are generally limited to a new lease term of 3 to 5 years. Leases of property generally have a
lease term ranging from 5 years to 10 years, with some legacy leases extending out to 20 years and beyond. Most new leases of
property are now generally expected to be limited to no more than 10 years, with a break option after no more than 5 years, except in
special circumstances.
The maturity analysis of lease liabilities at 31 December 2021 is as follows:
2021
Net present value
2020
Net present value
Within
1 year
£m
78.2
89.8
Minimum lease payments due
1-2 years
£m
2-5 years
£m
> 5 years
£m
Total
£m
52.4
103.6
59.5
293.7
67.6
108.5
72.1
338.0
The Group secures the use of its retail premises primarily through taking out leases for these premises. Typically, the leases are for a
duration between 5 and 10 years. In respect of the UK property portfolio there is commonly a right to negotiate replacement leases on
expiry, by virtue of the Landlord and Tenant Act 1954. Details of undiscounted amounts payable under leases are set out in note 25.
Certain lease payments are not recognised as a liability. This arises when the Group continues to pay rents and occupy properties
after the lease has expired. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable lease
payments and irrecoverable VAT are not permitted to be recognised as lease liabilities and are expensed as incurred.
The use of extension and termination options gives the Group added flexibility in the event it has identified more suitable premises in
terms of cost and/or location or determined that it is advantageous to remain in a location beyond the original lease term. An option is
only exercised when consistent with the Group’s regional markets strategy and the economic benefits of exercising the option exceeds
the expected overall cost.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 182
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
22 Lease liabilities (continued)
Amounts paid for short term and low value leases not included within the lease liability are immaterial.
The Group incurs no expense in relation to variable lease payments (2020: £nil).
Details of total cash outflow relating to leases, are disclosed in the Consolidated Statement of Cash Flows.
Group as Lessor:
Finance lease receivables are included in the statement of financial position within trade and other receivables and are as follows:
Current
Non-current
The maturity analysis of lease receivables, including the undiscounted lease payments to be received are as follows:
2021
£m
1.1
3.0
2020
£m
1.1
3.8
2021
Lease payments receivable
Interest
Present value of lease payments receivable
2020
Lease payments receivable
Interest
Present value of lease payments receivable
Operating lease commitments – Group as lessor
Within
1 year
£m
1.2
(0.1)
1.1
1.3
(0.2)
1.1
Minimum lease payments due
1-2 years
£m
2-5 years
£m
> 5 years
£m
Total
£m
1.7
(0.2)
1.5
1.1
(0.1)
1.0
0.7
(0.1)
0.6
1.9
(0.2)
1.7
1.1
(0.2)
0.9
1.3
(0.2)
1.1
4.7
(0.6)
4.1
5.6
(0.7)
4.9
A number of the sublease agreements for unutilised space in the UK shop estate are not classified as finance leases within IFRS 16.
These non-cancellable leases have remaining lease terms of between one and nine years. The future minimum rentals receivable under
these non-cancellable operating leases at 31 December are as follows:
Within one year
After one year but not more than five years
After five years
23 Interest bearing loans and borrowings
Current
Euro denominated loans
USD denominated loans
Sterling denominated loans
Non-current
Euro denominated loans
USD denominated loans
Sterling denominated loans
2021
£m
0.5
0.7
0.1
1.3
2021
£m
7.2
8.1
105.8
121.1
945.1
810.7
405.5
2,161.3
2020
£m
0.6
0.8
0.3
1.7
2020
£m
2.8
5.9
5.4
14.1
1,011.0
563.6
511.1
2,085.7
As at 31 December 2021 there were £515.0m (2020: £480.0m) of committed bank facilities of which £nil (2020: £nil) were drawn down.
Entain plc | Annual Report 2021 Financial statements 24 Provisions
At 1 January 2020
Provided
Utilised
Released
Exchange adjustment
At 31 December 2020
Provided
Utilised
Released
Exchange adjustment
Reclassification
At 31 December 2021
183
Total
£m
89.5
43.0
(61.4)
(4.6)
2.4
68.9
44.2
(49.9)
(12.8)
(3.2)
2.7
49.9
Property
provisions1
£m
Restructuring
provisions2
£m
Litigation and
regulation
provisions3
£m
13.0
12.3
(8.9)
(1.6)
–
14.8
8.0
(9.4)
(4.7)
–
0.4
9.1
9.1
6.7
(12.5)
–
–
3.3
3.7
(6.2)
–
–
–
0.8
67.4
24.0
(40.0)
(3.0)
2.4
50.8
32.5
(34.3)
(8.1)
(3.2)
2.3
40.0
1. The Group is party to a number of leasehold property contracts. Provision has been made against the unavoidable non-rent costs on those leases where the property is now
vacant. Provisions have been based on management’s best estimate of the minimum future cash flows to settle the Group’s obligations, considering the risks associated with
each obligation, discounted at a risk-free interest rate of 1%. The periods of vacant property commitments range from 1 to 14 years (2020: 1 to 15 years). As a result of the
implementation of IFRS 16 the rental elements of certain property provisions are now included within lease liabilities.
2. Restructuring provisions relate to redundancy costs provided in association with ongoing merger and acquisition activities.
3. Litigation and regulation provisions relate to estimates for potential liabilities which may arise in the Group as a result of customer claims and past practices. Whilst the nature
of legal claims means that the timing of settlement can be uncertain, we expect all claims to be settled in the next 1 to 2 years. Whilst the provisions are based on management’s
best estimate of the likely liability for obligations that exist at the year end date, the maximum potential exposure is not expected to be materially different to the provision made.
Of the total provisions at 31 December 2021, £43.5m (2020: £49.4m) is current and £6.4m (2020: £19.5m) is non-current.
Provisions expected to be settled in greater than 1 year are discounted at the risk free rate.
25 Financial risk management objectives and policies
The Group’s treasury function provides a centralised service for the provision of finance and the management and control of liquidity,
foreign exchange rates and interest rates. The function operates as a cost centre and manages the Group’s treasury exposures to reduce
risk in accordance with policies approved by the Board.
The Group’s principal financial instruments comprise bank loans, overdrafts, loan notes, bonds, financial guarantee contracts, and cash
and short-term deposits, together with certain derivative financial instruments. The main purpose of these financial instruments is to
raise finance for the Group’s operations. The Group has various other financial instruments such as trade receivables, trade payables and
accruals that arise directly from its operations. Details of derivatives are set out in note 26.
It is, and has been throughout the year under review, the Group’s policy that no trading in financial instruments shall be undertaken other
than betting and gaming transactions and for the purposes of currency trading as part of the discontinued Intertrader business (note 21).
Activity of this nature is only undertaken by the customer and is not speculative activity of the Group. The Group’s exposure to ante-post
betting and gaming transactions is not significant.
The main financial risks for the Group are exchange rate risk, interest rate risk, credit risk and liquidity risk. The Board reviews and agrees
policies for managing each of these risks and they are summarised below. The Group also monitors the market price risk arising from all
financial instruments.
Interest rate risk
The Group is exposed to interest rate risk on certain of its interest-bearing loans and borrowings and on cash and cash equivalents.
The Group’s policy for the year ended 31 December 2021 was to maintain a minimum of 20.0% (2020: 20.0%) of total borrowings at fixed
interest rates to reduce its sensitivity to movements in variable short-term interest rates. The Group anticipates revisiting this policy upon
the maturity of its fixed term bonds during 2022. At 31 December 2021, £500.0m (2020: £500.0m) or 22.0% (2020: 24.0%) of the Group’s
borrowings were at fixed rates excluding those relating to leases.
Interest on financial instruments at floating rates is repriced at intervals of less than six months. Interest on financial instruments at fixed
rates is fixed until the maturity of the instrument.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 184
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
25 Financial risk management objectives and policies (continued)
The table below demonstrates the sensitivity to reasonably possible changes in interest rates on income for the year when this movement
is applied to the carrying value of financial liabilities:
Effect on:
25 basis points increase
Foreign currency risk
Profit before tax
2021
3.8
2020
4.2
Given the multi-national nature of the business, the Group is exposed to foreign exchange gains and losses on its trading activities,
the net assets of its overseas subsidiaries and its non-GBP denominated financing facilities. The primary currencies that the Group is
exposed to fluctuations in are the Euro, Australian Dollar and US Dollar.
Whilst the Group does not actively hedge the foreign exposure on its trading cashflows, it continuously monitors exposures to individual
currencies, taking remediating actions as necessary to manage any significant risks as they arise. In the event that the Group anticipates
large transactions in currencies other than GBP, then forward exchange contracts are taken out to manage the potential foreign
exchange exposure.
The Group’s exposure to the translation of net assets on foreign currency subsidiaries into its reporting currency are partially offset by the
opposite exposure on the Groups financing facilities providing a natural economic hedge, even though the Group does not apply hedge
accounting. The Group’s policy on borrowings is broadly aligned to the underlying cashflows of the business.
The Group has financing facilities in GBP, Euro and US Dollars. As the Group’s overseas subsidiaries largely report in Euros, the Group has
taken out a swap contract to hedge the US dollar debt into Euros in order to align the foreign currency exposure on the Group’s financing
facilities with that on the net assets of its subsidiaries.
A 5% weakening in the Euro would reduce Group operating profit by £29.5m (2020: £22.0m) and net assets by £3.1m (2020: £7.6m)
when applied to the results of year in question.
A 5% weakening in the Australian Dollar would reduce Group operating profit by £5.6m (2020: £3.9m) and net assets by £27.9m
(2020: £22.7m) when applied to the results of year in question.
Credit risk
The Group is not subject to significant concentration of credit risk, with exposure spread across a large number of counterparties
and customers.
Receivable balances are monitored on an ongoing basis. Any changes to credit terms are assessed and authorised by senior
management on an individual basis.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents the Group’s
exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these
instruments. Credit risk in respect of cash and cash equivalents is managed by restricting those transactions to banks that have a defined
minimum credit rating and by setting an exposure ceiling per bank.
Liquidity risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of borrowings with a range of
maturities. The Group’s policy on liquidity is to ensure that there are sufficient medium-term and long-term committed borrowing facilities
to meet the medium-term funding requirements. At 31 December 2021, there were undrawn committed borrowing facilities of £515.0m
(2020: £480.0m). Total committed facilities had an average maturity of 3.2 years (2020: 3.0 years).
The total gross contractual undiscounted cash flows of financial liabilities, including interest payments, fall due as follows. Cash flows in
respect of financial guarantee contracts reflect the probability weighted cash flows.
2021
Interest bearing loans and borrowings
Other financial liabilities
Trade and other payables
Lease liabilities
Total
On demand
or within
1 year
£m
1-2 years
£m
2-5 years
£m
> 5 years
£m
199.5
37.9
487.7
87.8
812.9
1,471.9
0.4
–
59.7
1,532.0
73.9
90.6
–
115.9
280.4
794.1
1.4
–
67.1
862.6
Total
£m
2,539.4
130.3
487.7
330.5
3,487.9
Entain plc | Annual Report 2021 Financial statements 185
25 Financial risk management objectives and policies (continued)
2020
Interest bearing loans and borrowings
Other financial liabilities
Trade and other payables
Lease liabilities
Total
On demand
or within
1 year
£m
74.6
13.7
457.7
99.5
645.5
1-2 years
£m
2-5 years
£m
> 5 years
£m
643.4
177.4
–
79.6
900.4
1,575.0
0.6
–
124.6
1,700.2
–
1.0
–
81.2
82.2
Total
£m
2,293.0
192.7
457.7
384.9
3,328.3
Details of discounted contractual cash flows of leasing liabilities are set out in note 22.
Capital risk management
The primary objective of the Group’s capital management is to ensure that it maintains a credit quality that enables the Group to raise
funds at an economic interest rate and to maintain healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the
capital structure, the Group may adjust the dividend payment to shareholders, adjust borrowings, return capital to shareholders or issue
new shares.
The Group monitors capital using a net debt to EBITDA ratio (before separately disclosed items). The ratio at 31 December 2021 was 2.4
times (2020: 2.1 times). See note 27 for further details.
The Group’s funding policy is to raise funds centrally to meet the Group’s anticipated requirements. These are planned so as to mature at
different stages in order to reduce refinancing risk. The Board reviews the Group’s capital structure and liquidity periodically.
26 Financial instruments and fair value disclosures
The table below analyses the Group’s financial instruments into their relevant categories:
31 December 2021
Assets
Non-current:
Other investments
Other financial assets
Current:
Trade and other receivables
Derivative financial instruments
Cash and short-term investments (including customer funds)
Total
Liabilities
Current:
Customer balances
Interest bearing loans and borrowings
Trade and other payables
Other financial liabilities1
Lease liabilities (note 22)
Non-current:
Interest bearing loans and borrowings
Other financial liabilities1
Lease liabilities (note 22)
Total
Net financial (liabilities)/assets
Assets/
(liabilities)
at fair value
through
profit and loss
£m
Assets at
fair value
through other
comprehensive
income
£m
Amortised
cost
£m
2.0
0.3
484.1
–
487.1
973.5
(205.9)
(121.1)
(487.7)
–
(78.2)
(2,161.3)
(2.6)
(215.5)
(3,272.3)
(2,298.8)
3.3
–
–
57.4
–
60.7
–
–
–
(36.1)
–
–
(50.0)
–
(86.1)
(25.4)
Total
£m
14.2
0.3
484.1
57.4
487.1
8.9
–
–
–
–
8.9
1,043.1
–
–
–
–
–
–
–
–
–
8.9
(205.9)
(121.1)
(487.7)
(36.1)
(78.2)
(2,161.3)
(52.6)
(215.5)
(3,358.4)
(2,315.3)
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 186
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
26 Financial instruments and fair value disclosures (continued)
31 December 2020
Assets
Non-current:
Other investments
Other financial assets
Current:
Trade and other receivables
Cash and short-term investments (including customer funds)
Total
Liabilities
Current:
Customer balances
Interest bearing loans and borrowings
Trade and other payables
Derivative financial instruments
Other financial liabilities1
Lease liabilities (note 22)
Non-current:
Interest bearing loans and borrowings
Other financial liabilities
Lease liabilities (note 22)
Total
Net financial (liabilities)/assets
Assets/
(liabilities)
at fair value
through
profit and loss
£m
Assets at
fair value
through other
comprehensive
income
£m
Amortised
cost
£m
2.1
4.4
268.2
706.7
981.4
(241.1)
(14.1)
(457.7)
–
–
(89.8)
(2,085.7)
(2.2)
(248.2)
(3,138.8)
(2,157.4)
2.9
–
–
–
2.9
–
–
–
(26.1)
(147.5)
–
–
(7.1)
–
(180.7)
(177.8)
5.1
–
–
–
5.1
–
–
–
–
–
–
–
–
–
5.1
Total
£m
10.1
4.4
268.2
706.7
989.4
(241.1)
(14.1)
(457.7)
(26.1)
(147.5)
(89.8)
(2,085.7)
(9.3)
(248.2)
(3,319.5)
(2,330.1)
1. Other financial liabilities include £70.8m deferred and contingent consideration (2020: £142.1m), £2.6m of financial guarantees (2020: £2.2m) and £15.3m of ante-post liabilities
(2020: £12.5m).
Fair value hierarchy
IFRS 13 requires financial assets and liabilities recorded at fair value to be categorised in three levels according to the inputs used in the
calculation of their fair value:
– Level 1 – uses quoted prices as the input to fair value calculations
– Level 2 – uses inputs other than quoted prices, that are observable either directly or indirectly
– Level 3 – uses inputs that are not observable
The following tables illustrate the Group’s financial assets and liabilities measured at fair value after initial recognition at 31 December
2021 and 31 December 2020:
Assets measured at fair value
Derivative financial instruments
Other investments
Liabilities measured at fair value
Other financial liabilities
Net assets/(liabilities) measured at fair value
Level 1
£m
Level 2
£m
Level 3
£m
–
–
–
–
–
57.4
2.2
59.6
–
59.6
–
10.0
10.0
(86.1)
(76.1)
2021
Total
£m
57.4
12.2
69.6
(86.1)
(16.5)
Entain plc | Annual Report 2021 Financial statements 26 Financial instruments and fair value disclosures (continued)
Level 1
£m
Level 2
£m
Level 3
£m
187
2020
Total
£m
Assets measured at fair value
Other investments
Liabilities measured at fair value
Derivative financial instruments
Other financial liabilities
Net liabilities measured at fair value
–
–
–
–
2.9
5.1
8.0
(26.1)
–
(23.2)
–
(154.6)
(149.5)
(26.1)
(154.6)
(172.7)
There have been no transfers of assets or liabilities recorded at fair value between the levels of the fair value hierarchy.
Included within other financial assets and derivative financial instruments measured at fair value are; the Group's currency swaps held
against debt instruments as an asset of £57.4m (2020: liability of £26.1m), investments in Hui 10 and R&S Technology, designated as
fair value through other comprehensive income, of £5.1m (2020: £5.1m) and £3.8m (2020: £nil) respectively, an investment in Scout
Gaming of £1.1m (2020: £nil) and a convertible equity instrument with Visa Inc. for £2.2m (2020: £2.9m), both designated as fair value
through profit and loss. The fair value of the investments at 31 December 2021 and 31 December 2020 are not materially different to their
original cost.
Contingent consideration
Contingent consideration arises through business combinations, the fair value for which is reassessed at each reporting date using
updated inputs and assumptions based on the latest financial forecasts of each respective business. As at 31 December 2021 contingent
consideration included within other financial liabilities was £70.8m (2020: £142.1m) arising from the historical transactions involving the
Group’s operations in Africa, earn-out arrangements in Portugal and Australia (Neds) and amounts payable to Dusk Till Dawn in respect
of PartyPoker (2020: Dusk Till Dawn, Neds and Crystalbet). The valuation of the contingent consideration in relation to the Group’s
African business is subject to estimation uncertainty as the amount payable is based on future profitability. Whilst the amount recorded
of £50m represents management’s best estimate of the likely payment based on internal forecasts, the maximum amount payable is
capped at $309.9m. The valuation of the remaining contingent consideration is based largely on historical trading performance and
therefore involves limited estimation uncertainty.
Ante-post
Ante-post liabilities are valued using methods and inputs that are not based upon observable market data. The principal assumptions
relate to anticipated gross win margins on unsettled bets. There are no reasonably probable changes to assumptions or inputs that would
lead to material changes in the fair value determined, although the final value will be determined by future sporting results.
27 Net debt
The components of the Group’s net debt are as follows:
Current assets
Cash and short-term deposits
Current liabilities
Interest bearing loans and borrowings
Non-current liabilities
Interest bearing loans and borrowings
Accounting net debt
Cash held on behalf of customers
Fair value swaps held against debt instruments (derivative financial assets)
Deposits/ short-term investments
Balances held with payment service providers
Adjusted net debt
Lease liabilities
Net debt including lease liabilities
2021
£m
2020
£m
487.1
749.8
(121.1)
(14.1)
(2,161.3)
(1,795.3)
(2,085.7)
(1,350.0)
(205.9)
57.4
20.3
130.8
(396.1)
(26.1)
171.2
172.4
(1,792.7)
(1,428.6)
(293.7)
(338.0)
(2,086.4)
(1,766.6)
Cash held on behalf of customers represents the outstanding balance due to customers in respect of their online gaming wallets.
Included within this balance is £nil (2020: £155.0m) classified as held for sale. Included within deposits is £nil (2020: £149.5m) classified
as held for sale.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 Total
€m
Total
£m
188
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
28 Share capital
Authorised:
At 31 December 2020 and 31 December 2021
Issued and fully paid:
At 1 January 2020
Exercise of share options
At 31 December 2020
Exercise of share options
At 31 December 2021
Number of
€0.01
ordinary
shares
773,000,000
582,331,946
2,745,701
585,077,647
1,472,572
586,550,219
7.7
5.9
–
5.9
–
5.9
The Company’s share capital consists entirely of ordinary shares, accordingly all shares rank pari passu in all respects.
See note 31 for further information on terms and amounts of shares reserved for issue under options.
29 Notes to the statement of cash flows
29.1 Reconciliation of profit/(loss) to net cash inflow from operating activities:
Profit before tax from continuing operations
Net finance (income)/expense
Profit before tax and net finance expense from continuing operations
Loss before tax and net finance expense from discontinued operations
Profit before tax and net finance expense including discontinued operations
Adjustments for:
Impairment
Loss/(profit) on disposal
Depreciation of property, plant and equipment
Amortisation of intangible assets
Share based payments charge
Increase in other financial assets
Increase in trade and other receivables
Increase in other financial liabilities
Increase in trade and other payables
Decrease in provisions
Share of results from joint venture and associate
Other non-cash items
Cash generated by operations
29.2 Cash flows arising from discontinued operations:
Cash (used in)/generated from operating activities
Cash (used in)/ generated by investing activities1
Cash generated from financing activities
Net cash (outflow)/inflow arising from discontinued operations
1. Included within cash used in investment activities is £23.3m of cash disposed with business.
2021
£m
393.2
(37.4)
355.8
(14.9)
340.9
3.3
7.3
120.0
247.3
12.3
–
(73.7)
3.5
1.9
(18.5)
162.5
(3.0)
803.8
2021
£m
(5.3)
(27.5)
–
(32.8)
6.4
4.8
–
4.8
–
4.8
2020
£m
174.7
184.2
358.9
(35.7)
323.2
34.3
(6.9)
127.5
421.8
14.8
(2.3)
(161.2)
25.2
33.4
(22.7)
60.2
17.5
864.8
2020
£m
20.8
0.1
–
20.9
Entain plc | Annual Report 2021 Financial statements 189
29 Notes to the statement of cash flows (continued)
29.3 Reconciliation of movements of liabilities to cash flows arising from financing activities:
Balance at 1 January
2,099.8
338.0
2,437.8
2,116.0
363.5
2,479.5
Other
loans and
borrowings
Lease
liabilities
2021
£m
Total
Other
loans and
borrowings
Lease
liabilities
2020
£m
Total
Changes from financing cashflows
Proceeds from borrowings, net of issue costs
Repayment of borrowings
Repayment of lease liabilities1
Total changes from financing cashflows
Other changes
Interest expense
Interest paid2
New lease liabilities
Finance fees
Remeasurement adjustments
Total other changes
Arising through business combinations
The effect of changes in foreign exchange
797.2
(566.1)
–
231.1
63.3
(61.4)
–
5.8
–
7.7
–
(56.2)
–
–
(88.1)
(88.1)
14.0
(14.0)
52.0
–
(5.5)
46.5
0.9
(3.6)
797.2
(566.1)
(88.1)
143.0
77.3
(75.4)
52.0
5.8
(5.5)
54.2
0.9
(59.8)
–
(43.5)
–
(43.5)
64.2
(81.1)
–
1.3
–
(15.6)
–
42.9
–
–
(86.2)
(86.2)
16.7
(16.7)
70.9
–
(13.4)
57.5
–
3.2
–
(43.5)
(86.2)
(129.7)
80.9
(97.8)
70.9
1.3
(13.4)
41.9
–
46.1
Balance at 31 December
2,282.4
293.7
2,576.1
2,099.8
338.0
2,437.8
1. In addition to the above, the Group received £0.2m (2020: £0.3m) in respect of lease receivables resulting in a net repayment of finance leases of £87.9m (2020: £85.9m).
2. In addition to the above, the Group received £2.1m (2020: £2.3m) of interest income resulting in a net finance expense paid of £73.3m (2020: £95.3m).
Non cash movements include amounts acquired as a result of business combinations and the amortisation of issue costs incurred in
respect of debt instruments.
30 Retirement benefit schemes
Defined contribution schemes
During the year the Group charged contributions of £16.0m (2020: £13.4m) to the consolidated income statement in relation to the
defined contribution pension schemes.
Defined benefit plans
Judgement is applied, based on legal, actuarial, and accounting guidance in IFRIC 14, regarding the amounts of net pension asset that is
recognised in the consolidated balance sheet.
The Group has two defined benefit plans, the Ladbrokes Pension Plan, which is now in a buy-out position, and the Gala Coral Pension
Plan which is a final salary pension plan for UK employees and closed to new employees and future accrual.
At retirement each member’s pension is related to their “career average earning” for the Gala Coral Pension Plan. The weighted average
duration of the expected benefit payments from the Plan is around 18 years (2020: 19 years) for the Gala Coral Pension Plan.
The Plans’ assets are held separately from those of the Group. The Plans are approved by HMRC for tax purposes, and are managed by
independent Trustees. The Plans are subject to UK regulations, which require the Group and Trustees to agree a funding strategy and
contribution schedule at least every three years. Under the current contribution schedule in place, the Group does not pay contributions to
Gala Coral Pension Plan but are paying the administrative costs. As the Ladbrokes Pension Plan is in a buy-out position the Group has no
future funding obligations or ongoing administrative costs.
There is a risk to the Group that adverse circumstances, such as a disconnect between changes in asset investment values and required
funding obligations, could lead to a requirement for the Group to make additional contributions to fund any deficit that arises. As at the
date of signing the financial statements no such event has arisen.
The results of the latest formal actuarial valuation 30 June 2019 for the Gala Coral Pension Plan was updated to 31 December 2021 by
an independent qualified actuary in accordance with IAS 19 (Revised) Employee Benefits. The value of the defined benefit obligation and
current service cost have been measured using the projected unit credit method, as required by IAS 19 (Revised). Actuarial gains and
losses are recognised immediately through other comprehensive income.
During the year, the Group finalised the buy-out of the Ladbrokes pension scheme with the assets and liabilities of the scheme passed to
a third party. As the Group has extinguished its obligations to the IAS 19 liabilities, only the residual assets remaining in the scheme are
now recorded.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 190
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
30 Retirement benefit schemes (continued)
The amounts recognised in the balance sheet are as follows:
Present value of funded obligations
Fair value of plan assets
Net asset
Disclosed in the balance sheet as: Retirement
benefit asset
2021
(Coral)
2021
(Ladbrokes)
£m
(430.5)
518.6
88.1
88.1
£m
–
7.0
7.0
7.0
2021
Total
£m
(430.5)
525.6
95.1
2020
(Coral)
£m
(450.1)
506.9
56.8
95.1
56.8
2020
(Ladbrokes)
£m
(385.1)
392.5
7.4
7.4
2020
Total
£m
(835.2)
899.4
64.2
64.2
The Group has considered the appropriate accounting treatment in respect of the pension plan surplus, considering the current
agreement with the Trustees, and concluded the recognition of the surplus is appropriate. Whilst the trustees have discretionary rights
over the use of any surplus, the nature of the obligations in the plans that any surplus that exists once all liabilities have been settled are
expected to be for the benefit of the Group.
The amounts recognised in the income statement are as follows:
Analysis of amounts charged to the Income Statement
Separately disclosed items
Other administrative expenses
Net interest on net asset
Total charge/(credit) recognised
in the Income Statement
2021
(Coral)
2021
(Ladbrokes)
£m
£m
–
0.6
(0.7)
(0.1)
0.5
–
(0.1)
0.4
The actual return on plan assets over the year was a £23.1m gain (2020: £111.0m).
The amounts recognised in the statement of comprehensive income are as follows:
Actual return on assets less interest on plan assets
Actuarial gains on defined benefit obligation due to
changes in demographic assumptions
Actuarial gains/(losses) on defined benefit obligation
due to changes in financial assumptions
Experience adjustments on benefit obligation
Actuarial gains/(losses) recognised in the statement of
comprehensive income
2021
(Coral)
2021
(Ladbrokes)
£m
21.4
–
15.4
(5.6)
31.2
£m
(7.0)
–
6.1
0.9
–
Changes in the present value of the defined benefit obligation are as follows:
2021
(Coral)
2021
(Ladbrokes)
£m
(450.1)
(5.3)
£m
(385.1)
(2.6)
2021
Total
£m
0.5
0.6
(0.8)
0.3
2021
Total
£m
14.4
21.5
(4.7)
31.2
2021
Total
£m
(835.2)
(7.9)
2020
(Coral)
£m
2020
(Ladbrokes)
£m
–
(0.1)
(1.2)
(1.3)
2020
(Coral)
£m
54.6
(63.3)
4.1
2.4
1.2
(0.1)
3.5
2020
(Ladbrokes)
£m
40.3
10.4
(52.5)
6.0
2020
Total
£m
2.4
1.1
(1.3)
2.2
2020
Total
£m
94.9
10.6
(115.8)
10.1
(4.4)
4.2
(0.2)
2020
(Coral)
£m
(396.0)
(7.8)
2020
(Ladbrokes)
£m
(357.5)
(7.0)
2020
Total
£m
(753.5)
(14.8)
–
0.2
At 1 January
Interest on obligation
Actuarial gains due to changes
in demographic assumptions
Actuarial gains/(losses) due to changes
in financial assumptions
Experience adjustments on obligations
Scheme buy-out
Benefits paid
At 31 December
–
–
–
0.2
10.4
10.6
15.4
(5.6)
–
15.1
6.1
0.9
368.4
12.3
21.5
(4.7)
368.4
27.4
(63.3)
4.1
–
12.7
(52.5)
6.0
–
15.5
(430.5)
–
(430.5)
(450.1)
(385.1)
(115.8)
10.1
–
28.2
(835.2)
Entain plc | Annual Report 2021 Financial statements 191
30 Retirement benefit schemes (continued)
Changes in the fair value of plan assets are as follows:
At 1 January
Interest on plan assets
Administrative expenses
Actual return less interest on plan assets
Scheme buy-out
Benefits paid
At 31 December
2021
(Coral)
2021
(Ladbrokes)
£m
506.9
6.0
(0.6)
21.4
–
(15.1)
518.6
£m
392.5
2.7
(0.5)
(7.0)
(368.4)
(12.3)
7.0
2021
Total
£m
899.4
8.7
(1.1)
14.4
(368.4)
(27.4)
525.6
2020
(Coral)
£m
455.9
9.0
0.1
54.6
–
(12.7)
2020
(Ladbrokes)
£m
2020
Total
£m
364.2
820.1
7.1
(3.6)
40.3
–
(15.5)
16.1
(3.5)
94.9
–
(28.2)
506.9
392.5
899.4
The Group does not expect to contribute to either plan in 2022. The Group will however continue to meet the administrative expenses of
the Gala Coral Pension Plan scheme.
The major categories of plan assets as a percentage of total plan assets are as follows:
Equities and Diversified Growth Funds
Insurance policy
Liability Driven Investment
Private credit
Cash and cash equivalents
2021
(Coral)
%
25.2
–
69.3
5.1
0.4
2021
(Ladbrokes)
%
2020
(Coral)
%
2020
(Ladbrokes)
%
–
–
–
–
100.0
26.9
–
69.5
3.2
0.4
–
98.1
1.2
–
0.7
The Plan assets are held exclusively within instruments with quoted market prices in an active market with the exception of the holdings
in a private credit asset and in 2020 an insurance policy. At 31 December 2021 these represented c5.1% (2020: c.42.8%) of the Plan’s
total assets.
The Plan does not invest directly in property occupied by the Group or in financial securities issued by the Group. Although, as the Plan
holds pooled investment vehicles, there may at times be indirect employer related investment. At 31 December 2021 these represented
less than 0.1% (2020: 0.1%) of the Plan’s total assets.
The investment strategy is set by the Trustees of the Plans in consultation with the Group. For the Gala Coral Plan the current long-term
strategy is to invest in a low-risk matching bond portfolio with a relatively small investment in return seeking funds. With respect to the
Ladbrokes pension plan the majority of investment was previously held within an insurance policy that guarantees the payments of future
pension liabilities. The Ladbrokes Plan now holds only cash and cash equivalents.
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages where appropriate):
Discount rate
Price inflation (CPI)
Price inflation (RPI)
Future pension increases
– LPI 5% (CPI)
– LPI 2.5% (CPI)
2021
(Coral)
% p.a.
2021
(Ladbrokes)
% p.a.
2020
(Coral)
% p.a.
2020
(Ladbrokes)
% p.a.
1.8
2.3
3.3
3.2
2.2
n/a
n/a
n/a
n/a
n/a
1.2
1.9
2.9
2.9
2.1
1.2
1.9
2.9
2.9
2.1
Post-retirement mortality assumed for most members is based on the standard SAPS mortality table with the CMI 2018 projections
which considers future improvements, adjusted to reflect plan specific experience.
The assumption used implies that the expected lifetime of members for the two schemes is:
Male aged 65 for year ended
Female aged 65 for year ended
2021
(Coral)
2021
(Ladbrokes)
2020
(Coral)
2020
(Ladbrokes)
86.5
88.6
86.5
88.9
86.4
88.5
86.5
88.9
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 192
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
30 Retirement benefit schemes (continued)
Changes to the assumptions will impact the amounts recognised in the consolidated balance sheet and the consolidated statement of
comprehensive income in respect of the Plan. For the significant assumptions, the following sensitivity analysis provides an indication of
the impact on the defined benefit obligation for the year ended 31 December 2021:
– 0.5% p.a. decrease in the discount rate
– 0.5% p.a. increase in price inflation
– One year increase in life expectancy
2021
(Coral)
2021
(Ladbrokes)
%
9.8
6.9
4.6
%
–
–
–
2020
(Coral)
%
2020
(Ladbrokes)
%
10.3
7.7
4.5
9.1
4.7
4.1
These sensitivities have been calculated to show the movement in the defined benefit obligation in isolation, and assuming no other
changes in market conditions at the accounting date. This is unlikely in practice, for example, a change in discount rate is unlikely to occur
without any movement in the value of the assets held by the Plan.
31 Share-based payments
The following options to purchase €0.01 Ordinary Shares in the Group were granted, exercised, forfeited or existing at the year end:
Date of grant
Exercise price
16 Dec 2016
30 Mar 2017
28 Dec 2017
19 Sep 2018
26 Mar 2019
10 Jun 2020
24 Mar 2021
04 May 2021
422p
422p
0p
0p
0p
0p
0p
1264p
Existing at
1 January
2021
630,561
50,000
335,645
1,100,321
2,375,286
1,727,301
–
–
Granted
in the year
–
–
–
–
–
–
1,124,620
957,613
Cancelled
or forfeited
in the year
Exercised
in the year
Existing at
31 December
2021
Exercisable at
31 December
2021
–
–
–
(224,632)
(318,566)
(216,116)
(2,295)
–
(176,423)
(50,000)
(309,828)
(835,745)
–
–
–
–
454,138
–
25,817
39,944
2,056,720
1,511,185
1,122,325
957,613
454,138
–
25,817
39,944
–
–
–
–
519,899
Vesting
criteria
Note a
Note a
Note b
Note c
Note d
Note e
Note f
Note g
Total Schemes
6,219,114
2,082,233
(761,609)
(1,371,996)
6,167,742
Note a: 2016 MIP Scheme – These equity settled awards were issued on completion of the acquisition of bwin.party. The options vest and became exercisable, subject to the
satisfaction of a performance condition, over 30 months, with one-ninth vesting six months after the date of grant and a further ninth vesting at each subsequent quarter.
The options lapse, if not exercised, on 2 February 2026. The performance condition is comparator total shareholder return (“TSR”) of the Group against the FTSE 250. Each
ninth of the shares will have its TSR condition reviewed from the date of grant until the relevant testing date. To the extent the TSR is not met at that time, it is tested again
the following quarter and, if necessary, at the end of the 30-month vesting period. In order to vest, the TSR of the Group must rank at median or above against the FTSE 250.
Note b: 2017 LTIP Scheme – These equity settled awards were awarded to certain Directors and employees and vest over a three-year period from the date of grant. The number of
awards to vest are conditional on both cumulative Earnings Per Share (“EPS”) exceeding 180 euro cents, with a pro-rata increase in the amount vesting between 180 cents
and 214 cents, and TSR performance conditions being met which are split with equal weighting.
Note c: 2018 LTIP Scheme – These equity settled awards were awarded to certain Directors and employees and vest over a three-year period from the date of grant. The number
of awards that vested was conditional on both cumulative 3 year Earnings Per Share (“EPS”) exceeding 191p, with a pro-rata increase in the amount vesting between 191p
and 224p, and TSR performance conditions being met which are split with equal weighting.
Note d: 2019 LTIP Scheme – These equity settled awards were awarded to certain Directors and employees and vest over a three-year period from the date of grant. The number
of awards that vested was conditional on both cumulative 3 year Earnings Per Share (“EPS”) exceeding 184p, with a pro-rata increase in the amount vesting between 184p
and 214p, and TSR performance conditions being met which are split with equal weighting.
Note e: 2020 LTIP Scheme – These equity settled awards were awarded to certain Directors and employees and vest over a three-year period from the date of grant. The number
of awards to vest are conditional on both cumulative 3 year Earnings Per Share (“EPS”) exceeding 267p, with a pro-rata increase in the amount vesting between 267p and
295p, and certain TSR performance conditions being met which are split with the weighting of one third based on EPS and two thirds relating to TSR conditions. There were
also a number of restricted share plan shares issued during 2020 against which service conditions apply.
Note f: 2021 LTIP Scheme – These equity settled awards were awarded to certain Directors and employees and vest over a three-year period from the date of grant. The number
of awards to vest are conditional on both cumulative 3 year Earnings Per Share (“EPS”) exceeding 255p, with a pro-rata increase in the amount vesting between 255p and
296p, and certain TSR performance conditions being met which are split with the weighting of one third based on EPS and two thirds relating to TSR conditions.
Note g: 2021 Employee Sharesave scheme – During 2021 the Group set up an Employee Sharesave scheme. Under this scheme employees of the Group are able to subscribe up to
a maximum of £100 a month in share purchases at a discount of 20% for a vesting period of three years. The shares will vest conditional upon continued employment at the
end of the three years.
The charge to share-based payments within the consolidated income statement in respect of these options in 2021 was £12.3m
(2020: £14.8m) which related entirely to equity settled options.
Weighted average exercise price of options
The number and weighted average exercise prices of share options are as follows:
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Cancelled or forfeited in the year
Outstanding at the end of the year
Exercisable at the end of the year
Weighted
average
exercise price
31 December
2021
52p
570p
70p
0p
31p
369p
Number
of options
31 December
2021
6,219,114
2,082,233
(1,371,996)
(761,609)
6,167,742
519,899
Weighted
average
exercise price
31 December
2020
154p
0p
414p
0p
52p
295p
Number
of options
31 December
2020
9,236,748
2,045,307
(2,745,701)
(2,317,240)
6,219,114
1,016,206
Entain plc | Annual Report 2021 Financial statements 193
31 Share-based payments (continued)
The options outstanding at 31 December 2021 have a weighted average contractual life of 1.2 years (31 December 2020: 1.3 years).
Valuation of options
The fair value of services received in return for share options granted are measured by reference to the fair value of share options granted.
The Group engaged third-party valuation specialists to provide a fair value for the options.
All LTIP plans are valued using both a Black Scholes valuation model and Monte Carlo valuation for the cumulative EPS and TSR
conditions respectively.
Fair value of share options and assumptions:
Date of grant
Dec 16
Dec 17
Sep 18
Mar 19
Jun 20
Mar 21
May-21
Share price at
date of grant
Exercise price
(£)
6.48
9.34
9.14
4.96
7.86
15.25
16.46
(£)
4.22
–
–
–
–
–
12.64
Expected
volatility
%
28%-30%
26.6%
33.7%
31.5%
33.2%
52.8%
51.3%
Exercise
multiple
Expected
dividend yield
Risk free rate
%
Fair value at
measurement
date
(£)
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
2.0%
2.0%
1.43 – 1.94
–
7.39 – 9.34
0.40%
4.58 – 9.14
1.00%
1.90 – 4.96
0.70%
0.30%
3.54 – 7.86
0.01% 10.03 – 11.27
6.75
0.02%
32 Business Combinations
Business combinations are accounted for using the acquisition method. Identifiable assets and liabilities acquired, and contingent
liabilities assumed in a business combination are measured at their fair values at the acquisition date. The identification and valuation of
intangible assets arising on business combinations is subject to a degree of judgement. We engaged independent third parties, including
Duff & Phelps to assist with the identification and valuation process. Duff & Phelps have utilised a Relief from Royalty Method and the
Excess Earnings Method approach to determine the fair value of acquired intangibles. This was performed in accordance with the Group’s
policies. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable assets acquired is recorded as
goodwill. Costs related to the acquisition are expensed as incurred, see note 6 for details.
Summary of acquisitions:
Enlabs
On 30 March, the Group acquired 95.9% of the share capital of Enlabs AB. The acquisition of the share capital resulted in control
being obtained and as a result Enlabs is consolidated as a subsidiary from this date forward. Enlabs operates predominantly via an
online platform across sports betting and gaming markets and provides the Entain Group with access to the regulated Baltic markets.
Consideration consisted of £304.5m for its 95.9% share in Enlabs with £14.2m recognised as a non-controlling interest within equity for
the 4.1% of remaining holding not acquired by the Group. During Q4 the Group acquired the remaining share capital of Enlabs AB leaving
a small non-controlling interest in one of the historic acquisitions performed by Enlabs prior to the Entain acquisition.
Bet.pt
On 31 March, the Group acquired 100% of the share capital of Entertainment Technologies Group Limited which owns the Bet.pt
business, an online sports betting and gaming business operating in Portugal. The acquisition of the Bet.pt brand provides the Group with
access to the regulated Portuguese market. In accordance with IFRS 3, as control has been obtained, the business has been consolidated
from this point forwards. Including relevant adjustments for the net debt acquired with the business and potential payments under
contingent arrangements, consideration amounted to £51.3m.
Impala
During the year, the Group established a 51% owned subsidiary GVC (Impala) Limited, subsequently renamed Impala Digital Limited,
(“Impala Digital”). On 29 March 2021, Impala Digital acquired the trade and assets of a B2B business operating in the African betting
and gaming market for $40m. This acquisition provides the Entain Group with a platform with which the Group can access the African
market. In accordance with IFRS 3, as the Entain Group exercises control, Impala Digital has been consolidated within the Group
financial statements.
The shareholder agreement for Impala Digital provides an opportunity for the Group to purchase the remaining 49% of share capital.
Based on the expectation that the second completion requirements will be met, a financial liability has been recorded at £50.0m
at acquisition. The estimate of the financial liability was based on forecast results and the likely payment due under the second
completion conditions with £50m still provided at the year end. The shareholder agreement contains a cap of $309.9m in relation to the
second purchase.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 194
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
32 Business Combinations (continued)
Finnplay
On 1 April 2021, the Group acquired 100% of the share capital of Finnplay Technologies Oy, the platform provider for the Ninja brand of
Enlabs for £10.3m. In accordance with IFRS 3, the business has been consolidated from this point forwards.
Unikrn
On 19 October 2021, the Group acquired the trade and assets of the Unikrn business for $72.2m. Unikrn provides the Group with a
platform and expertise to enter the esports market. In accordance with IFRS 3 the Unikrn businesses results are consolidated from the
point of acquisition.
Given the proximity of some of the acquisitions to the period end and as permitted by IFRS 3 “Business Combinations”, the fair value of
the acquired identifiable assets and liabilities have been presented on a provisional basis. Fair values were determined on the basis of an
initial assessment performed by an independent professional expert.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Intangible assets (excluding goodwill)
Property, plant and equipment
Investments
Trade and other receivables
Cash and cash equivalents
Deferred tax asset
Deferred tax liability
Trade and other payables
Lease liabilities
Total
Net assets acquired
Goodwill
Total net assets acquired
Consideration:
Cash
Non-controlling interests
Deferred and contingent consideration
Total consideration
Provisional
fair value
£m
218.5
3.3
2.9
12.6
22.3
0.5
(32.7)
(31.3)
(0.9)
195.2
195.2
273.1
468.3
436.5
14.2
17.6
468.3
The acquired businesses contributed revenues of £99.4m and profit before tax of £19.9m.
Had the acquisitions occurred on the first day of the financial year the revenue for the Group would have been £3,916.1m with a profit
before tax of £401.1m.
Non-controlling interests have been stated at their fair value on acquisition, which has been determined by reference to the amount paid
for the Group’s controlling interest.
Included in the valuation of goodwill is the value attributed to acquired workforce, and the benefit of future trading potential including
synergies arising as part of the acquisition.
33 Commitments and contingencies
Contingent liabilities
Guarantees have been given in the ordinary course of business in respect of loans and derivative contracts granted to subsidiaries
amounting to £500.0 million (31 December 2020: £500.0 million).
Entain plc | Annual Report 2021 Financial statements 195
33 Commitments and contingencies (continued)
HMRC investigation
On 28 November 2019, one of our UK subsidiaries, GVC Holdings (UK) Limited, received a production order from HM Revenue & Customs
("HMRC") requiring it to provide information relating to the group's former Turkish facing online gambling business, sold in 2017. At that
time, the Group understood that HMRC's investigation was directed at a number of former third party suppliers, relating to the processing
of payments for online gambling in Turkey. On 21 July 2020, GVC Holdings Plc announced that HMRC was widening the scope of its
investigation and was examining potential corporate offending by the GVC group. It had previously been understood that no Group
company was a subject of HMRC's investigation. Through ongoing engagement with HMRC we understand that the Group remains a
corporate suspect and that the offences under investigation include, but are not limited to, offences under sections 1 and 7 of the Bribery
Act 2010. The Group continues to co-operate fully with HMRC's enquiries, which are ongoing.
In addition to the items discussed above, the Group is subject to number of other potential litigation claims that arise as part of the normal
course of business and continue to arise in 2022. Provision has not been made against these claims as they are either not considered
likely to result in an economic outflow or they do not represent an obligation at the year end date. Consistent with any claims of this
nature there can be uncertainty with the final outcome.
For a discussion of the current position of the Group in relation to Greek tax, refer to note 18.
34 Related party disclosures
Other than its associates and joint venture, the related parties of the Group are the Executive Directors, Non-Executive Directors and
members of the Executive Committee of the Group.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not
disclosed in this note. Transactions between the Group and its associates and joint venture and other related parties are disclosed below.
During the year, Group companies entered into the following transactions with related parties who are not members of the Group:
Equity investment
– Joint venture1
Sundry expenditure
– Associates2
1. Equity investment in BetMGM.
2. Payments in the normal course of business made to Sports Information Services (Holdings) Limited and bwin eK Neugersdorf.
Details of related party outstanding balances:
Other amounts outstanding
– Associates
2021
£m
2020
£m
164.4
59.3
61.8
56.6
2021
£m
2020
£m
0.1
0.1
Terms and conditions of transactions with related parties
Sales to, and purchases from, related parties are made at market prices and in the ordinary course of business. Outstanding balances
at 31 December 2021 are unsecured and settlement occurs in cash. For the year ended 31 December 2021, the Group has not raised
any provision (2020: £nil) for doubtful debts relating to amounts owed by related parties as the payment history has been good.
This assessment is undertaken each financial year through examining the financial position of the related party and the market in which
the related party operates.
Transactions with Directors and key management personnel of the Group
For details of Directors’ remuneration please refer to the Directors’ remuneration table included on pages 134 to 140 of this report.
The remuneration of key management personnel is set out below in aggregate for each of the categories specified in IAS 24 Related
Party Disclosures. Key management personnel comprise Executive Directors, Non-Executive Directors and members of the Executive
management team. Further information about the remuneration of individual Directors is provided in the Directors’ remuneration report.
Short-term employee benefits
Share-based payments
Total compensation paid to key management personnel
2021
£m
9.7
5.2
14.9
2020
£m
5.8
7.3
13.1
Peter Isola is a director of Europort (International) Holdings Limited and Europort Five Limited, a property firm in Gibraltar which charged
rental expenses of £2.6m to the Group during the year (2020: £2.5m).
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 196
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
34 Related party disclosures continued
The consolidated financial statements include the financial statements of Entain plc and its subsidiaries. The companies listed below are
those which were part of the Group at 31 December and therefore the results, cash flows and balance sheets of all subsidiaries listed are
consolidated into the Group financial statements, furthermore the results of joint ventures and associates are accounted for in accordance
with the policy set out in note 4.
Subsidiaries based in the United Kingdom
% equity interest
Registered address
3rd Floor
One New Change,
London,
United Kingdom,
EC4M 9AF
Company
Arthur Prince (Turf Accountants) Limited(5)
Bartletts Limited(5)
Birchgree Limited(4)(6)
Bloxhams Bookmakers Limited(5)
Brickagent Limited(5)
Cashcade Limited(6)
CE Acquisition 1 Limited(4)(6)
Chas Kendall (Turf Accountant) Limited(5)
Choicebet Limited(5)
C L Jennings (1995) Limited(5)
Competition Management Services Co. Limited(5)
Coral (Holdings) Limited(4)(6)
Coral (Stoke) Limited(5)
Coral Estates Limited(6)
Coral Eurobet Limited(6)
Coral Eurobet Holdings Limited(4)(6)
Coral Group Limited(4)(6)
Coral Group Trading Limited(4)(6)
Coral Limited(4)(6)
Coral Racing Limited(4)(6)
Coral Stadia Limited(4)(5)
E.F. Politt & Son Limited(5)
Entain Services Limited(5)
Forestal Land, Timber and Railways Company Limited (The)(5)
Forster’s (Bookmakers) Limited(5)
Gable House Estates Limited(5)
Ganton House Investments Limited(6)
Greatmark Limited(5)
Electraworks Maple Limited(5)
Entain Holdings (UK) Limited(1)(2)(4)
Entain Marketing (UK) Limited(4)
Hillford Estates Limited(5)
Impala Digital Limited(3)(4)
Hindwain Limited(6)
Interactive Sports Limited(6)
J G Leisure Limited(5)
J. Ward Hill & Company(5)
Jack Brown (Bookmaker) Limited(6)
Jerusalem Development (Mamilla) Co. Limited(5)
Jerusalem Development Corporation (Holdings) Limited(4)(5)
Joe Jennings (1995) Limited(5)
Joe Jennings Limited(5)
Krullind Limited(5)
Ladbroke & Co., Limited(5)
Ladbroke (Rentals) Limited(5)
Ladbroke City & County Land Company Limited(4)(5)
2021
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
97.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
97.5
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2020
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
97.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
97.5
–
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Entain plc | Annual Report 2021 Financial statements 34 Related party disclosures continued
Registered address
Company
Ladbroke Coral Corporate Director Limited(5)
Ladbroke Coral Corporate Secretaries Limited(5)
Ladbroke Dormant Holding Company Limited(4)(5)
Ladbroke Entertainments Limited(6)
Ladbroke Group(4)(5)
Ladbroke Group Homes Limited(5)
Ladbroke Group International(5)
Ladbroke Group Properties Limited(4)(5)
Ladbroke Land Limited(5)
Ladbroke Leasing (South East) Limited(5)
Ladbroke Racing (South East) Limited(5)
Ladbroke US Investments Limited(4)(5)
Ladbrokes (CLJEA) Limited(5)
Ladbrokes (CLJHC) Limited(5)
Ladbrokes (CLJSW) Limited(5)
Ladbrokes Betting & Gaming Limited(2)(3)(4)
Ladbrokes Contact Centre Limited(5)
Ladbrokes Coral Group Life Benefits Trustee Limited(5)
Ladbrokes Coral Group Limited(2)(4)
Ladbrokes CPCB Limited(5)
Ladbrokes E-Gaming Limited(5)
Ladbrokes Group Finance plc(2)
Ladbrokes Group Holdings Limited(4)(5)
Ladbrokes Investments Holdings Limited(4)(5)
Ladbrokes IT & Shared Services Limited(5)
Ladbrokes PT Limited(5)
Ladbrokes Trustee Company Limited(6)
Lightworld Limited(4)(5)
London & Leeds Estates Limited(5)
Margolis and Ridley Limited(5)
New Angel Court Limited(5)
Paddington Casino Limited(5)
Reg.Boyle Limited(5)
Reuben Page Limited(4)(5)
Romford Stadium Limited(5)
Rousset Capital Limited(6)
Sabrinet Limited(5)
Sponsio Limited(4)(5)
Sporting Odds Limited(2)(3)
Sportingbet (IT Services) Limited(5)
Sportingbet (Management Services) Limited(5)
Sportingbet (Product Services) Limited(5)
Sportingbet Holdings Limited(5)(6)
Sportingbet Limited(5)(6)
Sports (Bookmakers) Limited(5)
Techno Land Improvements Limited(5)
Town and County Factors Limited(5)
Travel Document Service(4)(5)
Vegas Betting Limited(5)
Ventmear Limited(5)
197
% equity interest
2021
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
93.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2020
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
93.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 198
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
34 Related party disclosures continued
Registered address
35 Great St. Helen’s
London, United Kingdom
EC3A 6AP
77A Andersonstown Road
Belfast
BT11 9AH
Subsidiaries based overseas
Registered address
Belmont Chambers
Road Town
Tortola
British Virgin Islands
Company
Techno Limited
Ladbrokes (Northern Ireland) (Holdings) Limited(4)(6)
Ladbrokes (Northern Ireland) Limited(5)
North West Bookmakers Limited(2)(3)
Company
Creative Trend Limited
CTL Holdings International Limited(4)
SRL Holdings International Limited(4)
Sunrise Resources Limited
Jayla Place, Wickhams Cay 1, Road Town, Westman Holdings Limited
Tortola, British Virgin Islands
% equity interest
2021
84.0
100.0
100.0
100.0
2020
84.0
100.0
100.0
100.0
% equity interest
2021
100.0
100.0
100.0
100.0
100.0
2020
100.0
100.0
100.0
100.0
100.0
GVC Technology Consulting (Asia) Co Limited
100.0
100.0
13/F, Gloucester Tower
The Landmark
15 Queen’s Road
Central Hong Kong, China
Inchalla, Alderney, GY9 3UL, Guernsey
1st Floor, Otter House
Naas Road, Dublin 22
Ireland
ElectraWorks (Alderney) Limited
Ladbroke (Ireland) Limited(2)(3)(4)
25/28 North Wall Quay, Dublin 1,
D01 H104, Ireland
Fort Anne Limited(1)
M.L.B. Limited
Menahem Begin Road
121 &125
Tel Aviv, Jaffa, Israel
Via Alessandro Marchetti No.105
Rome 00148, Italy
1st Floor, Liberation House
Castle Street,
St. Helier, JE1 1GL, Jersey
461-473 Lutwyche Road
Lutwyche
Queensland
QLD 4030
Australia
IFC 5, ST. HELIER, JE1 1ST, Jersey
Chaussée de Wavre 1100/3
1160 Auderghem
Belgium
Gala Interactive (Services) Limited
GVC Impala R&D Limited
Ladbrokes Israel Limited(2)
Eurobet Holding SRL(4)
Eurobet Italia SRL(2)(3)
Ladbroke (Channel Islands) Limited(3)
Gaming Investments Pty Limited(4)
Entain Australia Pty Ltd(2)(3)
LB Australia Holdings Pty Limited(4)
Neds.com.au Pty Ltd
Neds International Pty Ltd(2)(3)
GVC Finance Limited
Maple Court Investments (Jersey) Limited(5)
PartyGaming Finance Limited
Ladbroke Belgium S.A.(4)
Pari Mutuel Management Services S.A.
Redsports.be SPRL
S.A. Derby N.V.(2)(3)(4)
Tierce Ladbroke S.A.(3)
29 Avenue Lavoisier, 1300 Wavre, Belgium Professional Gaming Services Sprl
6F Tower 3 Double Dragon Plaza EDSA
Ext. cor. Macapagal Avenue, Pasay City,
Philippines
InteractiveSports Asia Limited Inc.
NCH Customer Support Services, Inc
100.0
100.0
100.0
100.0
100.0
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
–
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Entain plc | Annual Report 2021 Financial statements 34 Related party disclosures continued
Registered address
24A 18th Street
Menlo Park, Pretoria
0081, South Africa
Castello 82 4 IZQ, 28006, Madrid, Spain
270 E. Park Street, Suite 1 Butte,
Montana 59701
608 Lander Street
Reno Nevada 89509, United States
15 Agion Omologiton, Nicosia, 1080,
Cyprus
1565 Carling Avenue, Suite 400, Ottawa,
Ontario K1Z 8R1
19 Boulevard Malesherbes, 75008, Paris,
France
2nd Floor, St Mary's Court, 20 Hill Street,
Douglas, IM1 1EU, Isle of Man
32 Athol Street, Douglas, IM1 1JB,
Isle of Man
820 Bear Tavern Road, Trenton,
New Jersey, 08628, USA
701 S. Carson Street, Suite 200,
Carson City, 89701, Nevada
Harborside Plaza 3, 210 Hudson Street,
Jersey City, New Jersey 07311
Company
Ladbrokes (SA) (Pty) Limited
Ladbrokes Betting and Gaming Spain, S.A.
Ladbrokes Holdco, Inc.(4)
Stadium Technology Group, LLC(3)
Bellingrath Enterprises Limited
Canada Limited
B.E.S. S.A.S
Entain (IOM) Limited(1)
bwin.party (USA) Inc
bwin.party entertainment (NJ) LLC
bwin.party services (NJ) Inc
Ladbrokes Subco LLC
GVC Holdings (USA) Inc
50 Raffles Place, 32-01 Singapore Land
Tower, Singapore (048623)
Cozy Games Pte Limited
Florent Pte Limited
55 Nikola Vaptsarov Blvd, Office Park
Expo 2000, Building Phase 4, Floor 3,
Lozenets Area, Sofia 1407, Bulgaria
GVC Services (Bulgaria) EOOD
Cozy Games Management Limited(5)
100.0
100.0
199
% equity interest
2021
60.0
2020
60.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
90.0
100.0
100.0
100.0
90.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
5th Floor, Divyasree Omega, Block - B,
IVY Comptech Private Limited
100.0
100.0
Hitec City Road, Kondapur, Hyderabad,
Andhra Pradesh, 500081, India
6th Floor, Divyashree omega, Block-B,
Plot No. 13/E, Survey no.13(part),
Kondapur, Hyderabad, 500081, Andhra
Pradesh, India
85 St John Street, Valletta, VLT 1165,
Malta
68, Tower Road, Sliema,
SLM – 1606, Malta
Avenida de Fuencarral 44, Edificio
Tribeca 1, modulo B, CP 28108,
Alcobendas, Madrid, Spain
Bertolt - Brecht - Allee 24, 01309,
Dresden, Germany
IVY Foundation Limited
IVY Global Shared Services Private Limited
IVY Software Development Services Private Limited
Entain Holdings (Malta) Limited
Gaming VC Corporation Limited
bwin.gr Limited(2)
Headlong 2 Limited(1)
Scandic Bookmakers Limited
Spread Your Wings Bravo Limited
VistaBet Limited(2)
Entertainments Technologies Group Limited(4)
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.0
99.0
100.0
99.0
99.0
100.0
–
Winner Apuestas S.A.
100.0
100.0
DSG Deutsche Sportwelt GmbH
100.0
100.0
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 200
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
34 Related party disclosures continued
Registered address
Schwanthalerstrasse 73,
80336 Munich, Germany
Company
Entain (Germany) GmbH
Box 3095, 350 33 Växjö, Sweden
Webdollar Sweden AB
bwin.party Games AB
% equity interest
2021
100.0
100.0
100.0
2020
–
100.0
100.0
c/o Kilpatrick Townsend & Stockton
Advokat KB, Box 5421, 114 84
Stockholm, Sweden
Calle Amador de los Ríos n°1, 6 planta,
28010 Madrid, Spain
c/o The Corporation Trust Company,
1209 Orange Street, County of New
Castle, Wilmington, Delaware, 19801,
USA
Calle Josep Plá, número 2, planta 5ªD,
Edificio Torre Diagonal Litoral, 08019,
Barcelona
Century House, 12 Victoria Street,
Alderney, GY9 3UF, Channel Islands
Emancipatie Boulevard Dominico F.
“Don” Martina 29, Curaçao
Fruebjergvej 3, Copenhagen, 2100,
Denmark
Lagoas Park, Edificio 11, Piso 0 Sul,
2740-244, Porto Salvo, Portugal
bwin Interactive Marketing Espana S.L.
100.0
100.0
GVC Finance LLC(1)
100.0
100.0
Javari Marketing Consultancy Services S.L.
100.0
100.0
Interactive Sports (C.I.) Limited
GVC Services BV
100.0
100.0
100.0
100.0
Interactive Sports (Denmark) ApS
100.0
100.0
Infield – Servicos de Consultoria Marketing Unipessoal LDA.
100.0
100.0
Av. Dos Combatentes, no.
Gobet Entretenimento SA(3)
43-5 A, 1600-042 Lisbon, Portugal
Entain Operations Portugal SA
Marxergasse 1b, 1030 Vienna, Austria
bwin.party services (Austria) GmbH
Websports Entertainment Marketing Services GmbH
Penthouse, Palazzo Spinola Business
Centre, Number 46, St Christopher
Street, Valletta, VLT 1464, Malta
bwin (Deutschland) Limited
bwin Holdings (Malta) Limited(1)
bwin.party services (Malta) Limited
bwin.party holding Malta Limited
bwin.party International Malta Limited
ElectraWorks (France) Limited
ElectraWorks (Kiel) Limited
ElectraWorks (Malta) PLC
ElectraWorks (Svenska) Limited
ElectraWorks Europe Ltd
Gamebookers (Deutschland) Limited
Ladbrokes (Deutschland) Limited
Martingale Europe Limited
Martingale Malta 2 Limited
Sportingbet (Deutschland) Limited
Oficina nr.201-2015, edeficio@3, ruta 8,
Gomifer S.A.
km. 17,500, Uruguay
Quay House, South Esplanade St, Peter
Port, Guernsey, GY1 4EJ, PO Box 132
Longfrie Limited
Sea Meadow House, Blackburne
Highway, Road Town, Tortola, British
Virgin Islands, PO BOX 116
Suite 4, Constantia House, Steenberg
Office Park, Constantia, 7800, South
Africa
Wavecrest Providers Limited(5)
Main Street 1013 Pty Limited
SBT Software Operations (SA) (Pty)
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
–
–
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Entain plc | Annual Report 2021 Financial statements 34 Related party disclosures continued
Registered address
Vake District, Kavtaradze Str., No 5,
Entrance 2, Floor 2, Office Space No 2,
Tbilisi, Georgia
Company
MARS LLC(2)(3)
Via Gaetano Previati 9, 20149, Milan,
Italy
bwin European Markets Holding SpA
bwin Italia S.R.L.(3)
Rruga Dervish Hirna, Ada Tower,
nr.pasurie 6/55-N, 8160 Albania
Suite 6, Atlantic Suites, Europort Avenue,
Gibraltar
LevTech Shpk
Balltree (International) Limited(5)
Bingo Marketing Limited
bwin.party holdings Limited
bwin.party services (Gibraltar) Limited
Claymore Interactive Entertainment Holdings Limited(5)
Coral Interactive (Gibraltar) Limited(5)
ElectraGames Limited
ElectraWorks Limited(2)(3)
Entain Holdings Limited(5)
Gala Coral Interactive (Gibraltar) Limited(4)(5)
Gala Interactive (Gibraltar) Limited(4)(5)
Greyjoy Limited
Entain Corporate Services Limited
Entain Holdings (Gibraltar) Limited(1)
Entain Operations Limited
EntainTrustees Limited
IGM Domain Name Services Limited
ISG (Gibraltar) Limited
ITL Holdings Limited
LC International Limited(2)(3)(4)
PartyGaming IA Limited(5)
Stora Gatan 46, Sigtuna
Kommun, 19330, Sweden
120, The Strand, Unit 6. Triq
Ix-Xatt, Gzira GZR, 1027,
Malta
Royal Park Serviced Office,
Frosundaviks alle 15, 16903
Solna, Sweden
Zalgurio g. 96-101, Vilnius,
Lithuania
Republic of Belarus, 220039,
Minsk, 20 Chkalov Str.
Premise 98, Office 1
Office 13, 39 Dzhona
Makkeina Street, Kyiv,
01042, Ukraine
Baltic Gaming AB
Enlabs AB(4)
Entraction AB
Kama Net AB(3)
Lifland Gaming AB
NLI AB
Score24 AB(3)
BestBet Limited(3)
Elec Games C1 Limited(3)
Elec Games Holdings Limited(4)
Elec Games Limited(3)
Future Lead Generation Limited(4)
Lifland Holdings Limited(4)
Ninja Global Limited(3)
West African Gaming Limited(5)
Scout Gaming AB(3)
UAB Baltic Bet(3)
OOO Optibet(3)
Ninja Casino TOB
201
% equity interest
2021
100.0
100.0
100.0
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
97.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2020
51.0
100.0
100.0
–
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 202
Notes to the consolidated financial statements continued
for the year ended 31 December 2021
34 Related party disclosures continued
Registered address
Company
Setekles iela, 2B, Riga, LV-
1050, Latvia
Unioninkatu 24, Helsinki,
00130, Finland
Lootsa tn 1a, Lasnamae
Linnaosa, 11415, Estonia
SIA Laimz(3)
SIA Optibet(3)
Finnplay Technologies Oy
Ninja Global OU(5)
Optiwin OU(3)
% equity interest
2021
100.0
100.0
100.0
100.0
100.0
2020
–
–
–
–
–
–
1. Company that is directly owned by Entain PLC.
2. Company that forms part of the Group as at 31 December 2021 and which, principally affected the Group’s reported results for the year.
3. Trading entity engaged in activity associated with betting and gaming.
4. Holding company.
5. Dormant company.
6. Company which the Group expects to exempt from the requirements of the Companies Act 2006 relating to the audit of individual financial statements by virtue of section 479A.
As a result, the Group guarantees all outstanding liabilities to which the subsidiary is subject.
Joint ventures
Registered address
Corporation Service Company,
251 Little Falls Drive,
Wilmington,
Delaware 19808
Associates
Company
BetMGM, LLC
Country of incorporation
Company
China
Germany
Belgium
United Kingdom
Asia Gaming Technologies (Beijing) Co., Ltd(1)
Asia Gaming Technologies (Tianjin) Co., Ltd(1)
Asia Gaming Technologies Limited
bwin E.K. Neugersdorf
Gran Casino de Dinant SA
Infiniti Casino Oostende NV
Leaderbet NV
Draw & Code Limited
Games For Good Causes PLC
Lucky Choice Limited(2)
Sports Information Services (Holdings) Limited
% equity interest
2021
50.0
2020
50.0
% equity interest
2021
49.0
49.0
49.0
50.0
20.0
20.0
20.0
40.0
36.3
66.6
23.4
2020
49.0
49.0
49.0
50.0
–
–
–
–
36.3
66.6
23.4
1. Subsidiary of Asia Gaming Technologies Limited.
2. Entain PLC hold 66.6% of the equity of the investment. The associate is not consolidated in the Group financial statements on the basis that the Group does not exercise
management control over the associate.
Entain plc | Annual Report 2021 Financial statements 203
35 Non-controlling interests
During the year the Group acquired a non-controlling interest in Enlabs AB as a result of the acquisition disclosed in note 32.
Subsequently, the Group purchased the remaining non-controlling interests in Crystalbet (acquired in 2018) and Enlabs AB. Following the
purchase of the non-controlling interest in Enlabs AB and Crystalbet, the Group continues to hold non-controlling interests in Entraction
AB (a subsidiary of Enlabs AB) and Impala Digital Limited.
At 31 December 2020 non-controlling interests consisted principally of Crystalbet.
The total assets relating to subsidiaries with a non-controlling interest were £54.5m (2020: £42.4m) of which there were related liabilities
of £37.1m (2020: £25.3m).
The profit attributable to non-controlling interests was £11.4m (2020: £21.6m).
The balance of retained earnings attributable to non-controlling interest is disclosed in the table below:
As at January 2020
Profit attributable to non-controlling interests
Payment of dividends
As at 31 December 2020
Profit attributable to non-controlling interests
Business combinations
Purchase of non-controlling interests
Payment of dividends
As at 31 December 2021
36 Subsequent Events
Total
£m
43.1
21.6
(12.4)
52.3
11.4
14.2
(52.0)
(24.5)
1.4
Given the more certain medium-term outlook, the Group has taken the decision to repay the £44m received under the Coronavirus Job
Retention Scheme (“furlough scheme”) in FY21. The scheme was a sensible and highly welcome policy intervention that helped us, as one
of the country’s largest retailers, to maintain the livelihoods of more than 14,000 retail colleagues on full pay. We have kept the situation
under review since we first made use of the scheme and are pleased to be in a position to repay these monies.
Following the year end, the Group announced the acquisition of Deis Ltd ("Avid Gaming") for CAD300 million from Middlebrook
Investments Limited. Avid Gaming owns Sports Interaction, Canada's leading online sports betting brand. It is headquartered in Jersey
(Channel Islands), with offices in the Mohawk Territory of Kahnawà:ke and Ireland.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 204
Company income statement
for the year ended 31 December 2021
Other operating income
Dividends received
Operating expense
Operating profit before separately disclosed items
Separately disclosed items
Profit/(loss) before tax and net finance expense
Finance expense
Finance income
Gains/(losses) arising from change in fair value of financial instruments
Losses arising from foreign exchange on debt instruments
Profit/(loss) before tax
Income Tax
Profit/(loss) for the year
All items included above relate to continuing operations.
There were no other items of comprehensive income in the year.
The notes on pages 207 to 211 form an integral part of these financial statements.
Note
5
6
7
7
7
7
8
2021
£m
14.6
192.5
(16.5)
190.6
(12.1)
178.5
(3.5)
14.4
77.4
(0.1)
266.7
0.6
267.3
2020
£m
12.2
–
(11.5)
0.7
(31.2)
(30.5)
(2.8)
22.9
(59.8)
(10.5)
(80.7)
–
(80.7)
Entain plc | Annual Report 2021 Financial statements Company balance sheet
at 31 December 2021
Assets
Non-current assets
Investments
Trade and other receivables
Interest bearing loans and borrowings
Current assets
Trade and other receivables
Derivative financial assets
Interest bearing loans and borrowings
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Derivative financial liability
Net current (liabilities)/assets
Non-current liabilities
Trade and other payables
Net assets
Shareholders’ equity
Called up share capital
Share premium account
Merger reserve
Retained earnings
Total shareholders’ equity
205
(Company number 4685V)
Note
2021
£m
2020
£m
10
11
13
11
13
12
12
15
4,372.1
650.9
6.8
5,029.8
97.5
57.3
–
0.3
155.1
4,008.6
–
6.7
4,015.3
1,013.6
–
0.6
2.9
1,017.1
5,184.9
5,032.4
(744.3)
(7.5)
(751.8)
(875.3)
(26.0)
(901.3)
(596.7)
115.8
(594.0)
(594.0)
(566.9)
(566.9)
3,839.1
3,564.2
4.8
1,207.3
2,527.4
99.6
3,839.1
4.8
1,206.6
2,527.4
(174.6)
3,564.2
Under the Companies Act 2006 section 49 (Isle of Man), the Directors are satisfied that the Company satisfies the solvency test for
distributions to be made.
The notes on pages 207 to 211 are an integral part of these financial statements.
The financial statements on pages 204 to 211 were approved by the Board of Directors on 3 March 2022 and signed on its behalf by
J Nygaard-Andersen
Chief Executive Officer
R Wood
Deputy Chief Executive Officer/Chief Financial Officer
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 206
Company statement of changes in equity
for the year ended 31 December 2021
At January 2020
Loss for the year
Total comprehensive expense
Share options exercised
Share-based payments charge
At 31 December 2020
Profit for the year
Total comprehensive expense
Share options exercised
Share-based payments charge
At 31 December 2021
Called
up share
capital
£m
Share
premium
account
£m
Merger
Reserve
account
£m
Retained
earnings
£m
Total
£m
4.8
1,198.0
2,527.4
(106.0)
3,624.2
–
–
–
–
–
–
8.6
–
–
–
–
–
(80.7)
(80.7)
–
12.1
(80.7)
(80.7)
8.6
12.1
4.8
1,206.6
2,527.4
(174.6)
3,564.2
–
–
–
–
–
–
0.7
–
–
–
–
–
4.8
1,207.3
2,527.4
267.3
267.3
–
6.9
99.6
267.3
267.3
0.7
6.9
3,839.1
The notes on pages 207 to 211 form an integral part of these financial statements.
Entain plc | Annual Report 2021 Financial statements 207
Notes to the Company financial statements
for the year ended 31 December 2021
1 General information
Entain PLC (“the Company”) is a limited company incorporated and domiciled in the Isle of Man. The address of its registered office and
principal place of business is disclosed in the Directors’ report.
The financial statements of the Company for the year ended 31 December 2021 were authorised for issue in accordance with a resolution
of the Directors on 3 March 2022.
The Company has taken advantage of the exemption from preparing a cash flow statement under paragraph 8(g) of the disclosure
exemptions from EU-adopted IFRS for qualifying entities included in Financial Reporting Standard 101 Reduced Disclosure Framework
(FRS 101). The Entain PLC consolidated financial statements for the year ended 31 December 2021 contain a consolidated statement of
cash flows.
The Company is exempt under paragraph 8(k) of the disclosure exemptions from EU-adopted IFRS included in FRS 101 for qualifying
entities from disclosing related party transactions with entities that form part of the Entain PLC group of which Entain PLC is the ultimate
parent undertaking.
The Company’s financial statements are presented in Pounds Sterling (£). All values are in millions (£m) rounded to one decimal place
except where otherwise indicated. The Company’s financial statements are individual entity financial statements.
2 Basis of preparation
These financial statements were prepared in accordance with FRS 101 and Isle of Man Companies Act 2006. The financial statements
are prepared on a going concern basis under the historical cost convention except for certain financial liabilities measured at fair value.
For details on the going concern considerations made, see note 2 of the consolidated financial statements.
The accounting policies which follow in note 3 set out those policies which apply in preparing the financial statements for the year ended
31 December 2021 and have been applied consistently to all years presented.
The Company has taken advantage of the following disclosure exemptions under FRS 101 in respect of:
(a) IFRS 3 Business Combinations;
(b) the requirements of IFRS 7 Financial Instruments: Disclosures;
(c) IFRS 13 Fair Value Measurement;
(d) Share-based payments;
(e) Intra-Group-related party transactions;
(f) Related party transactions.
For details of audit fees, see note 7 of the consolidated financial statements.
The Directors have identified that it is appropriate to present the majority of amounts owed by other Group undertakings as non-current
assets; this is on the basis that whilst all amounts due from Group companies are repayable on demand the expectation is that only
£97.5m will be settled within one year of the balance sheet date. In making this assessment in the current year, the Directors have
identified that the majority of the £1,009.8m amount receivable from Group companies in the comparative period should also have been
presented as non-current assets. The Directors consider that the key metrics to the users of the Company financial statements are total
assets and net assets and as this change has no impact on either of these metrics, and no impact on the Company’s reported profit or
loan covenants, the Directors have concluded that the impact on the financial statements is not material and therefore the prior year
balance has not been restated.
3 Summary of significant accounting policies
Investments
Investments comprise interests in subsidiary companies and are held as non-current assets stated at cost less provision for impairment.
The Company assesses these investments for impairment wherever events or changes in circumstances indicate that the carrying value
of an investment may not be recoverable. If any such indication of impairment exists, the Company makes an estimate of the recoverable
amount. If the recoverable amount is less than the value of the investment, the investment is considered to be impaired and is written
down to its recoverable amount. An impairment loss is recognised immediately in the income statement.
Cash and cash equivalents
Cash and short term deposits in the balance sheet consist of cash at banks and in hand, short-term deposits with an original maturity of
less than three months.
Financial assets
Financial assets are recognised when the Company becomes party to the contracts that give rise to them.
The Company classifies financial assets at inception as either financial assets at fair value or loans and receivables. Financial assets
at fair value through profit or loss are measured initially at fair value, with transaction costs taken directly to income statement.
Subsequently, the fair values are remeasured and gains and losses from changes therein are recognised in the income statement.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 208
Notes to the Company financial statements continued
for the year ended 31 December 2021
3 Summary of significant accounting policies (continued)
Financial assets (continued)
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
On initial recognition, loans and receivables are measured at fair value plus directly attributable transaction costs. Subsequently, such
assets are measured at amortised cost, using the effective interest (EIR) method, less any allowance for impairment.
Financial liabilities
Financial liabilities comprise predominantly amounts due to other Group companies. On initial recognition, financial liabilities are
measured at fair value plus transaction costs where they are not categorised as financial liabilities at fair value through profit or loss.
Financial liabilities at fair value through profit or loss are measured initially at fair value, with transaction costs taken directly to the
income statement. Subsequently, the fair values are remeasured and gains and losses from changes therein are recognised in the
income statement.
Derecognition of financial assets and liabilities
Financial assets are derecognised when the right to receive cash flows from the assets has expired or when the Company has transferred
its contractual right to receive the cash flows from the financial assets or has assumed an obligation to pay the received cash flows in full
without material delay to a third party, and either:
– Substantially all the risks and rewards of ownership have been transferred; or
– Substantially all the risks and rewards have neither been retained nor transferred but control is not retained.
Financial liabilities are derecognised when the obligation is discharged, cancelled or expires.
Current and deferred income tax
The Company is tax resident in the United Kingdom.
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that
it relates to items recognised in other comprehensive income or directly in shareholders’ funds. In this case, the tax is also recognised in
other comprehensive income or directly in shareholders’ funds, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the
countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the
basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of
goodwill; or arise from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is recognised using the tax rates (and laws) that have been enacted or substantially enacted by the balance sheet
date and are expected to apply then the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are only recognised to the extent it is probable that there will be suitable taxable profits from which they can
be recovered.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. Deferred tax
balances are not discounted.
Foreign currency translation
Transactions in foreign currencies are initially recorded in Pounds Sterling (£) at the foreign currency rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into Pounds Sterling (£) at the rates of
exchange ruling at the balance sheet date (the closing rate).
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date
of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the
date when the fair value was determined.
Dividends
Final dividends proposed by the Board of Directors and unpaid at the year end are not recognised in the financial statements until they
have been approved by shareholders at the Annual General Meeting. Interim dividends are recognised when paid.
Entain plc | Annual Report 2021 Financial statements 209
3 Summary of significant accounting policies (continued)
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received net of direct issue costs.
Share-based payments
The cost of equity settled transactions with employees is measured by reference to the fair value at the date on which they are granted
(see note 31 of the consolidated financial statements for further details).
The cost of equity settled transactions is recharged to the respective employing entities.
Separately disclosed items
To assist in understanding its underlying performance, the Company has defined the following items of pre-tax income and expense as
separately disclosed items as they reflect items which are exceptional in nature or size.
The separate disclosure of these items allows a clearer understanding of the trading performance on a consistent and comparable
basis, together with an understanding of the effect of non-recurring or large individual transactions upon the overall profitability of
the Company.
The separately disclosed items have been included within the appropriate classifications in the income statement. Further details are
given in note 6.
Finance expense and income
Finance expense and income arising on interest bearing financial instruments carried at amortised cost are recognised in the income
statement using the effective interest rate method. Finance expense includes the amortisation of fees that are an integral part of the
effective finance cost of a financial instrument, including issue costs, and the amortisation of any other differences between the amount
initially recognised and the redemption price. All finance expenses are recognised over the availability period.
4 Judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make assumptions, estimates and judgements that affect the amounts
reported as assets and liabilities as at the balance sheet date and the amounts reported as revenues and expenses during the year.
Use of available information and application of judgement are inherent in the formation of estimates. Actual results in the future may
differ from those reported. In this regard, management believes that the accounting policies where estimation is applied are those that
relate to:
Investment in subsidiaries
The carrying value of investments is calculated as the initial cost at recognition less any provisions for impairment. The values used in
any impairment review are based on the same principles and methods as described in the Group accounting policies and in note 14 of the
Consolidated Financial Statements.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised.
5 Operating profit before separately disclosed items
This is stated after crediting/(charging):
Management fees
Audit fees
6 Separately disclosed items
Integration costs
Legal and onerous contract provisions
Movement in fair value of contingent consideration
Issue costs write off
2021
£m
14.6
(0.6)
2021
£m
–
4.5
2.3
5.3
12.1
2020
£m
12.2
(0.6)
2020
£m
0.2
6.2
19.5
5.3
31.2
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 210
Notes to the Company financial statements continued
for the year ended 31 December 2021
7 Finance expense and income
Loan interest income
Intercompany interest
Loan interest expense
Gains/(losses) arising from change in fair value of financial instruments
Losses arising from foreign exchange on debt instruments
Net finance income/(expense)
8 Income tax
The tax credit for the year presented is £0.6m (2020: £nil).
2021
£m
5.9
8.5
(3.5)
77.4
(0.1)
88.2
2020
£m
7.0
15.9
(2.8)
(59.8)
(10.5)
(50.2)
A reconciliation of income tax applicable to profit (2020: loss) before tax at the UK statutory income tax rate to the income tax for the
years ended 31 December 2021 and 31 December 2020 is as follows:
Profit/(loss) before tax
Corporate tax credit thereon at 19.00%
Adjusted for the effects of:
– Non-taxable income
– Non-deductible expenses
– Group relief claimed
– Tax losses carried forward
– Overseas tax credit
Income tax credit
There is no deferred tax present on the balance sheet for either periods presented.
9 Dividends
Please see note 11 of the Consolidated Financial Statements.
10 Investments
Cost and net book value
At 1 January 2020
Additions
At 31 December 2020
Cost and net book value
At 1 January 2021
Additions
At 31 December 2021
Subsidiaries and other related entities are listed in note 34 of the Consolidated Financial Statements.
Additions in the year predominantly relate to the acquisition of Enlabs.
2021
£m
266.7
50.7
(36.6)
1.5
(15.6)
–
(0.6)
(0.6)
2020
£m
(80.7)
(15.3)
(4.3)
6.8
–
12.8
–
–
Total
£m
3,950.9
57.7
4,008.6
4,008.6
363.5
4,372.1
Entain plc | Annual Report 2021 Financial statements 11 Trade and other receivables
Amounts due from Group companies
Other debtors
Prepayments
211
2021
£m
742.6
3.3
2.5
748.4
2020
£m
1,009.8
1.6
2.2
1,013.6
Amounts of £650.9m (2020: £nil) are not expected to be called upon within the next 12 months following the approval of these financial
statements and have therefore been classified as non-current assets within the Balance Sheet.
Other amounts owed by other Group undertakings are included under amounts falling due within one year as they are repayable on
demand, unsecured, and accumulate interest in a range between 0% and 4% plus IBOR.
12 Trade and other payables
Current
Amounts due to Group companies
Other payables
Non-Current
Amounts due to Group companies
2021
£m
2020
£m
739.5
4.8
744.3
872.8
2.5
875.3
594.0
566.9
Amounts owed to other Group undertakings are included under amounts falling due within one year as they are repayable on demand,
unsecured, and accumulate interest in a range between 0% and 4% plus IBOR.
13 Interest bearing loans and borrowings
Current
Euro denominated loans
USD denominated loans
Sterling denominated loans
Non-current
Euro denominated loans
USD denominated loans
Sterling denominated loans
2021
£m
2020
£m
–
–
–
–
–
–
(6.8)
(6.8)
2.1
(0.1)
(2.6)
(0.6)
–
–
(6.7)
(6.7)
As at 31 December 2021 there were £590.0m (2020: £535.0m) of committed bank facilities against which £51.0m (2020: £55.0m) has
been utilised for letters of credit. Of the remaining balance £nil (2020: £nil) was drawn down. Fees in the year relating to the undrawn
facility were £6.8m (2020: £6.7m).
14 Financial risk management objectives and policies
The financial risk management objectives and policies applied by the Company are in line with those of the Group as disclosed in note 25
to the Consolidated Financial Statements.
15 Called up share capital
Details of the share capital of the Company are given in note 28 of the Consolidated Financial Statements.
16 Related party transactions
The Company has taken advantage of the exemption under paragraph 8(k) of FRS 101 not to disclose transactions with fellow wholly-
owned subsidiaries. See note 34 of the Consolidated Financial Statements for disclosure of remuneration of key management personnel.
17 Subsequent Events
For details of subsequent events affecting the Company, see note 36 of the Consolidated Financial Statements.
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 212
Glossary
Definition of terms
Definition of terms
AAMS
Automated accounts management systems
Adjusted fully diluted EPS cents
Fully diluted earnings per share based on adjusted PBT
Adjusted PBT
AR
ARC™
B2B
B2C
BI
CAGR
CGUs
CMS
Profit before exceptional items, amortisation associated with acquisition, dividends from previously
sold businesses
Augmented reality
Advanced Responsibility and Care ™, the Group’s safer betting and gaming technology programme
Business-to-business
Business-to-consumer
Business intelligence
Compound annual growth rate
Cash-generating units
Customer marketing services
Constant currency basis
Each month in the prior period re-translated at the current periods exchange rate
Contribution
Revenue less betting taxes, payment service provider fees, software royalties, affiliate commissions,
revenue share and marketing costs
Contribution margin
Contribution as a percentage of NGR
CRM
CS
DTR
EPS
ESG
GGY
GHG
Customer relationship management
Customer services
Disclosure and transparency rules
Earnings per share
Environmental, social and governance
Gross gaming revenue
Greenhouse gas
GVC / GVC Holdings PLC
The Group’s former name before becoming Entain plc in December 2021
H2GC
IA
IAS
IFRS
IOT
KPIs
KYC
Ladbrokes Coral
LTIP
MIP
Net debt
H2 Gambling Capital – independent providers of betting and gaming market data and estimates
Internal audit and risk management
International Accounting Standards
International Financial Reporting Standards
Internet of things
Key performance indicators
Know your customer – customer verification tools
Ladbrokes Coral Group Plc
Long-term incentive plan
Management incentive plan
Cash and cash equivalents (including amounts recorded as assets in disposal groups classified as
held for sale), less customer liabilities less interest bearing loans and borrowings
Net Gaming Revenue (“NGR”)
Revenue before deducting VAT
NGR YTD
RET
Revenue
Net Gaming Revenue in the year to date
Research, education and treatment associated with responsible gambling
Net Gaming Revenue less VAT (imposed by certain EU jurisdictions on either sports or gaming
revenue)
Sports Gross Win Margin
Sports wagers less payouts
Sports Gross Win Margin %
Sports Gross Win Margin divided by Sports wagers
Sports Net Gaming Revenue
(“Sports NGR”)
Sports Gross Win Margin less free bets and promotional bonuses
Sports Wagers
TCFD
Gross bets placed by customers on sporting events
Taskforce for Climate-related Financial Disclosures
Underlying EBITDA
Stated pre separately disclosed items
VR
Virtual reality
Entain plc | Annual Report 2021 Financial statements Shareholder information
Annual General Meeting
Communications
Share fraud warning
213
The Company’s 2022 AGM will be held on
Friday 24 June at 10:00 at The Brewery,
52 Chiswell Street, London EC1Y 4SD.
Details of each resolution to be considered
at the meeting and voting instructions
will be provided in the Notice of Meeting
that will be available on the Company’s
website at www.entaingroup.com.
The voting results of the 2022 AGM will
be available on the Company’s website
at www.entaingroup.com shortly after
the meeting.
Information about the Company, including
financial results and details of the current
share price, is available on the website,
www.entaingroup.com.
Shareholding contacts
For any queries regarding your
shareholding, please contact our
registrars Link Asset Services.
Fraudsters use persuasive and high-
pressure tactics to lure investors into scams.
They may offer to sell shares that turn out
to be worthless or non-existent, or to buy
shares at an inflated price in return for an
upfront payment. While high profits are
promised, if you buy or sell shares in this
way you will probably lose your money.
Should you receive any unsolicited calls or
documents to this effect, you are advised
not to give out any personal details or to
hand over any money without ensuring that
the organisation is authorised by the UK
Financial Conduct Authority (“FCA”) and
undertaking further research.
If you are unsure or you think you have been
targeted, you should report the organisation
to the FCA. For further information, please
visit the FCA’s website at www.fca.org.uk,
email consumer.queries@fca.org.uk or call
the FCA consumer helpline on 0800 111
6768 (freephone), 0300 500 8082 (from the
UK) or +44 20 7066 1000 (if calling from
outside the UK).
Corporate information
Company name
Entain plc
Company number
4685V
Secretary and registered office
Emily Carey
Entain plc
32 Athol Street Douglas
Isle of Man
IM1 1JB
Telephone: +350 200 78700
www.entaingroup.com
UK Head Office
One New Change
London
EC4M 9AF
Registrars
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
BR3 4TU
www.linkgroup.eu/get-in-touch/
shareholders-in-uk-companies
Telephone: 0871 664 0300 from the UK or
+44 (0)371 664 0300 from outside the UK
Email: shareholderenquiries@linkgroup.co.uk
Auditors
KPMG LLP
St Nicholas House
31 Park Row
Nottingham
NG1 6FQ
Legal advisors
Freshfields Bruckhaus Deringer
DQ Advocates
Principal UK Bankers
Barclays Bank PLC
The Royal Bank of Scotland plc
Future trading updates
and financial calendar
7 April
7 July
Q1 trading update
Post close trading update
11 August
Interim results
13 October
Q3 trading update
Overview | Strategic report | Governance | Financial statements Entain plc | Annual Report 2021 Entain plc
Incorporated in the Isle of Man
under number 4685V
www.entaingroup.com
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