Annual Report 2022
moments
of
excitement
CONTENTS
HIGHLIGHTS
Overview
Introduction
01
04 We are Entain
06
Our investment case
Strategic report
08
12
22
30
32
34
36
38
43
52
60
62
66
70
82
85
89
Chairman’s introduction
Chief Executive’s Review
Strategy in action
The industry in which we operate
How we create value
Our strategic framework
Regulatory update
Sustainability
Safer betting and gaming
Investing in people and communities
Reduce environmental impact
Engaging with stakeholders
TCFD Statement
Chief Financial Officer’s Review
Chief Governance Officer’s Review
of Risk
Principal Risks
Viability Statement
Governance
Board of Directors
91
Chief Governance Officer’s Report
94
97
Governance framework
104 Nomination Committee Report
Audit Committee Report
107
ESG Committee Report
113
116
Directors’ Remuneration Report
153 Directors’ Report
Financial statements
157
172
173
174
175
176
177
226
227
228
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
229 Notes to the Company financial
statements
234 Glossary
235
236
Shareholder information
Corporate information
Operational highlights
¥ Group Net Gaming Revenue (“NGR”)
up +12% (+10%cc1) in the year
– Group NGR including 50% share
of BetMGM up +18% (+15%cc1)
¥ Online NGR down -1% (-2%cc1)
in 2022, with positive underlying
momentum demonstrated across
all key markets
– Underlying Online NGR growth of
approximately +3%, excluding The
Netherlands and the impacts of
regulatory changes in the UK
– Active customers grew by +7%
as we continue to broaden our
customer base
– Continued strategic progress
driving 3 year compound growth
of Online NGR of +12%cc1
¥ Retail NGR up +66%2 (+66%cc1,2)
reflecting lapping of Covid
comparators in the first half of
the year as well as an improved
customer offer through betting and
gaming terminals
¥ BetMGM continues to perform
strongly with strategic progress on
track towards EBITDA positive in
H2 2023
– 2022 NGR of $1.44bn up +71%
year on year
– 29%3 share in iGaming and 18%3
share in sports-betting and
iGaming in the markets where
BetMGM operates
– 2023 net revenue from operations
expected to be in the range of
$1.8bn-$2bn
¥ Continued growth strategy with
further diversification across
regulated geographies and products
– Five transactions announced
during 2022, including
establishing Entain Holdings
(CEE) Limited to unlock significant
growth opportunities across
the region
– Launch of unikrn in Brazil and
Canada marks our first steps
into the esports and skill based
wagering market
¥ Further progress on leadership of
responsibility and sustainability
– Only global operator with 100%
revenue from regulated or
regulating markets
– Groundbreaking ARC™ player
protection programme rolled out
across 22 markets
– Entain and BetMGM led US online
operators’ commitment to the first
responsible gaming standards for
the industry
– Awarded GamCare’s Advanced
Safer Gambling Standard, SBC’s
Global Socially Responsible
Operator of the Year for 2022 and
numerous safer gambling awards,
including from S&P and EGR
Financial highlights
Group Revenue
£4.3bn
+10% (cc1)
2021: £3.9bn
Online Net Gaming Revenue
£3.1bn
-2% (cc1)
2021: £3.1bn
BetMGM Net Gaming Revenue
Group Underlying EBITDA
$1.4bn
+71%
2021: $850m
£993.2m
+13%
2021: £881.7m
Continuing Profit After Tax
Adjusted Net Debt
£32.9m
2021: £275.6m
Diluted Underlying EPS
60.5p
+12%
2021: 53.8p
£2.8bn
2.8x (2.6x proforma)
2021: £2.1bn (2.4x)
Adjusted Diluted EPS
(excluding US JV)
93.2p
+15%
2021: 81.1p
1. Growth on a constant currency basis is calculated by translating both current and prior year
performance at the 2022 exchange rates.
2. Retail performance numbers are quoted on a LFL basis and also excludes the post acquisition
performance of shops in Croatia.
3. Three month period to December 2022, in markets in which BetMGM operates, excluding AZ
as yet to report.
Overview
Strategic report
Governance
Financial statements
1
Exci-
ting
moments
We are Entain, like our
customers, we get excited
about the world of sport,
gaming and interactive
entertainment. Whether
it’s watching your favourite
team, beating your mates or
experiencing the next big thing,
we love exciting moments.
Entain plc | Annual Report 2022 2
Re s p onsib
l
e
m
ome n ts
Entain plc | Annual Report 2022 Overview Re s p onsib
l
e
Overview
Strategic report
Governance
Financial statements
3
Sustainability is at the heart of our business.
We operate exclusively in regulated and
regulating markets. We make sure our products
are safe by leveraging our technology to protect
players. It’s your game.
m
ome n ts
Online annual report
An online summary sharing our
highlights of our year is available by
accessing the link below.
Moments of 2022 strategy in action
During the year we continued to
deliver on our strategy of providing
our customers with fantastic
products, engaging content and
exciting experiences. We do this while
ensuring they play safely with us at
all times.
For further details see pages 22-29
For further details see
entaingroup.com/
2022annualreport
Entain plc | Annual Report 2022 4
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
regulated and regulating online and retail markets. Our unique platform
distinguishes us as an operator, enabling us to grow our core business while
expanding into new areas of growth, embracing new opportunities, all with
a customer centric approach.
Delivering growth, delivering sustainability
2022 was another strong year for the Group, in terms of strategic,
financial and operational performance. Alongside our revenue
growth, we announced five transactions during the year, continuing
our evolution as an industry leader, driving growth, innovation,
capability, player protection and customer centricity. Our strategy
is clear: leveraging and embracing the powerful advantages of
the unique Entain Platform to deliver on our core pillars of growth
and sustainability. We continue to lead the way in the critically
important area of player protection, via our technology based
Advanced Responsibility and Care™ (“ARC™”) programme.
In addition, we are committed to put back into the communities
in which we operate through our investment in diversity through
technology and support of grass roots sport projects.
At a glance
2022 NGR Split by geography
>130 licences across
Currencies accepted
1
7
6
5
4
3
2
1. UK
2. BETMGM
3. Italy
4. Australia
5. Brazil
6. Germany
7. Row
41%
12%
10%
10%
4%
3%
20%
>40 territories
130+
42
Offices worldwide
Languages offered
20+
33
Croatia
#1
Baltics
#1
Netherlands
#3
Retail
UK
#1
Belgium
#1
Ireland
#3
Italy
#3
Online
UK
#2
Germany
#2
Australia
#3
US – iGaming
#1
US – Sports
#3
Italy
#4
Overview Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
5
Our divisions
2022 NGR Split
3
2
2022 Underlying EBITDA Split1
3
2
1. Online
2. Retail
3. other
70.1%
29.3%
0.6%
1. Online
2. Retail
3. other
74.4%
25.2%
0.4%
1
1
Online sports wagers
Employees & contractors
£14.1bn
c29,000
-1%
2021: £14.2bn
Leading brands
Retail sports wagers
(like-for-like)
£3.8bn
+68%
2021: £2.3bn
Leading brands
30+
1. New opportunities and Corporate
are excluded as they are negative
Our commitments
Doing what’s right is what underpins our approach to business. We want to be known as a responsible
company that our employees are proud of and our customers, partners and suppliers trust. We believe that
long-term, successful business relationships are built by being honest, open, and fair.
Our sustainability commitments
Our value commitments
Lead on responsibility– provide our
customers with the safest and most
trusted environment to play.
Diversify our regulated activities –
we are proud that we are the only
global operator whose revenues
exclusively come from markets that are
domestically regulated or are regulating.
Broaden our customer appeal –
understand our customers and
changing trends to attract a broad
recreational audience.
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.
These five values (“Values”) guide every
decision we make and action we take.
They are vital to our culture and are at the
heart of how we work together, serve our
customers and measure our success.
4. Win together – If you are on our
team, anywhere in the world,
you’re one of us. Together we win.
Together we’re stronger.
5. Be bold – We don’t back down from
challenges, and we stay positive.
At Entain we strive to:
Our Customer commitments
1. Excite our customers – We put people
Customers are the focus of everything
at the heart of the action. Their delight is
always at the centre of what we do.
we do.
Ensure we provide a safe betting and
2. Drive innovation – We don’t follow
gaming environment.
trends. We create them. Our curiosity
and openness to change means we
always seize opportunities to innovate
and deliver game-changing results.
3. Do what is right – We do what is right
by our customers, right by our people
and right by our environment. We act
lawfully, and behave with honesty
and integrity.
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
while ensuring they.
Entain plc | Annual Report 2022 6
Our investment case
Entain is a differentiated consumer-focused business operating in a global industry
with attractive growth dynamics which underpin the attractiveness of our investment
proposition. We are the most diversified leader of scale in our sector, with regulated
market growth embedded throughout our business, enabling us to deliver profitable
and sustainable returns for our stakeholders.
The dynamics of the global industry in which we operate remain
highly attractive with the powerful combination of regulation,
digitalisation and evolving customer behaviours creating a total
addressable market opportunity of $170bn over the medium term.
Entain’s position as a differentiated leader across diverse and
regulated markets enables us to maximise this growth opportunity,
providing the opportunity to treble the size of our business.
The four key elements of investment case: the growing global
market in which we operate; the opportunity to leverage the scale
advantages of our unique platform; the sustainability of our growth
model and; our superior financial delivery come together to create
a powerful combination, which delivers more value than its sum
of parts.
A significant global opportunity
Deliver superior growth
Entain is operating
in a growth market
¥ Attractive global industry dynamics underpin
large and expanding market
Leveraging scale
advantages to drive
superior growth
¥ Entain platform leverages scale advantages:
¥ Evolving customer needs growing existing
– Largest industry technology platform driving synergies
and new markets
– In-house expertise and capabilities supporting growth
¥ Trebling of Total Addressable Market
¥ Scaled capabilities support deeper and broader
customer engagement
read more about our market on: pages 30-31
¥ Strong track record of superior market growth
Growth in the global online market1
15%
Growth over the past 10 years
11%
Growth forecast between
2022 and 2027
¥ Compelling M&A enhances market growth,
diversification and scale
read more about our market on: pages 30-31
Our strategy
Growth
Sustainability
We are focused
on a range of
exciting growth
opportunities that
will significantly
increase the value
of the Group.
We believe the
most sustainable
business will be
the most successful
business.
1. Source: H2 Gambling Capital, February 2023
Overview Entain plc | Annual Report 2022
Overview
Strategic report
Governance
Financial statements
7
An unrivalled platform of excellence
Superior financial delivery
Leadership in sustainability
supports higher quality
returns
Cash generated used
to maximum effect
¥ Disciplined capital allocation
¥ Unrivalled diversification – geographic,
product, customer base
¥ Profitable with Group EBITDA >20%
¥ 100% regulated or regulating market exposure
¥ Strong cash generation
¥ Industry leading comprehensive ESG strategy
¥ Strong and flexible balance sheet
¥ Leadership of responsible engagement and
player protection
read more about our financial performance on: pages 70-81
read more about our business model on: pages 32-35
2022 Cash generated by operations
£846.9m
2022 Underlying Online EBITDA margin
27.1%
2022 leverage
2.8x (2.6x proforma)
Enhanced
content and
media
experience
Deep
experience in
real money
gaming
The Entain
platform
Expanded
interactive
entertainment
experience
Entain plc | Annual Report 2022
8
Chairman’s introduction
2022 was another strong year for our business,
and one in which we continued to make
meaningful progress towards our ambition of
being the world-leader in sports betting, gaming
and interactive entertainment.
Delivering
sustainable
success
The progress that has
been made in the last
three years has been
structural, tangible and
demonstrable.”
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
9
Barry Gibson
Chairman
I had the honour of being appointed your
Chairman three years ago and so it seems
timely to look back at the events of that
period and reflect on what has been an
intense period of transformation for Entain.
Every aspect of our business model,
strategy and culture has been reviewed,
analysed, stress-tested and – where
necessary – improved. As a result, we are
a discernibly different company today than
we were a few short years ago.
The progress that has been made
since then has been structural, tangible
and demonstrable:
¥ The Board and leadership teams have
been overhauled;
¥ 100% of our revenue is now from markets
around the world that are domestically
regulated or which have a clear path to
regulation – we are proud to be setting
the standard for the industry as the
only global operator focused solely on
these markets;
¥ We have a compelling strategy and
vision and a fresh corporate identity,
underpinned by our core pillars of growth
and sustainability;
¥ We have overhauled our governance
processes across the organization to
ensure the highest standards;
¥ We have developed an innovative and
industry-leading technology – ARC™ – to
keep our customers safe;
¥ We have launched the Entain Foundation,
which focuses on making positive
contributions in the communities in which
we operate around the world; and
¥ We have worked constructively and
proactively with regulators around the
world to help create an environment that
balances a fair and open recreational
market with the need to provide
protection for the small minority of
customers who may run into problems.
Entain plc | Annual Report 2022 10
Chairman’s introduction continued
There remain historic issues that we have
previously announced relating to our legacy
business that need to be determined and
which may result in outcomes that do not
reflect the type of business that we are
today, as we now have rigorous checks and
balances in place to ensure that those types
of issues should not reoccur in the future.
It was, of course, disappointing to read the
findings of the UK Gambling Commission in
reaching a settlement with them during the
year. But as part of our transformation, we
are committed to ensuring that we have the
requisite compliance processes in place in
all our markets.
While a huge amount has been achieved
there is still much to do, and we are
determined to continue to innovate and
progress – all the while staying true to our
philosophy that only a truly responsible
Company can be truly sustainable.
Delivering sustainable progress
A strong platform for success
One of the key ways in which we define
sustainability is through a relentless focus
on the needs, enjoyment and welfare of
our customers. By providing them with
an outstanding experience in a safe and
protected environment, we build trust and
loyalty. Our dedication to this is epitomised
in our development of our industry-leading
player protection system, ARC™ (Advanced
Responsibility and Care™). Using artificial
intelligence, ARC™ has revolutionised the
way in which customers are protected.
This is a truly ground-breaking approach
to player protection and we are extremely
proud that industry bodies continue to
recognise our commitment to this area.
And as a result of all these significant
evolutions, Entain is now the most awarded
company in the sector for safer gambling.
This year we were awarded GamCare’s
Advanced Safer Gambling Standard,
and received numerous awards for safer
gambling, including from S&P, SBC & EGR.
As a founding partner of the Global Gaming
Alliance, we’re relentless in our pursuit of
higher protection standards for players all
over the world.
As well as being an integral part of our
focus on the customer, our unique Entain
Platform, which includes our industry
leading technology, is the driver behind
Entain’s performance. It enables us to
deliver organic growth, gives us the
agility to successfully execute our M&A
strategy, and provides us with a significant
advantage when it comes to our rapidly
expanding presence in North America
via BetMGM.
Allied to this is the diversity of our
geographic and product spread, which
enables us to continue delivering growth
even in the face of macroeconomic and
regulatory challenges. That diversity was
enhanced further during 2022 as a result
of the 5 acquisitions that we announced
during the year – including BetCity in The
Netherlands, Sports Interaction in Canada,
Klondaika in Latvia, Totolotek in Poland,
and SuperSport in Croatia. We also opened
in a number of new markets and launched
unikrn in Brazil and Canada.
Entain plc | Annual Report 2022 Strategic report Overview
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Governance
Financial statements
11
Healthy financial performance
Rewarding performance
Looking ahead
Of course, none of this success would
be possible without the extraordinary
dedication and expertise of Entain’s
c.29,000 colleagues all over the world.
In recognition of this, we are pleased to
have repeated our ShareSave plan and
in 2022 we were able, with shareholder
support, to gift all our colleagues
free shares.
In reviewing colleagues salaries for the year
ahead, in line with our core value of doing
the right thing, we reduced Executive LTIP
awards to reflect the regulatory settlement
with the UK Gambling Commission and we
targeted higher pay rises in percentage
terms towards those on lower salaries
across the Group. In particular, for our
colleagues in retail in the UK we raised
hourly pay rates in line with the real
living wage and provided them with a
one-off payment of £300 each ahead of
the Christmas holidays. You will see on
page 118 that, following an extensive
shareholder consultation, we are proposing
changes to our long term incentive plan
to ensure that we are able to attract
and retain the very best talent that your
company deserves in order to ensure that
we deliver on our ambitions.
2022 threw up many challenges as the
world re-balanced from the effects of
Covid and political events disturbed
global supply chains. In spite of these I am
pleased that your company managed to
deliver a strong result for the year as we
delivered on our strategy and benefitted
from the diversity of our operations across
geographies, product and customer base.
With Group revenues up 12% in the year, a
strong rebound in retail offset the rebalance
of Online following Covid lockdowns.
This enabled us to deliver underlying
EBITDA for the year of £993m, at the top
end of revised expectations.
Our strong financial performance and
robust balance sheet continues to
support the acquisitions I mention above
as we continued to build scale, and the
benefits that brings to our operations, in
regulated markets.
Having returned to dividend payment with
our interims in August 2022, I am delighted
that your Board has approved the payment
of a second interim dividend of 8.5p per
share, taking the full year payment total to
£100m.
Board structure
In February 2023 Mark Gregory and
Vicky Jarman stepped down from the
Board. I would like to thank them for their
advice and support over the last two
years. Following their departure, we made
some changes to our Board committees
and I would like to thank all of my Board
colleagues for their continued support.
Good regulation is a vital part of our
industry. It is why we only operate in
regulated or regulating markets and why
we like to enjoy positive and proactive
engagement with our regulators in each of
the markets in which we operate around
the world to encourage fair, but firm,
regulation that maintains a healthy balance
of all interested bodies including sports,
Governments, freedoms of players and
responsibility of operators. In particular
good regulation encourages the highest
standards of player protection, such as that
we can provide through ARC™. With that
in mind we look forward to the publication
of the much awaited Gambling Act (2005)
review white paper in the UK which we
hope will set the framework for the gold
standard of regulation for our industry.
As the worlds of media, gaming,
technology and entertainment converge,
the experiences that we are able to
give our customers are at the very
centre of this hugely exciting inflection
point. This positioning, along with the
extraordinary talent, capabilities and
commitment that are evident across
the business, means that we are able to
ambitiously pursue the $170bn addressable
market that we see in front of us.
It also gives us the fuel to further evolve
our business and deliver on our ambition of
being the global leader in betting, gaming
and interactive entertainment all while
delivering on our Sustainability Charter and
being the most responsible operator in our
industry. As a result, we are more confident
than ever that Entain will continue to deliver
strong returns for all our stakeholders.
We are more confident than
ever that Entain will continue
to deliver strong returns for
all our stakeholders.”
Entain plc | Annual Report 2022
12
Chief Executive’s Review
Entain is a leading consumer-focussed business operating in
a global industry with attractive growth dynamics. The Group
continues to make excellent progress as a global leader in betting,
gaming and interactive entertainment. As the most diversified
leader of scale with regulated market growth embedded in the
business, the Group delivers profitable and sustainable returns for
our stakeholders.
A differentiated
leader in a
global growth
industry
2022 was another year of strong
financial, operational and strategic
progress for the Group.”
Entain plc | Annual Report 2022 Strategic report Overview
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Governance
Financial statements
13
Jette Nygaard-Andersen
Chief Executive Officer
I am pleased to report that 2022
was another year of strong financial,
operational and strategic progress for the
Group, despite facing some headwinds.
Alongside further growth in our revenues,
the Group delivered underlying EBITDA1,6
up +13%, announced five transactions
including establishing Entain CEE (“Central
& Eastern Europe”) to unlock significant
growth opportunities across the region, and
through unikrn launched a new segment of
skill based wagering for esports.
The dynamics of our global industry
remain highly attractive with the powerful
combination of regulation, digitalisation
and evolving customer behaviours
underpinning a total addressable market
opportunity of approximately $170bn over
the medium term. Entain’s position as a
differentiated leader across diverse and
regulated markets enables us to maximise
this growth opportunity with the potential
to treble the size of our business.
Our operations span over 40 regulated
or regulating territories, with established
leading brands in each of our key markets.
Group Net Gaming Revenues (“NGR”) for
2022 grew +15%cc3 including our 50%
share of BetMGM (up +10%cc3 excluding
BetMGM). Our growth continues to be
both diversified and sustainable through
our growing global footprint, expanding
product offer and broadening customer
base. Our online business has 7% more
active customers than in 2021 achieving
record levels during the final quarter.
We continue to set the standards for
our industry on responsibility and
sustainability. Our ground-breaking
approach to player protection through
our Advanced Responsibility and Care™
programme (“ARCTM”) was rolled out
internationally to 22 markets during the
year. Regulation is the cornerstone of a
sustainable business and we are proud
that we lead the industry with 100% of
our revenue now coming from markets
that are either domestically regulated or in
the process of regulating – setting a new
benchmark for our industry.
Entain plc | Annual Report 2022
Entain plc | Annual Report 2022 14
Chief Executive’s Review continued
Our commitment to this important
agenda, elevating integrity within our
industry and doing the right thing sees us
absorb responsible gambling initiatives
and impacts from changes in regulated
and regulating markets. This has been
particularly evident in the UK with the
implementation of regulator enforced
affordability checks, which created a
headwind of approximately 10% on UK
Online revenues in 2022, with ongoing
impacts expected in 2023. We are
tremendously proud of the leadership role
we play in raising the bar for our industry
and our efforts continue to be recognised
with numerous awards as well as related
index inclusions.
We have made excellent progress in 2022
across both our growth and sustainability
pillars, to drive greater diversification
across our business model, greater scale to
leverage our capabilities as well as higher
quality and more sustainable earnings.
These achievements are testament to the
high quality and talented teams we have
across the Entain Group. I would like to
thank all of our teams across the globe
for their dedication and their commitment
throughout the year that underpins
this success.
Entain Platform powering growth
The Entain Platform continues to
distinguish us as an operator of excellence;
providing a unique competitive advantage
and supporting strategic execution focused
around the customer. Leveraging this
powerful and unrivalled platform enables
Entain to optimise core growth and
embrace new opportunities, whilst focusing
our customer centric approach across
our business.
The Entain Platform is a unique and
powerful combination that includes:
our in-house technology; leading global
brand portfolio; market leading product
and content; CRM capabilities; marketing
excellence; data analytics; industry leading
talent; player protection; innovation; and,
regulatory and operational expertise.
It enables us to differentiate our offer,
be flexible, responsive and agile, driving
significant competitive advantages.
This unique combination, operating at
scale, creates a multiplier effect that
helps drive outperformance in each of the
markets in which we operate.
The Entain platform continues to distinguish
us as an operator of excellence; providing
a unique competitive advantage and
supporting strategic execution focused
around the customer.
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
15
Growth
As we grow in more markets around the world, we continue to evolve our structures
and processes to maximise the scale efficiencies and benefits of the Entain Platform,
while ensuring that we remain local and agile for our customers in each of our
markets. Our in-house technology platform is the largest regulated platform in our
industry supporting approximately £3bn of Online NGR in 2022. As we look to migrate
more of our operations onto one core technology framework, fulfil our significant
growth ambitions and broaden our customer appeal in interactive entertainment
we are constantly looking to evolve our technology platform both through in-house
development and by adding further capabilities through small bolt-on acquisitions.
This will not only unlock further synergies and efficiencies, but will enable us to fully
exploit the flywheel effects of our business model.
Leadership in the US
BetMGM is firmly established as a leading
operator of sports betting and iGaming in
the US and Ontario, Canada. This success
is built on the Entain Platform comprising
powerful scaled capabilities including in-
house technology, industry leading talent,
data, analytics and MarTech, supported
by the brand strength of our joint venture
partner. The North American market is
expected to be worth around $37bn (which
includes Canada) over the long term, and
we are on track for our expected market
share of 20-25% over the long term.
Throughout 2022, we continued to build
on early successes and BetMGM has
gone from strength to strength, delivering
NGR of $1.44billion for the year, ahead of
expectations4. In 2023, we expect that this
will grow to $1.8bn - $2.0bn in NGR.
Through the Entain Platform we expanded
our BetMGM footprint, launching on day
one in 6 new online markets and opening
four new retail sportsbooks. As at the end
of December 2022, we were live in 24
jurisdictions, with further launches in Ohio
and Massachusetts in early 2023, meaning
we now have access to approximately 48%
of the adult US population.
Our strategy of leveraging and embracing
the powerful advantages of the unique
Entain Platform to deliver on our core
pillars of growth and sustainability is
clear. Entain is a truly differentiated
business with customers at our core.
Our unwavering ambition to be the world
leader in betting, gaming and interactive
entertainment and benefit from the
sizeable growth opportunities ahead of
us will drive significant value creation for
our stakeholders.
Our strategy for Growth
Entain is a business delivering sustainable
and profitable growth. We operate in a
global industry with attractive dynamics
embedded as regulation, online migration
and customer behaviours expand the
markets available to us. Today we operate
in over 40 regulated or regulating territories
with our betting and gaming offering
across both online and retail.
Our online operations have delivered a
three year compound annual growth rate of
+12%cc3, or +18%cc3 including our share of
BetMGM. Our Retail operations are +66%
ahead of a lockdown impacted 2021 and
customer volumes in our two largest retail
estates, the UK and Italy, are ahead of pre-
Covid levels.
Our growth strategy comprises four
pillars which will continue to broaden
our reach, diversify our audiences,
increase our scale and drive a strong
sustainable performance across the Group.
These pillars are: leadership in the US;
grow our presence in existing markets;
expand into new regulated markets – both
organically and via M&A; and extend into
interactive entertainment.
Entain plc | Annual Report 2022
16
Chief Executive’s Review continued
In the three months to December 2022,
our share of GGR (gross gaming revenue)
in the sports betting and iGaming markets
in which we operate was 18% and 20%
excluding New York.
Our leadership in iGaming continues with
a 29% market share. The unique range
of own and exclusive products provided
through our platform and award winning
in-house studios continues to differentiate
BetMGM’s offer, drive customer
engagement and embed our competitive
advantage as market leader. In sports
betting, we continue to build our position
with a 12% share in GGR across active
markets, in spite of our increasing focus
on NGR, discussed below. We continue
to make improvements to our offer with
the revamp of BetMGM’s sportsbook
app, updating the design, improving the
user experience with simpler and faster
optionality and overall enabling easier
navigation of the end to end customer
journey. As well as garnering positive
feedback, ratings by third party industry
bodies have improved and have driven
greater customer engagement and
retention. In Q4 2022, BetMGM’s average
monthly active gaming customers were
up +51% and up +61% for active sports-
betting customers, compared to Q4 2021.
Alongside our success in securing a
market leadership position, we have also
maintained strong financial discipline.
Supported by the significant embedded
margin advantage BetMGM enjoys
through its parental structure, 2022 saw
us increase focus on building a sustainable
and profitable business for the long term.
The prioritisation of NGR over GGR, through
progressively strategic bonus optimisation,
has seen sports NGR margins double year
on year in Q4. More rigorous customer
segmentation and player analytics, coupled
with a data-led approach to marketing,
enables bonusing to be effective and
efficient. Key customer metrics of cost per
acquisition (CPA) and first time depositors
(FTD) are ahead or inline with forecasts,
which reaffirms expectation of long-term
CPA of approximately $250.
Having already achieved profitability in
several states, we expect BetMGM to
be EBITDA positive in the second half
of 2023 and a long term target EBITDA
margin of 30-35%. In summary, BetMGM
remains firmly on track for its path to
profitability and has secured its position
as a leader in the US sports-betting and
iGaming markets.
Grow presence in core markets
Entain’s operations span over 40 regulated
or regulating territories, with established
leading brands in many of our markets.
Our existing markets are expected to
grow by approximately mid to high single
digit over the medium term, presenting a
significant addressable market opportunity.
We are well positioned to benefit from
this long growth runway with the Entain
Platform providing a differentiated
competitive advantage.
The Entain Platform powers our brands
to outperform their markets enabling our
Online business as a whole to grow at a
compound annual growth rate over the last
three years of 12%, including acquisitions.
Excluding our share of BetMGM, full year
Group NGR was up +12% (+10%cc3)
year on year. Online NGR was -2%cc3
lower year on year, behind our initial
expectations, as the business lapped
strong Covid comparators and faced
regulatory headwinds, particularly in
the UK as well as the required closure of
our Netherlands business ahead of new
licencing. We estimate regulatory changes,
particularly affordability measures in the
UK, created a mid-single digit headwind
in terms of Group NGR growth over the
year. Having fully lapped prior year Covid
comparators by the end of Q3, we returned
to year on year Online NGR growth in Q4 of
+8%cc3, helped by the men’s World Cup.
We have continued to evolve our
offering and appeal, creating moments
of excitement and entertainment for a
broader, more recreational customer base.
This resulted in record active customer
levels in the year, up +7% year on year.
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In the UK, we made further progress on our
brand re-positioning strategy to engage
with a broader and more recreational
audience. As a result online actives were
+13% higher year on year. Our Rocky
and GalaLand advertising campaigns,
the Coral Racing Club and innovative
Jockeycam, as well as Ladbrokes Fanzone
all drove increased customer engagement.
Our award winning Rocky campaign
increased new visitors to our website
by 75%. Ladbrokes Fanzone has, since
launch, seen over 90% of customer enrolled
selecting a Premier League team and
unlocking personalised benefits such as
boosted markets and free 5-a-side bets.
We further enhanced our customer offering
and user experience with new games,
products and content, documentaries and
social channel engagement.
In Australia, our business continues to go
from strength to strength with excellent
performances from both Ladbrokes
and Neds. NGR was up +12% (+8%cc3)
versus 2021 despite lapping strong Covid
comparators. By leveraging our different
brands as well as launching new and
innovative products and content, we
continue to outperform the market and
grow market share, with active customers
up +7% versus last year. During the year
Ladbrokes’ launch of Mates Mode is
resonating well with customers, enabling
them to chat, share and bet as a group.
Neds continued to perform strongly, with
its exclusive partnership with the UFC
delivering both engagement and branding,
as well as its eye catching and humorous
‘Take it to the Ned’s Level’ advertising,
illustrating our unwavering focus on
customer experience. We have also
collaborated with the Australian Hotels
Associates (AHA) New South Wales in
a long term advertising and sponsorship
agreement, providing Ladbrokes and Neds
the opportunity to reach new customers
across AHA’s 1,800 licensed venues.
Our business in Italy performed strongly
again in 2022 despite lapping a year
heavily impacted by Covid. We continue
to see the benefits of our omni-channel
offering with combined online and retail
NGR up +22%cc3 year on year, with Online
NGR growing at +26%cc3 on a 3 year
CAGR basis.
Our Brazilian business continues to
perform well in this fast growing market.
Despite heightened competition ahead of
regulation, NGR was up +20%cc3 year on
year. Actives were up +25%, demonstrating
the strength of our Sportingbet brand,
quality of offer and operational expertise.
While domestic regulation has been
held up following the election of a new
Government, we look forward to a market
post regulation with clear demand for
the high quality customer experiences
and breadth of product offering which
Entain provides.
In Germany, whilst our gaming licenses
were issued in late 2022, the German
market is only just starting to experience
the emergence of a robust regulatory
regime, although there remains much
for the regulator still to do. As such, the
German online betting and gaming market
remained challenging for compliant
operators like us, whilst also seeing the
introduction of deposit limits for sports
customers. We look forward to 2023
with optimism and the expectation of
greater regulatory oversight providing a
more balanced trading environment and
a safe and entertaining experience for all
customers. Bwin is a leading brand across
Germany (as well as in many of our other
global markets) underpinned by the quality
of our products and offer as well as great
partnerships with the DFB and UEFA
Europa League.
We made further progress on our brand
re-positioning strategy to engage with a
broader and more recreational audience.”
Entain plc | Annual Report 2022 18
Chief Executive’s Review continued
Enlabs in the Baltics delivered another
strong year despite the challenging economic
environment in the region, with proforma2
NGR up +5%cc3 compared to 2021. Entain’s
core products are now fully integrated in
the customer proposition, strengthening our
product offering and helping to drive actives,
which are up +17% proforma2 year on year.
Ninja Casino launched in Sweden in H2 and
early results have been promising.
In Georgia, the Crystalbet brand remains the
market leader and has responded well to the
new regulatory regime which came into effect
at the start of 2022.
Our Party brands continue to perform in-line
with expectations. We are delighted our
Party brands are now active in the newly
regulated Ontario market, alongside our bwin
and BetMGM brands. We welcomed Ontario
customers to their first poker tournament
series, the Ontario Poker Championships
in September. Party has continued with its
renewed focus on the recreational player’s
entertainment experience, with Partypoker
Sports launching its first free-to-play game,
Football Full House. This correct score game
enables cross sell to customers with sport,
casino and poker prizes available to win.
In the Netherlands, having been required,
along with all responsible operators, to
withdraw from the market by the regulator
in Q4 2021, we are pleased to have
acquired BetCity which provides us with a
strong platform to drive further growth in
this newly regulated market.
Our Retail operations have performed
strongly during 2022, a year which was
largely uninterrupted by Covid related
restrictions. On a like-for-like basis, Retail
NGR for 2022 was +66%5 ahead of a
lockdown impacted 2021 and customer
volumes in our two largest retail estates,
the UK and Italy, are ahead of pre Covid
levels. This is clear evidence that our
customers value and enjoy the in-shop
experience. The reinvigoration of our retail
offering leveraging digital touchpoints,
our best in class betting and gaming
terminals combined with our shop
colleagues’ interaction provides customers
in the UK with an enjoyable and engaging
experience whilst also broadening our
audience demographic.
Expand into new regulated markets
Regulation and evolving consumer needs
and behaviours continue to prove to be
exciting growth drivers as we expand
into the $170bn addressable market we
have identified for betting, gaming and
interactive entertainment. We can expand
into these opportunities through organic or
inorganic expansion as well as developing
an offer into new product verticals.
We have a strong track record of
integration and value creation through
M&A – the acquisitions over the last four
years (excluding SuperSport and BetCity)
will see us double their value and create
approximately £900m of value in the first
three years of acquisition. This reflects the
revenue and cost synergies benefits as well
as improved margins that we can generate
as these businesses benefit from the scale
and efficiencies of the Entain Platform.
Many of these businesses have high quality
in-house technology into which we are
able to plug products and capabilities to
support synergy delivery. As we evolve
our technology platform we expect that
many of the businesses we have acquired
will, over time, migrate more fully on to the
Entain Platform, providing further synergy
benefits in years to come.
During the year we announced five
acquisitions. In Canada we acquired Avid
Gaming which saw Sports Interaction
join our bwin, Party and BetMGM
brands licensed to operate in Ontario.
Sports Interaction provides access to
the highly attractive, fast growing and
regulating sports betting and gaming
market across Canada, outside of the
province of Ontario. The acquisition of
Klondaika in Latvia, and Totolotek in
Poland, expanded and deepened our
access in these regulated markets where
we provide a broader offering of engaging
products and services for customers in their
respective markets.
Our acquisition of BetCity, announced in
June, and completed in early January 2023,
brought one of the Netherlands’ leading
operators in the newly regulated online
sports betting and gaming market into the
Group. Since its licencing in October 2021,
BetCity has grown strongly, establishing
a share of over 20% of this attractive and
fast-growing market.
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Extending into interactive
entertainment
Technology continues to change consumer
behaviours, creating new trends and
experiences, and opportunities for Entain
to explore.
We listen to customers to better
understand these trends to inform
how we adapt and innovate to capture
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.
Interactive entertainment and media are
converging with our traditional markets of
betting and gaming. Entain sits at the heart
of this convergence and as such provides
us with a unique strategic opportunity
as we continue to expand our product,
offering and content ensuring our customer
experience evolves to remain engaging,
innovative and relevant.
Towards the end of 2022 we took our
first steps into the esports and skill based
wagering market with the launch of unikrn’s
new esports offer. unikrn soft launched
in Brazil and Canada (outside of Ontario)
with an offer that includes innovative new
features that meet the needs of the skill
based wagering market for esports, such
as round the clock video game stream
featuring the world’s most popular video
game titles, and offering players more
ways to bet while watching and playing
their favourite games. The esports market
continues to grow strongly, and we will be
expanding our presence as we rollout to
further markets during 2023.
Technology continues to evolve and the
diverse scale of the Entain Platform puts
us in a unique position to be able to explore
and innovate to further create exciting
new unique products and experiences for
our customers.
There continues to be significant growth
opportunities in regulated markets across
the globe, and we continue to look for
further opportunities where we can
drive incremental value for shareholders.
There are at least 40 markets where we
do not currently operate today, including
Central & Eastern Europe, Latin America
as well as Africa and potentially over time,
parts of Asia.
In August 2022, we partnered with EMMA
Capital, a leading investment firm in the
Central and Eastern European region
to form Entain CEE as an innovative
approach to expansion into the CEE
region. Entain CEE’s first acquisition
was SuperSport, the leading gaming
and sportsbook operator in Croatia.
SuperSport has both online and retail
operations with its unrivalled brand and
proprietary technology solution delivering
a c.50% share in the fully regulated
Croatian market.
The Group’s portfolio of strong and globally
recognised brands enables us to expand
into new markets organically where no
clear M&A opportunity provides a more
attractive proposition. During the year,
we launched bwin in Zambia and Ninja
in Sweden. New market entries via both
M&A and organic expansion, contributed
to Online NGR during the year, with
SuperSport also generating retail revenue.
Entain plc | Annual Report 2022 20
Chief Executive’s Review continued
Sustainability
Entain proudly places sustainability as one of our two strategic pillars and
it remains at the heart of everything we do. We embrace our role within
society and lead our industry on the issues that matter to us – sustainability,
diversity and responsibility – with our firmly held belief that the most
sustainable business will be the most successful business in our industry.
Paired with our strategic growth priorities, our strategic sustainability pillar
is underpinned by the core principles of our Sustainability Charter which
outlines our ESG leadership ambitions.
We aim to meet, and exceed 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 strategy is underpinned
by four pillars of: lead on responsibility; diversify our regulated activities;
broaden our customer base; and, invest in our people and communities.
Lead on responsibility
Responsible engagement and player
protection is an important part of our
sustainability commitment. ARCTM is our
pioneering approach to customer protection
and its ongoing development continues.
During 2022, we saw greater accuracy of
our predictive tools, as well as ARCTM being
rolled out internationally, with its principles
implemented across 22 of our markets by
the end of 2022. ARCTM has delivered over
3.7 million proactive interactions in the
UK, and our most successful ARCTM model
showed a 36% drop in customer risk rating
following intervention, demonstrating that
ARCTM is successfully preventing harmful
behaviours amongst our customers and
helping them to keep their play safe
with us.
The ARCTM programme represents a step-
change in player protection and we were
pleased to see the success of our approach
recognised in 2022 with the award of
the Advanced Safer Gambling Standard
by GamCare.
Safer betting and gaming underpins
everything we do. Reflecting this, metrics
regarding the effectiveness of ARCTM as
well as completion levels for colleagues’
safer betting and gaming training are
included in our Group wide annual
bonus plan.
In the US, BetMGM was amongst the first
operators to have supported PlayPause, a
project intended to introduce cross-state
self-exclusion. We also led a collaboration
of four of the leading US operators to
establish the 12 Principles of Responsible
Online Gaming, providing an industry
benchmark for responsible operators.
A number of other operators have since
joined the collaboration.
Diversify our regulated activities
Entain is currently licensed in over 30
countries, and that number will continue
to rise through a combination of positive
regulatory developments as well as our
expansion into new regulated markets.
Operating in a well-structured regulatory
regime enables us to deliver higher quality
earnings with greater certainty and
sustainability as we continue to grow and
expand our global footprint and scale.
During 2022, Entain made further
and significant progress towards our
commitment to only operate in regulated
markets, and in January 2023 we
announced that we would accelerate
our plans. As a result, Entain is the only
global operator with 100% of revenues
from domestically regulated or regulating
markets. Of these markets where there is a
clear path to regulation in due course, Brazil
is the most significant for Entain operations.
Safer betting and gaming
underpins everything we do.”
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Our two Foundations – the Entain
Foundation and the Entain Foundation US,
continue to support research into problem
gambling and education initiatives that
align with our sustainability ambitions, as
well as investing into local communities and
grass roots sports across our key markets.
Building on our EnTrain initiative, with
its goal to positively impact one million
people through education in technology
by the end of the decade, we announced a
new partnership with McLaren Racing in
January 2023 to support women returning
to the tech sector. Through our joint
returnship programme, we aim to help
reignite the careers of women returning
to roles in STEM (Science, Technology,
Engineering and Mathematics). We have
also initiated returnship programmes in
our offices in Hyderabad, India and Manila,
Philippines.
A key focus for the Entain Foundation is
supporting grassroots sports through our
Pitching In programme. Our extended
partnership with the Pitching In Trident
Leagues supports 248 clubs and over
15,000 community based non-league
football players. In 2022 we launched the
Pitching In Volunteer Hub, a unique online
platform enabling every Trident League
Club to easily connect with potential
volunteers. In addition, we continue 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 have also internationalised
our investment in grassroots sport with
new projects funded in Austria, Italy, Spain,
Greece, Latin America and Africa.
Notes
1. This target has been restated from our 2021 ESG
Report as part of our submission to the Science-Based
Targets Initiative (SBTi).
2. Proforma results are presented as if the Group had
owned the entities since 1 January 2021.
3. Growth on a constant currency basis is calculated by
translating both current and prior year performance at
the 2022 exchange rates.
4. BetMGM guidance on 2022 NGR of over $1.3bn, as
stated at Business Update on 19 January 2022.
5. Retail performance numbers are quoted on a LFL basis
and also excludes the post acquisition performance of
shops in Croatia.
6. 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.
Note: Retail operates in UK, Italy, Belgium, Croatia and
Republic of Ireland. During 2022, there was an average
of 4,310 shops in the estate, compared to an average of
4,540 in the same period last year.
In the UK, we continue to wait for the
publication of the White Paper outlining
the review of the regulatory framework of
the 2005 Gambling Act. Along with other
industry operators we continue to actively
engage with appropriate parties in order to
help find a balance between protecting a
minority who are at risk while supporting a
healthy entertainment experience as well
as an environment that is commercially
viable for operators and related sports
and industries.
Entain is a strong supporter of good
regulation. We engage openly and
proactively with regulators around the
world to encourage well-structured and
robust regulatory environments which
balance the highest regulatory standards
and responsible player protection, whilst
also upholding customer freedoms and
right of choice.
Broaden our customer appeal
We made further progress in broadening
our appeal towards more recreational
audiences, providing a safe and
engaging entertainment experience.
Understanding our customers and
changing trends enables the evolution of
our brands and offering to remain engaging
and relevant to an ever-broadening
customer base.
The Entain Platform’s powerful capabilities
and data analytics underpin the execution
of our audience expansion. As part of
this broadening customer experience,
we continue to enhance our customer
proposition with new games, experiences,
products and content, documentaries and
social channel interactions.
Invest in our people and communities
Investing in our people and communities is
a cornerstone of our strategic sustainability
pillar. Recruiting, retaining, and nurturing
top talent from diverse backgrounds is
important to ensure that we maintain our
industry leading entertainment proposition.
Our ambition is to be the employer of
choice, attracting, engaging and retaining
the best talent globally, bringing the best
thinking to the business from inside and
outside of our sector.
Our “Everyone’s in The Game” people
strategy is underpinned by diversity and
inclusion, to ensure everyone at Entain feels
valued, respected and included. 2022 was
the first year of our new Diversity, Equity,
and Inclusion (“DE&I”) strategy, supported
by a key commitment to creating a safe
place to work. We proactively listen to
our people to shape our DE&I agenda,
leveraging the nine employee forums
globally and the results of our 2022 Your
Voice employee engagement survey.
2022 was an important year for the
Group in delivering against our efforts to
reduce our impact on the environment,
as we set out on our pathway to be Net
Zero for carbon emissions throughout
our operations by 2035. Having achieved
our previous greenhouse gas (GHG)
emissions reduction target, we are now
focused on achieving our new ‘near term’
science-based targets. Our commitment
to a reduction of 29.4%1 in our scope
1, 2 and 3 emissions by 2027 has been
formally submitted to the Science-based
Targets initiative to ensure our journey
to decarbonisation is in line with limiting
global warming to 1.5 degrees, as per the
Paris Agreement.
Entain plc | Annual Report 2022 22
Strategy in action
Ex-
ing
moments
cit-
EXTEND INTO
INTERACTIVE
ENTERTAIN-
MENT
unikrn
esports has rapidly developed an enormous following
with over 450 million followers worldwide, with a
betting market expected to be worth $12 billion by
2025. In 2022 we began the much-anticipated roll out of
unikrn, our revamped, dedicated global esports brand.
unikrn. unikrn offers three exciting ways to play; UMode
which empowers players to back their own skills and
bet on themselves in peer-to-peer action; unikrn Virtual,
which provides a non-stop stream of esport action
to bet on; and unikrn esportsbook, bringing premier
esports tournaments and the biggest sporting events
into one convenient place.
Entain plc | Annual Report 2022 Strategic report cit-
Overview
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23
Our success is built on the unique Entain Platform, which puts
the customer front and centre, to deliver our core strategic
goals of growth and sustainability. We are constantly working
to provide a richer and more engaging experience for our
customers, both existing and new. At the product level this
means a continuous process of optimising our sites, apps and
games to create the smoothest, most enjoyable experience.
BROADEN OUR
CUSTOMER
APPEAL
GROW
PRESENCE
IN EXISTING
MARKETS
Going Live with
Well Well Well
We’re in the business of exciting
customers by bringing them new formats
and thrilling experiences. That’s why last
year we reimagined some of our most
popular content as a live gameshow –
“Well Well Well LIVE”. Developed by our
award-wining in-house development
studio and using exclusive Entain games,
the groundbreaking format has proved to
be a smash hit, with our players placing
an average of 25 million bets each month
since launch. In fact, over 90% of our
live casino players have tried it, and
stickiness is more than double the levels
seen at other top ranked games, with
more than 55% of players returning to
play again.
Mates Mode
Down under, our Ladbrokes Australia team launched
it’s game-changing social betting experience; ‘Mates
Mode’. Seamlessly integrated into the Ladbrokes app,
the new feature enables customers to banter as they
bet, sharing content and bringing a whole new social
element playing together as a group. The new feature
was celebrated with an irreverent marketing campaign
showing our customers can “Ladbroke It Together.”
BROADEN OUR
CUSTOMER
APPEAL
Take it to the Bank
Through our award-winning gaming
development studios we are able to
bring our customers unique content
only available on Entain brands. Don’t
take our word for it though, in February
2023, Bigger Banker, created by our
very own CR Games, was named as
Game of the Year at the prestigious
International Gaming Awards.
The game has not just been a hit with
the critics but has been hugely popular
with players and one of the biggest
performers across our gaming brands.
Entain plc | Annual Report 2022 24
Strategy in action
World-
class
moments
LEADERSHIP
IN THE US
Super Bowl
After all of the fanfare and hype, it is safe to say Super Bowl
LVII delivered, with a spectacle both on and off the pitch.
We were proud to be at the centre of the action, with a huge
campaign including our first ever concert ‘BetMGM West Fest’
featuring Marshmello and Tim McGraw. BetMGM supported
the experience with some unbeatable promotions, which
helped make Super Bowl LVII BetMGM’s most successful
single game sporting event ever.
GROW
PRESENCE
IN EXISTING
MARKETS
Knockout advertising
Ladbrokes delivered a blockbuster
advertising campaign straight out of
Hollywood last year, with a world-first
application of new CGI technology.
Recreating the iconic running montage
from the original Rocky film, with a
Philadelphia backdrop, the original cast
was digitally replaced with hundreds
of modern sports people – horse riders,
drag queens, dancers, gymnasts, as well
as drummers and many, many others
– setting a new record for the biggest
character replacement in Hollywood
history. Part of Ladbrokes’ ‘We Play
Together’ campaign, Rocky brought
Ladbrokes to a whole new audience.
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class
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25
Providing a world-class
entertainment experience goes
beyond offering an award-winning
product offer. Working with 180
million user profiles, we have
unparalleled customer insight that
we use to engage our audiences
with new experiences, media content
and marketing to attract a broader
demographic of recreational players.
GROW
PRESENCE
IN EXISTING
MARKETS
The home of
horse racing
Coral has established itself as the
destination brand for horse racing
fans. As well as providing the most
comprehensive horse racing offer available,
in 2022 we launched the Coral Racing
Club, enabling our customers to experience
the thrill of racehorse ownership, win
thousands of tickets to race meetings, and
receive exclusive behind-the-scenes insight
and access to racing stables, all completely
free. The Club has a five strong team of
horses trained by some of the biggest
names in the business, Jonjo O’Neill, Joe
Tizzard, Rebecca Menzies and Scott Dixon.
Coral has also been busy bringing an
innovative VR experience to race courses,
allowing punters to experience the thrill
of a race. The Coral Racing Club has been
such a success that Ladbrokes Australia is
launching its own version down under.
BROADEN OUR
CUSTOMER
APPEAL
Gala Land
The insights provided by our platform
gives us a deep understanding of what
will attract, engage and entertain our
customers, with fresh campaigns tailored
to our specific brand audiences. A great
example of how we do this was our Gala
Land campaign last year, which feature
a group of five friends travelling in their
yellow camper van from the bottom to top
of Britain, in search of the perfect view
of five hot air balloons creating an epic
‘bingo’ in the sky. Encompassing three
product films, social media and a series
of new games, the campaign saw search
volumes for Gala Bingo jump 32% to their
highest ever levels.
Entain plc | Annual Report 2022 26
Strategy
in action Res-
pon-
siblemoments
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
27
Ensuring our customers stay safe and play within their
means will always be our number one priority. That is why
we developed ARCTM – Advanced Responsibility and CareTM
– our award-winning safer betting and gaming programme
which takes a technology-led intelligent approach to risk
reduction built on a foundation of academic research. Using
revolutionary AI technology, ARCTM puts a digital safety net
around our customers, operating in real-time, and crucially,
individually tailored for each customer, it is always working
invisibly in the background, stepping in when needed.
LEAD ON
RESPONSIBILITY
Protecting the Customer
ARC’sTM unique Protector Model encompasses 26 markers of protection, utilising data
from Entain’s activity-based algorithmic modelling. The accuracy of this modelling has
been independently assessed by EPIC Risk Management, the leading harm-minimisation
consultancy, to exceed 90%1.
Last year we continued to develop and enhance ARCTM, introducing additional real-time
interaction triggers, to modify player behaviour when the system’s AI identifies increased
risk factors. We also began the global roll-out of ARCTM, introducing the programme to 22
international markets.
We also led the way in the US with a collaboration of four of our leading peers to establish
the 12 Principles of Responsible Online Gaming in order to provide an industry benchmark
for responsible operators.
The success of this proactive approach was recognised by GamCare, the leading safer
gambling charity, who awarded Entain with their highest level Advanced Safer Gambling
Standard for digital operations. We are now working with regulators around the world to
see how the approach taken by ARCTM can be adopted to improve player safety.
1. EPIC Risk Management conducted an audit in 2022 that evaluated the accuracy
of the STEP model as 96% for the top 50 high-risk players, 92% for randomly
selected high-risk players, and 80% for randomly selected medium-risk players.
moments
Entain plc | Annual Report 2022 28
Strategy in action
Posi-
tivemoments
INVEST IN
PEOPLE AND
COMMUNITIES
Promoting grassroots sport
Our business is intrinsically tied to the world of sport and we are
proud of the role we play as a major supporter at the grassroots
and community level. Through our Entain Foundation we fund
projects around the world. 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 250 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, as they build towards the Paris Olympics.
Elsewhere we are backing community football projects in countries
including Italy, Germany, Spain, Austria, as well as across Latin
America and Africa.
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
29
Posi-
We have put sustainability on an equal footing to growth
as the two core elements of our strategy. Fundamental
to that philosophy is making 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.
Through our Entain Foundation, we have committed to
donating £100m to worthy causes over five years.
INVEST IN
PEOPLE AND
COMMUNITIES
Drive Diversity
forward with
McLaren
We have a passion for driving the
conversation around diversity across
the industry. In 2022 we announced a
new partnership with McLaren Racing
to support women returning to the tech
sector. Through our joint returnship
programme, we aim to help reignite the
careers of women returning to roles in
STEM (Science, Technology, Engineering
and Mathematics). This initiative builds on
the objectives of our EnTrain programme,
which is designed to positively impact
1 million lives through the promotion of
greater diversity in technology by 2030.
INVEST IN
PEOPLE AND
COMMUNITIES
Reducing
environmental impact
Having led our industry in being the first
to set the target to net zero for carbon
emissions throughout our operations by
2035, over the past year we have been
developing our plans to deliver against
this ambitious target. We have run an
extensive series of climate strategy
workshops encompassing all areas
of our operations to identify where
and how we can eliminate or minimise
carbon emissions from our work streams.
We have formally submitted our aims to
the Science Based Target initiative.
Entain plc | Annual Report 2022 30
The industry in which we operate
Online Europe
Geographically, the combined Online UK
and European market represented 44%
of the total online gaming market in 2022.
The UK online market declined by 4%,
due to a combination of some customers
returning to retail following the lifting
of Covid-related restrictions and the
impact of increased affordability checks.
The European online market continued to
perform strongly, up 12% year-on-year in
part due to increased engagement from
new customers.
The next largest market is the unregulated
Asia market which represents 26% of
the global total, followed by regions that
are part regulated, part unregulated
including North America (18%), Oceania
(7%), Latin America (3%), and Africa (2%).
Excluding Asia, Entain has online operations
in countries in these regions.
Online Market by Product
Online growth has been driven by product
development, with the fastest growing
product areas, betting and casino, growing
at 12% and 15% vs. 2021 respectively.
Entain’s brands offer online betting, casino,
bingo, and poker: these products represent
88% of the total online gaming market
in 2022.
Global Online Growth
Entain only operates in domestically
regulated and regulating markets. The total
global online gaming market which
also includes unregulated markets, was
estimated to be worth c£89bn in 2022.
Over the past eleven years the market
grew at 15% CAGR and growth from 2021
to 2022 was 13%, in part driven by the
increasing number of US states legalising
online gaming.
15%
The global online market
grew at 15% CAGR over
the last 10 years.
44%
88%
UK and Europe represent almost half
of the global online gaming market
in 2022.
Online betting, casino, bingo and poker
represented 88% of all online gambling
in 2022, with betting and casino
forecast to have grown 27% globally.
Share of Global online market
by region
Share of Global online market
by product
n
b
9
8
8
£
.
.
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0
9
7
£
.
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6
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.
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4
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.
n
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4
2
2
£
6 7
1
5
4
3
2
1. UK
2. Europe
3. Asia/Middle East
4. North America
5. Oceania
6. Latin America/Caribbean
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
6
1
0
2
7
1
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8
1
0
2
9
1
0
2
0
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0
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1
2
0
2
2
2
0
2
7. Africa
Source: Data provided by H2 Gambling Capital,
unless otherwise indicated.
456
3
2
1
9%
1. Betting
35%
26%
18%
7%
3%
2%
2. Casino
3. State lotteries
4. Poker
5. Bingo
6. Skill/other gaming/
commercial lotteries
54%
28%
12%
3%
2%
1%
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
31
Retail
Entain’s key retail operations are in the UK,
Italy, Belgium, Republic of Ireland (ROI)
and Croatia.
The UK Retail market (excluding lotteries)
is estimated to be worth £6.8bn in 2022, a
rise of 172% as the sector bounced backed
strongly from the restrictions imposed
during the pandemic.
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 with
an estimated 45% market share.
The Italian retail sports betting market is
estimated to be worth £1.1bn in 2022, up
from £0.7bn in 2021 as the market emerged
from Covid restrictions. Entain operates
via the Eurobet brand as the 3rd largest
operator in the market for over the counter
sports betting in Italy.
ROI and Belgium retail betting markets
are much smaller, estimated to be worth
£1.4bn and £0.1bn respectively in 2021.
Entain operates in Belgium and ROI via the
Ladbrokes brand and is the largest operator
in Belgium and third largest in ROI. Croatia,
a new market for Entain, is smaller, valued
at £0.2bn in 2022.
>85%
Four operators account for over
85% of all UK betting shops.
11%
Online gaming is forecast to grow 11%
CAGR between 2021 and 2027, with
the US growing at 23%.
t
e
k
r
a
M
l
a
t
o
T
n
b
£
–
e
z
S
i
g
n
i
t
t
e
B
i
o
n
s
a
C
i
s
e
n
h
c
a
M
o
g
n
B
i
y
r
e
t
t
o
L
UK
Italy
ROI
6.8 19% 12% 33% 3% 33%
15.1
7% 1% 52% 2% 38%
1.1 30% 4% 23% 3% 40%
Belgium
1.4 21% 7% 29% 0% 42%
Croatia
0.2 34% 28% 27% 0% 12%
(Entain areas of operations are highlighted)
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% CAGR over the next five years.
UK Retail betting and gaming is forecasted
to grow 2% CAGR post the pandemic
between 2023 to 2026. Our smaller Retail
businesses in Italy, Belgium, ROI and
Croatia are forecast to be flat between
2023 and 2026.
£bn
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
1
2
0
2
E
2
2
0
2
E
3
2
0
2
E
4
2
0
2
E
5
2
0
2
E
6
2
0
2
E
7
2
0
2
Global Online
Italy Retail (Betting)
UK Retail
(Betting & Gaming)
Belgium Retail (Betting)
ROI Retail (Betting)
Entain plc | Annual Report 2022
32
How we create value
Our business model is grounded in our purpose. We bring moments of
excitement into people’s lives by understanding and responding to customers’
needs, particularly as they evolve. This 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.
We deliver a differentiated
customer experience...
Enhanced
content and
media
experience
OUR
PURPOSE
Bring moments
of excitement
into people’s lives
Deep
experience in
real money
gaming
The Entain
platform
Expanded
interactive
entertainment
experience
Deep experience in
real money gaming
At the core of our business is providing
the most exciting sports betting
and gaming experience. Via the
Entain Platform we have the most
comprehensive offer in the market, we
are continuously innovating, producing
unique in-house developed content,
available exclusively through our
brands.
Enhanced content and
media experience
Providing a world-class entertainment
experience goes beyond offering
an award-winning product. We
are constantly working to provide a
richer and more engaging experience
for our customers, encompassing
everything from free-to-play games,
videos and podcasts through to real-
world, money-can’t-buy competition
experiences.
Expanded interactive
entertainment experience
While we enrich the betting and
gaming experiences in our core
products to entertain our customers
every day, we are also looking to the
future, expanding our horizons to
develop new, cutting-edge products
which will thrill our customers
tomorrow and beyond.
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
33
...the Entain Platform
sits at the centre of
our business model...
... creating value
for all our
stakeholders
1
2
3
4
5
6
7
8
Differentiating us from our peers, with
unique competitive advantages
Leverage of truly global scale
Operating at a global level creates multiplier effects that
drive out-performance in each of the markets in which we
operate
Read more: pages 15 to 19
Dynamic content creation
Our award-winning in-house development studios enable
us to create exclusive content and innovate to provide our
customers with a richer, more engaging experience
The industry’s leading talent
Our people are our number one asset and our ability to
attract and retain the best minds both within and beyond the
industry is key to our success.
Gaming’s favourite brands
We offer over 25 leading brands, some dating back more
than 135 years, offering customers a great trusted offer
Marketing and customer excellence
Our customer CRM capabilities and player analytics enable a
powerful data-led approach to marketing
Cutting-edge technology
By owning and operating our own technology we can
be more flexible and adaptable, keeping us ahead of the
competition and enabling us to expand into new markets,
provide great products and lead on responsibility
Unrivalled M&A integration execution
We have a proven track record in successfully acquiring,
integrating and growing businesses, enabling us to enter
new markets and build further scale
Customers
Online performance
+7%
Growth in Active players 2021-22
Read more: page 14
Our people
Satisfaction
87%
Read more: pages 53 to 56
Communities
Entain Foundation
£100m
committed over five years
Read more: pages 57 to 59
Investors
Underlying EBITDA
Regulatory Expertise and Responsibility
As the world’s only global operator operating exclusively in
regulated and regulating markets we have unparalleled experience
of working with regulators coupled with an uncompromising
approach to player safety
£993.2m +13%
2021: £881.7m
Read more: pages 36 to 37
Read more: pages 70 to 81
Entain plc | Annual Report 2022 34
Our strategic framework
Our vision
The world leader in betting, gaming
and interactive entertainment
2022 priorities
Growth
1 – Leadership in US
Clear ambition to be the leading operator in the US sports
betting and iGaming market through BetMGM.
2 – Grow presence in existing markets
Continue to grow rapidly in the >40 territories in which we
already operate.
3 – Expand into new regulated markets
Significant opportunities exist to expand into new regulated
markets through organic opportunities as well as M&A.
2022 progress
Priorities for 2023
KPIs
Risks
Remuneration
Established as top-three US operator, BetMGM achieved a
18% market share overall in the markets which we operate
in and a leading market share of 30% in iGaming. Now live
in 26 markets, reaching 48% the adult US population as
well as operating in Ontario, Canada.
Increased number of First Time Depositors and active
players while growing market share in key markets,
demonstrating our ability to attract, engage and retain
players. Online NGR growth on a compound annual basis
over the last three years is 12% (cc)
Five transactions announced during 2022, including Sports
Interaction (Canada), Klondaika (Latvia), Totolotek (Poland)
and BetCity (Netherlands). Established Entain CEE, and
acquired SuperSport (Croatia), to create a strategic
platform in Central and Eastern Europe.
¥ Enter new states as they
Market access
¥ Technology failure.
¥ Executive annual bonuses
are linked to Operating
Profit, Online NGR growth
and safer betting and
gaming targets and
customer metrics.
¥ Loss of key locations.
¥ Trading, liability and
pricing management.
¥ Strategy execution in
growth markets
¥ Trading, liability and
pricing management
4 – Extend into interactive entertainment
Grew actives by 7% Online to achieve new record levels.
Entain is at the forefront of leveraging opportunities
created as new technology-enabled forms of entertainment
continuously evolve.
Continued to expand media, content and interactive
entertainment across our major markets. Launched unikrn’s
esports offer in Brazil and Canada.
Sustainability
5 – Lead on responsibility
Provide the safest experience for our customers and encourage
the industry to follow our lead. Continuously upgrade and
personalise our protections for customers.
6 – Diversify our regulated activities
Operating in a well-structured regulatory regime enables us
to deliver higher quality earnings with greater certainty and
sustainability of earnings as we continue to grow and expand
our global footprint and scale.
7 – Broaden our customer appeal
Attracting and retaining an increasingly recreational audience
by providing a safe and engaging entertainment experience,
enables us to generate sustainable returns.
8 – Invest in our people and communities
Ensure Entain is the best place to work while contributing to
communities where we are based and operate.
Delivered enhancements to our Advanced Responsibility
& Care™ (“ARC™”) programme which uses technology
to proactively intervene to prevent betting and gaming
related harm developing. Rolled-out ARC™ to 22
international markets.
Having accelerated our plans in January 2023, Entain
is the only global operator with 100% of revenues from
domestically regulated or regulating markets.
From February 2023, 100% of our revenues are from
regulated or regulating markets
Introduced further enhancements to our customer
proposition with new games, experiences, products and
content, documentaries and social channel interactions
Through our Entain Foundation we continued to invest in
safer gambling programmes, grassroots sport and diversity
through technology projects.
Launched our new DE&I strategy.
regulate with market
leading customer offer.
¥ Continue to innovate in
existing markets focusing
on product, brands
and marketing.
¥ Identify new opportunities
in the 40+ regulated
markets where we do not
currently operate.
¥ Deliver new customer
propositions outside of our
traditional product offer.
150m
people
Group NGR growth
+12%
Online NGR
£3,050.5m
Underlying EBITDA
£993.2m
Work with regulators in all
our markets to implement
and/or improve regulations
for customers and work
towards licencing, in still-
regulating markets
Further evolve and roll-
out ARC™ and increase
investment in all areas
of research, education
and treatment
of problematic behaviour.
Safer betting and gaming
metric continues to make-
up 15% of 2023 bonus
payments for all office
based employees.
Continue roll-out of
Foundation investment
programmes to more
international markets.
87%
Employee satisfaction with
approach to wellbeing
2035
Target set for carbon Net
Zero throughout operations
£100m
Commitment to Entain
Foundation over five years
¥ Ensuring our customers are
¥ Safer betting and gaming
£18.3m
properly protected.
¥ Ensuring health, safety and
Contribution to safer betting
wellbeing of our people.
and gaming initiatives
metric and customer
satisfaction metrics
implemented for 2022
bonus schemes.
¥ Ability to recruit and
retain employees.
¥ Data breach and
cybersecurity.
¥ Changes in betting and
gaming legislation.
¥ Changes in betting and
gaming tax regimes.
Entain plc | Annual Report 2022 Strategic report
The world leader in betting, gaming
and interactive entertainment
Our vision
2022 priorities
Growth
1 – Leadership in US
Clear ambition to be the leading operator in the US sports
betting and iGaming market through BetMGM.
2 – Grow presence in existing markets
Continue to grow rapidly in the >40 territories in which we
already operate.
3 – Expand into new regulated markets
Significant opportunities exist to expand into new regulated
markets through organic opportunities as well as M&A.
Established as top-three US operator, BetMGM achieved a
18% market share overall in the markets which we operate
in and a leading market share of 30% in iGaming. Now live
in 26 markets, reaching 48% the adult US population as
well as operating in Ontario, Canada.
Increased number of First Time Depositors and active
players while growing market share in key markets,
demonstrating our ability to attract, engage and retain
players. Online NGR growth on a compound annual basis
over the last three years is 12% (cc)
Five transactions announced during 2022, including Sports
Interaction (Canada), Klondaika (Latvia), Totolotek (Poland)
and BetCity (Netherlands). Established Entain CEE, and
acquired SuperSport (Croatia), to create a strategic
platform in Central and Eastern Europe.
4 – Extend into interactive entertainment
Grew actives by 7% Online to achieve new record levels.
Entain is at the forefront of leveraging opportunities
created as new technology-enabled forms of entertainment
Continued to expand media, content and interactive
entertainment across our major markets. Launched unikrn’s
esports offer in Brazil and Canada.
continuously evolve.
Sustainability
5 – Lead on responsibility
Provide the safest experience for our customers and encourage
the industry to follow our lead. Continuously upgrade and
personalise our protections for customers.
6 – Diversify our regulated activities
Operating in a well-structured regulatory regime enables us
to deliver higher quality earnings with greater certainty and
sustainability of earnings as we continue to grow and expand
our global footprint and scale.
7 – Broaden our customer appeal
Attracting and retaining an increasingly recreational audience
by providing a safe and engaging entertainment experience,
enables us to generate sustainable returns.
8 – Invest in our people and communities
Ensure Entain is the best place to work while contributing to
communities where we are based and operate.
Delivered enhancements to our Advanced Responsibility
& Care™ (“ARC™”) programme which uses technology
to proactively intervene to prevent betting and gaming
related harm developing. Rolled-out ARC™ to 22
international markets.
Having accelerated our plans in January 2023, Entain
is the only global operator with 100% of revenues from
domestically regulated or regulating markets.
From February 2023, 100% of our revenues are from
regulated or regulating markets
Introduced further enhancements to our customer
proposition with new games, experiences, products and
content, documentaries and social channel interactions
Through our Entain Foundation we continued to invest in
safer gambling programmes, grassroots sport and diversity
through technology projects.
Launched our new DE&I strategy.
Overview
Strategic report
Governance
Financial statements
35
Key:
Achieved
On target
Not achieved
Our purpose
Bring moments of excitement
into people’s lives
2022 progress
Priorities for 2023
KPIs
Risks
Remuneration
¥ Executive annual bonuses
are linked to Operating
Profit, Online NGR growth
and safer betting and
gaming targets and
customer metrics.
¥ Enter new states as they
regulate with market
leading customer offer.
¥ Continue to innovate in
existing markets focusing
on product, brands
and marketing.
¥ Identify new opportunities
in the 40+ regulated
markets where we do not
currently operate.
¥ Deliver new customer
propositions outside of our
traditional product offer.
Market access
¥ Technology failure.
¥ Loss of key locations.
¥ Trading, liability and
pricing management.
¥ Strategy execution in
growth markets
¥ Trading, liability and
pricing management
150m
people
Group NGR growth
+12%
Online NGR
£3,050.5m
Underlying EBITDA
£993.2m
¥ Ensuring our customers are
¥ Safer betting and gaming
properly protected.
¥ Ensuring health, safety and
wellbeing of our people.
metric and customer
satisfaction metrics
implemented for 2022
bonus schemes.
¥ Ability to recruit and
retain employees.
¥ Data breach and
cybersecurity.
¥ Changes in betting and
gaming legislation.
¥ Changes in betting and
gaming tax regimes.
Work with regulators in all
our markets to implement
and/or improve regulations
for customers and work
towards licencing, in still-
regulating markets
Further evolve and roll-
out ARC™ and increase
investment in all areas
of research, education
and treatment
of problematic behaviour.
Safer betting and gaming
metric continues to make-
up 15% of 2023 bonus
payments for all office
based employees.
Continue roll-out of
Foundation investment
programmes to more
international markets.
£18.3m
Contribution to safer betting
and gaming initiatives
87%
Employee satisfaction with
approach to wellbeing
2035
Target set for carbon Net
Zero throughout operations
£100m
Commitment to Entain
Foundation over five years
Read more: pages 38-61
Read more: pages 82-88
Read more: pages 116-152
Entain plc | Annual Report 2022
36
Regulatory update
Gaming is a truly global market and in 2022 the Group held licences in over 30
jurisdictions across the world. The Group only operates in domestically regulated
or regulating markets and as from February 2023, 100% of the Group’s revenue
is from such markets. The Group firmly believes that strong, commercially viable
regulation of the betting and gaming sector is in everyone’s interests. It provides
stability for operators, important taxation streams for governments and – most
importantly – it provides the consumer with proper protections and safeguards
by ensuring that only responsible providers operate in the market.
The UK
United States
Germany
The UK Government’s review of
the 2005 Gambling Act is ongoing.
Originally expected in 2022, the publication
of a white paper setting out its conclusions
is now expected sometime in 2023.
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 to more robust regulation on
player protection.
The sports betting regulatory activity
continues at pace in the United States.
New York, Kansas, Louisiana and Ohio
are amongst the US states that have
regulated and launched their sport betting
markets in 2022 or early 2023. The state of
Massachusetts has also regulated its sports
betting market, which will go live in March
2023. Following the failure of the California
sports betting referendum, the key state
that will consider regulating its market in
2023 will be Texas. In parallel, a number
of additional states are considering online
casino licensing, with Indiana and New
York having the best chance of completing
the process in the near term and possibly
in 2023. Finally, numerous states up and
down the country, including New Jersey,
Colorado, Ohio, and Massachusetts have
or are in the throes of adopting modernised
forms of responsible gambling regulation;
a trend the Group welcomes with an eye
on the long term sustainability of the
US market.
In light of the fact that some 35 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
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 2022, the new Joint Gambling
Authority (“GGL”) in Saxony-Anhalt
assumed responsibility for combating
illegal online gambling. For the first time
ever, the competences and corresponding
enforcement instruments (e.g. IP blocking
and payment blocking) are now harmonised
across German states. In addition to
creating a domestically regulated market,
this can be seen as an essential building
block for the successful regulation of the
gambling market and we look forward
to the GGL imposing tougher regulatory
oversight and expulsion of illegal operators
during 2023.
The Group was granted three slots and
two poker licences in November 2022.
Additionally, the Group´s sports betting
licences were extended for another 5 years
in December 2022.
Unlike slots and poker, casino table games
will be regulated on a state-by-state basis.
The states may either create a monopoly
or issue as many licences as the state has
land-based casinos. By the end of 2022,
only the states of Schleswig-Holstein and
North Rhine-Westphalia had opted for a
licensing system. To date, only Schleswig-
Holstein has released the tendering
process, but the Group has opted not to
apply for a licence for commercial reasons.
In North Rhine-Westphalia, details on the
tendering process are not expected before
summer 2023. Entain looks forward to
participating in this process.
Furthermore, the state aid complaint lodged
at an EU Commission level against the
legality of the 5.3% stake tax on virtual slots
within German regulation is still ongoing.
Other Europe
In the Netherlands, we completed
the acquisition of BetCity in January
2023 to give us a regulated presence.
Our applications for licenses for our bwin
and party brands are ongoing, however
further regulatory changes have
Entain plc | Annual Report 2022 Strategic report
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37
complicated the application process.
Looking ahead, a wide-reaching ban on
untargeted advertising is set to come into
effect in late Q1 2023, while we expect the
government will also come forward with
proposals on playing limits later in 2023.
In Belgium, a new €200 weekly deposit
limit came into effect while a pending
Royal Decree looks set to impose a wide-
reaching ban on gambling advertising
from mid-2023. There has been little
regulatory progress in Austria where the
government has failed to come forward
with the market reforms it announced in
March 2021. Nevertheless, we continue to
advocate for pragmatic reforms whilst also
exploring other possible avenues to enter
the regulated market.
In Italy, we also received confirmation at
the end of 2022 that our online and retail
licence concessions will be extended
until December 2024, while in Greece
the maximum stake limit for online casino
games was increased from €2 to €20.
In Spain, the regulator has also indicted
its desire to explore harmonised spending
limits across operators, while a new Royal
Decree on responsible gambling is expected
to impose further restrictions from Q1 2023.
Elsewhere in 2022, we saw positive
progress towards the introduction of a
licencing regime in Finland. In Hungary,
new sports betting legislation has led us
to make changes to our offering in the
market. Our acquisitions of Totolotek and
SuperSport saw us enter the regulated
Polish and Croatian markets respectively.
A further National Consumer Protection
Framework measure was implemented
in July 2022, with all wagering service
providers required to issue activity
statements on a monthly basis, to
customers who were active during that
month. A template statement was provided
for operators to adopt, which provides
customers with a graph showing net results
for the month, and comparison to the
previous six months. Seven new taglines
and call to actions for wagering advertising
were also announced, including “chances
are you’re about to lose”, “You win some.
You lose more”. This new messaging will be
required to replace “Gamble Responsibly”
from April 2023. There were further delays
to the implementation of the national self-
exclusion register (Betstop) due to security
and data concerns, but this is expected to
be launched in 2023.
In September 2022 the House of
Representative Standing Committee on
Social Policy and Legal Affairs commenced
an inquiry into online gambling and its
impacts on people with gambling problems.
The Committee is comprised of MPs
from different political parties. Over 130
submissions were lodged, including
a submission from Entain Australia.
Entain Australia will seek to appear at a
hearing in April 2023. While the terms of
reference are broad, there has been a focus
on gambling advertising and impacts on
younger people.
2022 Global online gross
gaming revenue
In 2022 online global gross gaming revenue
was estimated to be valued at £63.8bn1.
Below are the largest 15 markets that
are either regulated or in the process
of regulating.
Canada
United States
£12,468.0m
The Ontario online betting and gaming
market became regulated on 4 April 2022,
thereby becoming the first Canadian
Province to issue domestic licenses for
private operators. Entain operates in
Ontario through its bwin and Party brands
as well as Sports Interaction, a Canadian
brand the Group acquired in February 2022.
Going forward, other Canadian Provinces
such as Alberta and British Colombia are
expected to introduce regulation.
Latin America
The Group was one of the first global
operators to obtain a Colombian online
betting and gaming licence in late 2020.
As a result of political changes, the Brazilian
sports betting market is still awaiting
regulation; the Group nevertheless expects
that regulation will take place during 2023.
In addition, Peru is also expected to become
domestically regulated in the second half of
2023. In parallel, the Chilean government
also continues pondering regulating online
gambling in its territory.
Entain continues to explore regulated
opportunities in Africa and secured its
first online gambling licence in Zambia in
2022. The Group is also hopeful of securing
an operating licence in Kenya in the
coming months.
Esports
Jurisdictions that have regulated online
sports betting in most instances allow
for esports betting markets as well.
This applies to markets such as the UK,
numerous US states, Ontario as well as EU
jurisdictions. The Group expects that the list
will grow further going forward as esports
and esports betting gain prominence.
The Group is also taking steps to secure
regulation of alternative esports betting
formats, such as unikrn’s UMode”.
United Kingdom
£7,774.9m
Australia
£4,168.5m
Italy
£3,668.9m
Germany
£3,232.7m
France
£2,927.9m
Canada
£2,403.0m
Sweden
£1,512.7m
The Netherlands
£1,439.2m
Brazil
Spain
£1,211.7m
£1,117.6m
Belgium
£1,007.4m
Greece
Finland
Denmark
£955.4m
£913.9m
£809.7m
Read more about our engagement
with regulators: page 65
1. Source: H2 Gambling Capital (including both regulated
and non-regulated GGR).
Australia
Africa
Entain plc | Annual Report 2022
38
Our commitment
to sustainability
IN THIS
SECTION
39
43
47
52
56
57
60
Our Commitment to Sustainability
Safer better and gaming
Seven Principles
Investing in people and communities
Our economic contributions
The Entain Foundation
Reduce environmental impact
Entain plc | Annual Report 2022
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39
At Entain, we have proudly placed sustainability on an equal footing with 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 the four pillars below.
Regulation
Responsibility
Corporate
Governance
People &
Communities
Commitments:
Only operate in
regulated markets
Commitments:
Lead the industry on safer
Commitments:
Best-in class
betting and gaming
corporate governance
Commitments:
Best place to work
Net-zero greenhouse
gas (“GHG”) emissions
by 2035
Promote diversity in and
through technology
2022 highlights:
100% of revenues from
domestically regulated or
regulating markets
Exited nine markets
with no clear path to a
sustainable and safe
regulated betting and
gaming industry1
2022 highlights:
Successful roll-out of our
pioneering ARC™ player
protection programme
outside the UK to 22
international markets
Increased UK
contributions to Research,
Education and Treatment
(“RET”) to 0.75% of GGY
2022 highlights:
Publication of Entain’s
2022 highlights:
14% reduction of GHG
first-ever Board
Diversity Policy
Rolled out an extensive
‘Big Six’ training
programme covering
areas such as Code of
Conduct, prevention of
bribery & corruption and
tax evasion, governance,
risk and compliance
emissions from the
prior year, with 100%
renewable energy in the
UK and ROI retail estate
Partnered with McLaren
Racing to launch a
brand-new Returnship
programme
Long-term sustainability = Long-term success
1. Entain finalised those exits in January 2023. When we publish this report, 100% of
the Group’s revenue come from domestically regulated markets where it is licensed
except for a small number of markets where we expect changes in regulation or
partnering with a locally licenced operator.
Entain plc | Annual Report 2022 40
Sustainability continued
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 and
its stakeholders. Our best-in-class Governance is overseen by 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 monthly, 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 Group Head of Sustainability and Chaired by our Chief
Governance Officer, the Group oversees the implementation of our
sustainability strategy.
Board
Strategy
ESG Committee
ESG Steering Group
Oversight
Operating units
Central functions
Co-ordination
Operational teams
Delivery
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41
Our performance across ESG ratings providers
We are proud to be a sector leader amongst many of the leading
independent ESG rating 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,
with the aim of further improving the standards for our industry and
in these external assessments.
Agency
Rating
Evaluation
Score
Industry rank
Current
Previous
MSCI
ESG Score
AA
6.6
6.5
N/A
Sustainalytics
ESG Risk Rating
Medium risk
ISS ESG
ESG Score
C-
S&P Global
ESG Score
S&P Yearbook and DJSI
Europe constituent
22
47
67
22
15/88 in the
Casinos & Gaming
Subindustry
45
2nd highest decile
67
96th percentile
FTSE4Good
ESG Score
Inclusion in
FTSE4Good Index
3.8
3.4
94th percentile (85th)
CDP
Climate
Management
B
B-
Addressing the
environmental
impacts and
ensuring good
environmental
management
Entain plc | Annual Report 2022 42
Sustainability continued
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 young and vulnerable through better colleague
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 the design
Promotion of safer betting and gaming
Preventing betting and gaming from being used to support
crime or associated with crime
Talent attraction and retention
Diversity and equal opportunity
In 2022, we commenced a project to conduct a full-scale review
of our materiality assessment framework. This update will draw
upon evolutions in materiality best practices, 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 are
finalising 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 2023 ESG Report.
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Safer betting and gaming
Through our award-winning Safer Betting and Gaming
programme, we take a holistic approach to protecting the customer,
investing millions into research, education, and treatment. In 2022,
we continued rolling out ARC™ – our Advanced Responsibility and
Care™ programme – which takes a technology-led 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 is always
working discretely in the background stepping in when needed.
We were pleased to see the success of our approach recognised
in 2022 with the award of the Advanced Safer Gambling Standard
by GamCare, the leading UK safer betting and gaming charity.
Entain was awarded the highest level of accreditation (Advanced
Level 3) for its online activities, and Advanced Level 2 for its land-
based activities, underlining Entain’s sector-leading approach
to safer gambling. In addition to the ARC™ programme, which
supports the pillars of our Changing for the Bettor strategy, we
continue to deliver on the seven areas through our other initiatives,
as outlined in the following pages.
2
1
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 best understand the issues and
then 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.
3
Promote
responsible attitudes
Through advertising, marketing
and sponsorships we’re
promoting social responsibility.
4
Empower customers
Within our products, we’re
adding tools that help customers
to gamble safely. These tools
enable customers to self-
govern their gambling activities.
Our processes allow us to monitor
individual player behaviour and
where appropriate recommend
particular tools or advise the
customer to take a break.
5
Fund treatment for
those in need
We’re funding treatment and
support for people who suffer
from gambling harm.
6
Champion responsible
product design
With ‘responsible design’
principles, we’re making sure our
products are safe as well as fun.
7
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.
Entain plc | Annual Report 2022 44
Advanced Responsibility & Care™: Using data and
technology to provide sector-leading player protection
We can now demonstrate that ARCTM is
successfully decreasing harmful behaviours
amongst our players. In 2022, ARCTM helped
more than half higher-risk customers
de-escalate their risk level.
ARC™ is our industry-leading
pioneering approach to customer
protection and the driving force
behind our vision to be the go-
to platform for safe play. ARC™
switches our player protection
approach from reactive to proactive
by allowing players to receive the
intervention they need in real-time,
not after the fact. 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
– providing a digital safety net for all
our customers. In 2022, we improved
the accuracy of our predictive tools
by launching a new hybrid model that
identifies both short and long-term
excessive play. We also introduced
15 new safer gambling features and
began the roll-out of ARC™ outside
of the UK, with phase one of the
programme going to 22 international
markets and phase two with real-
time interactions live in 10 markets.
After a focus on implementation in
2021, we can now demonstrate that
ARCTM is successfully decreasing
harmful behaviours amongst our
customers and helping them to keep
their playing safe. Across the year,
ARCTM helped more than half higher-
risk customers deescalate their risk
level and achieve a 36% reduction in
at-risk customers overall.
How does ARCTM identify high-risk behaviours?
ARCTM technology allows us to identify
customers who need our support the
most, intervening with measures that
are specific to their needs. With the
launch of Long-term Excessive Play
(“LTEP”) in 2022, ARCTM now operates
a hybrid model that accurately detects
both short and long-term excessive play.
Our new LTEP model complements
STEP by detecting customers who are at
risk of causing themselves harm over the
long term. LTEP identifies changes in a
player’s habits over a longer period, for
example picking up on a slow but steady
increase in cancelled withdrawals or
repeated deposits on loss. We found
that LTEP detects high-risk customers
with 88%2 accuracy and that the overlap
with the players identified by STEP is
only 20%, showing the importance of
both models.
Our Short-Term Excessive Play (“STEP”)
model is sensitive to large daily spikes
in customer activities. STEP draws
upon 26 research-backed markers
of protection – over three times more
than in our 2020 model – going beyond
merely financial markers to include other
behavioural characteristics. Examples of
these markers include fluctuations
in stake levels, erratic play during a
single session, or signs that a customer
might be chasing losses. In 2022, EPIC
Risk Management, the leading harm-
minimisation consultancy, conducted
an audit of the STEP model and found
it to identify high-risk behaviours with
92%1 accuracy.
We continue refining the markers
underpinning STEP and LTEP 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.
Strategic report Entain plc | Annual Report 2022 Overview
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45
We have fundamentally changed
our approach from responding to
problems to preventing them in
the first place.”
Jette Nygaard-Andersen
Entain’s CEO
How does ARCTM
protect players?
With ARCTM, we made step-change
improvements in the safer betting and gaming
tools that we provide 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 2022, we added to the on-site interceptors that
enable us to intervene and speak to a customer
quickly. For example, we worked with Professor
Mark Griffiths of Nottingham Trent University on
a Safer Gambling Questionnaire to interact with
players who present a medium risk of harmful
gambling. The questionnaire is made of four
short self-assessment questions that help us
better understand a customer’s playing habits.
Based on their answers, we may offer them a
personalised gambling control tool, refer them
for a chat with our player protection team, or
suspend their account in real time.
We also made additions to our safer gambling
tools. We launched a budget calculator to help
players understand what they can and can’t
afford so that they can continue playing safely.
We also updated our safer gambling help
page, providing players with seamless access
to engaging research-backed safer gambling
support and content.
How does ARCTM
prevent harm using
real-time interventions?
With ARCTM, we use real-time data and
advanced analytics to immediately help
customers who start exhibiting signs of
unusual behaviours. For example, we can
detect 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
set a control themselves, we will step in
and prevent further deposits from 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.
1. EPIC Risk Management conducted
an audit in 2022 that evaluated the
accuracy of the STEP model as 96% for
the top 50 high-risk players, 92% for
randomly selected high-risk players,
and 80% for randomly selected
medium-risk players. We report here
the result for Top 50 High Risk to allow
for year-on-year comparison as other
data is not available for 2021.
2. EPIC Risk Management evaluated the
accuracy of the LTEP model as 96% for
the Top 50 High Risk players, 88% for
Randomly Selected High Risk players,
and 90% for Randomly selected
Medium Risk players.
Entain plc | Annual Report 2022 46
Safer betting and gaming continued
ARCTM Results
An assessment of ARC’sTM performance in the UK in
2022 found:
Over 3.7m interactions and interventions proactively
delivered for more than 670,000 unique players
ARCTM is driving uptake in our gambling controls with 97%
of higher risk, and over 73% of medium risk customers using
gambling controls following interventions
The most successful ARCTM model* resulted in a 36% drop in
customer risk rating following an intervention
*Based on ARC’sTM to real time unusual deposits feature
In 2022, we expanded our real-time
capabilities. We developed new tools
to detect unusually long-playing
sessions, larger withdrawals, an
excessive number of payment methods
and bank-declined deposits. We also
reduced the threshold to interact with
customers regarding their playing
habits. We are now engaging earlier
with more customers and, as a result,
we found that fewer players need us to
intervene with mandatory controls or
account suspension. This shows that
our messaging is successfully reducing
risk-conducive behaviours before they
become a problem.
What are our plans for 2023?
ARC™ is continually improving, with regular testing and expert
analysis to further enhance player protection. In 2023, we will
continue to build on the success of ARC™ by implementing it across
all our markets as well as our retail shops.
Entain have worked with us
throughout the year to ensure
that the ARCTM programme is
growing in the right way and
achieving the aim of the project
to identify the behaviours that
can lead to harmful gambling.”
Dan Spencer
Director of Safer Gambling at EPIC Risk Management
Gambling controls: we will work with experts to increase the
efficacy of our gambling controls, including our mandatory Play
Break for customers playing unusually long sessions.
Real-time tools: we will add a new real-time tool to detect
customers intensifying their playing to recoup previous losses –
also referred to as chasing losses.
International: we will continue the international roll-out of ARCTM,
introducing it into our global operations. We will adopt a staged
approach 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.
Retail Shops: we will take what we learn with ARCTM in a digital
environment and adapt it to our retail shops. We will refine the
behavioural indicators we use to detect customers at risk in our
shops, training our shop colleagues to spot subtle signs of harmful
gambling and effectively communicate with customers.
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 2022, 15% of the Group annual bonus scheme was
based on the business demonstrating that the ARC™ models are
successfully influencing customer behaviours, implementing ARC™
in nine additional markets outside the UK, and achieving high
levels of completion for the Safer Gambling training. To ensure the
credibility of the process, we commissioned EPIC Risk Management
to provide an independent review which determined that we met
our targets for the year. In 2023, the ESG component of our Group
annual bonus scheme will continue to focus on safer gambling to
incentivise the roll-out of ARC™ across our global operations and
its adaptation to the retail environment.
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47
7 Principles
1
Understand the problem
and find the best solutions
Entain’s cutting-edge research
collaboration with Cambridge
Health Alliance Division on
Addiction, a Harvard Medical
School Faculty
Investment in research is fundamental to Entain’s commitment
to better understanding and reducing the potential for problem
gambling behaviours to develop. We have developed long-term
research partnerships with world-leading institutions in safer
betting and gaming, which shape our player protection practice
and the development of the ARCTM programme.
Our flagship research programme is a five-year research
collaboration with Cambridge Health Alliance Division on
Addiction, where we have committed $5.5m over five years.
You can read more about this collaboration on page 48.
In the US, we have partnered with the University of Nevada,
Las Vegas, and their International Gaming Institute (“IGI”).
With Entain’s founding grant, the IGI launched a pioneering
gaming and health initiative in 2022 that, for the first time in the
US, combines scientific research with operational expertise to
apply best practices in responsible betting and gaming, policy, and
health. The programme offers online educational activities and
served as the go-to resource for entities like the NFL, US Soccer, the
Japanese Government, Ya’amava Resort, Las Vegas Sands, and
dozens of other major organisations.
Entain plc | Annual Report 2022 2
Educate
stakeholders
We continue partnering with charities and other organisations
across different markets to prevent vulnerable audiences from
potential betting and gaming harm.
As part of our involvement with the UK Betting and Gaming
Council, we support the Young People’s Gambling Harm Prevention
Programme which is delivered by leading charities, GamCare and
Ygam. Since it was launched in 2020, the programme has delivered
training to over 24,000 professionals who have influence over
young people including over 10,000 teachers. These professionals
will use evidence-based resources to educate and safeguard an
estimated 2,000,000 children and young people. Entain’s support
has allowed Ygam to increase its growth, reach, and impact –
with two additional full-time outreach staff. Ygam’s latest Impact
Report revealed that 2022 was the charity’s biggest year to date
with millions of children and young people in England, Wales and
Northern Ireland now receiving their harm prevention education.
In the US, we support EPIC Risk Management to deliver a first-of-
its-kind education programme with the National Collegiate Athletic
Association (“NCAA”). As sports betting is licensed and launched in
an increasing number of states, this programme is front and centre
of conversations at a time when it is needed most. In 2022, EPIC
reached student-athletes across 61 colleges, targeting groups that
are more likely to experience problems with betting and gaming.
After the session, 92% of students were confident they would
seek support or encourage a fellow student to seek support if they
are worried about gambling. For more information about other
Entain charitable partnerships, you can refer to our 2022 Social
Impact Report.
48
Safer betting and gaming continued
2022 marked the fourth year of our research collaboration with
the Cambridge Health Alliance Division on Addiction (“CHADA”).
We have already contributed $4.4m to the programme which
shapes our safer gambling activities and contributes to the wider
industry’s knowledge on gambling-related harm.
Our collaboration funds the equivalent of eight full-time researchers
– six researchers at the doctoral level, a part-time researcher at the
master’s level, and two part-time researchers at the baccalaureate
level. Since 2019, the research teams have submitted 13 papers
with an additional six in active development for submission to
peer review. 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 CHADA fall under the four categories
below. This important research is published in peer-reviewed
and high-impact scientific research articles, with a worldwide
circulation. The journals include Psychology of Addictive Behaviors,
PLOS One, and International Gambling Studies.
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 underpin the
26 markers we currently use as part of the ARCTM programme.
Safer betting and gaming training projects
We disseminate learnings from our research collaboration to
our colleagues through various training activities. Since 2019,
CHADA conducted reviews of 15 existing Entain employee
training programmes, five teach-in seminars with select Entain
employees to present research findings, and the creation of
10 digestible research snapshots with graphical summaries of
published research.
Open science projects
Both CHADA and Entain are committed to the upholding the
highest standards and the principle of academic freedom.
In addition to engaging in open science practices for these
research projects, including research pre-registration and data
transparency, CHADA 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. These included for example a study on the state of the
literature about gambling and self-harm and understanding
gambling product safety features.
$4.4m contributed by Entain to date
13 submitted research papers
8 FTE researchers, health educators, and staff
15 of Entain’s safer gambling training programs reviewed
21 research presentations, teach-ins, panels, and posters
Strategic report Entain plc | Annual Report 2022 Overview
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49
4
Empower
customers
The ARCTM programme represents a step-change in the way
we empower our customers to be in control of their play.
Using behavioural indicators, data science, and analytics to assess
risk in betting and gaming, ARC™ works behind the scenes to
learn and identify risks in player behaviour so we can intervene
before a problem develops. ARCTM provides a digital safety net for
our customers with tools and interventions tailored to their style
of play.
For those customers who wish to take time out altogether, we also
continue promoting the use of the Gamban software, which allows
users to block betting and gaming websites and apps globally
from their devices. Since 2022, our UK frontline colleagues get
access to GamCare’s Helpline Transfer Service, enabling them
to transfer callers in need of support straight to the National
Gambling Helpline for specialist help. This service is only accessible
to gambling operators who can demonstrate their commitment
to safer gambling and high levels of staff training. We also take
part in all relevant industry-wide self-exclusion programmes in
the markets where we operate. In the US, BetMGM, is integrating
GameSense, an innovative responsible gaming programme into
its platform. In collaboration with four of our leading US peers,
we have also established the 12 Principles of Responsible Online
Gaming, to provide a benchmark for responsible operations.
3
Promote responsible
attitudes
Responsible 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. In the UK, we continue working
with the industry via the UK Betting and Gaming Council (“BGC”).
In early 2022, we released our Group Responsible Marketing Policy
which outlines our commitment to market Entain products and
services in a clear, transparent, and socially responsible manner.
Sponsored by the Chief Governance Officer, the policy applies to all
marketing activity undertaken by all brands within the Group and
applies to all marketing activities and channels. It is complemented
by internal guidelines for each market where we operate, including
examples of acceptable and unacceptable marketing behaviour.
Through our work with the BGC, we have developed the industry’s
codes of practice for advertising and marketing. This includes
dedicating 20% of our UK advertising space to responsible
gambling messaging and initiatives, ensuring that social media
ads are targeted at people over 25 years old, and only showing
YouTube ads to people that have been age-verified.
Entain plc | Annual Report 2022 50
Safer betting and gaming continued
5
Fund treatment for
those in need
Our commitment includes supporting people who find their
gambling starts affecting their lives. In the UK, we partner with
Cognacity, a team of world-leading experts in mental health care
and services, with specialist expertise in gambling-related harm.
Through our support, Cognacity’s mental health professionals
provide individuals at risk with a detailed assessment which
may lead to a fully funded residential treatment programme with
Cognacity@Leon House. Entain also provided funding to Gordon
Moody’s online Gambling Therapy helpline and Betblocker’s free
multiplatform betting and gaming blocking software, helping both
initiatives to expand their reach across European and wider global
communities. If you would like to learn more about our work with
those charities, you can refer to our 2022 Social Impact Report.
Entain plc | Annual Report 2022
6
Champion responsible
product design
With the ARCTM programme, we took responsible product design
to new heights. By using three times more risk markers than
ever before and developing real-time interventions tailored to
each player, we empower customers to use our products safely.
Working with the BGC and other industry groups, we will continue
sharing our learnings with peers to create a safer environment for
all customers.
Protecting our customers also means protecting their personal
data. We have embedded privacy-by-design protocols, ensuring
that we balance the need for data-driven insights to enhance
player protection, whilst also complying with data privacy laws.
Our data privacy teams are working closely with our customer
insights experts to understand our customers’ level of trust in
Entain processing their data. More on our work on data privacy is
included on page 56.
Strategic report Overview
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Financial statements
51
7
Change ourselves
for the bettor
Safer betting and gaming underpin everything we do, and it is
essential that all our colleagues receive training on those issues.
Our 2022 Group bonus was linked to achieving high levels of
completion for our safer betting and gaming training. At the end
of the year, 93% of colleagues were up to date on their mandatory
safer betting and gaming training. EPIC Risk Management, our
independent consultants on gambling harm minimisation, also
delivered tailored training to 915 colleagues interacting with
customers, empowering them to spot the signs of elevated-risk
behaviours and to provide effective and empathetic customer
interactions. EPIC also presented to the Entain Board on the lived
experience of problem gambling.
Safer betting and gaming performance
2022
2021
2020
Cash and in-kind contributions towards responsible betting
and gaming initiatives
£18.3m
£12.9m
£9.7m
Customer interactions regarding problem gambling1,2
1,807,892
2,268,550
1,390,906
ARCTM Interactions4
Customer complaints1,2
3,720,015
n/a
n/a
4,215
4,045
6,378
Customer complaints specifically related to a betting and gaming transaction1,2
629
655
919
Self-exclusions made1,2,3
Robberies
60,261
61,644
59,465
73
36
48
Incidents of anti-social behaviour
5,979
4,216
4,760
Incidents of assault
240
132
204
1. Data covers all UK licences.
2. 2020 data has been restated to remove discontinued licenses, to be comparable to 2021 and 2022 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. This information has been obtained
from Entain’s Regulatory Returns.
4. This figure includes all ARCTM real-time packages and risk-based interceptors, as well
as ARCTM emails. It is a count of the number of customer interactions, not at a distinct
customer level. This figure includes the 1,807,892 interactions reported under
‘Customer interactions regarding problem gambling’.
Entain plc | Annual Report 2022 52
Investing in people and communities
Investing in our people and communities is
one of the four pillars of our Sustainability
Charter. We recognise the importance of
recruiting, retaining, and nurturing top talents
from diverse backgrounds who are essential
to all aspects of our business, including the
operation of 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
organisations via the Entain Foundation.
Best place to work
Our goal is to attract, engage and retain the best talent globally,
bringing the best thinking to the business from inside and outside
of our sector. Talent management remains a principal risk for our
business, and we take a holistic approach to address it – creating
an inclusive environment that supports the wellbeing of our
colleagues whilst supporting them to grow and learn.
Everyone’s in the Game: Diversity and Inclusion at Entain
Diversity and inclusion are key to our sustainability and success.
Our ambition is to make sure Everyone’s in The Game, meaning
everyone at Entain feels valued, respected and included and can
perform at their best. Inclusion is embedded in everything we do,
because we know when we feel respected and heard, we do our
best work.
2022 was the first year of our new Diversity, Equity, and Inclusion
(“DEI”) strategy, underpinned by a key commitment to creating a
safe place to work. We proactively listened to our people to shape
our DEI plan, leveraging the nine employee forums across our
global operations and the results of our 2022 Your Voice employee
engagement survey. We also hosted numerous listening groups
with female colleagues across our locations to understand the
barriers they face in the workplace.
We boosted our efforts in educating colleagues on how to create
an inclusive culture. Building on the senior leadership training
delivered in 2021, we introduced our first Global Inclusion Learning
programme, accessible to everyone at Entain. The course is based
on real-life stories of our colleagues and covers topics such as
inclusive language, allyship, and micro-inequities. 9,020 colleagues
have already completed the training, including 97% of retail and
58% of office-based staff. On International Women’s Day, we
also welcomed neuroscientist, Samantha Hernandez, from Royse
Wellbeing to deliver sessions on Conscious Inclusion to 400
colleagues, now available as a self-paced module on our online
learning platform.
We continue working to diversify Entain’s talent pipelines.
Our Talent Acquisition team is trained on recruiting inclusively,
providing balanced shortlists for roles, and challenging our hiring
managers to think differently. We also partner with external
organisations that allow us to find diverse candidates and ensure
our Job Descriptions and Adverts have all bias removed. We have
also implemented projects to tackle local issues in different
markets. In India, the ReBoot programme supports women
returning to work after a career break. We have successfully
hired 33 colleagues from the programme in 2022 and we are now
expanding the programme to our Manila operations.
We understand the importance of employee networks in providing
a safe space for colleagues with a shared identity or experience.
This year, we created two groups to enable our female and
LGBTQIA+ colleagues to connect and inspire each other. Women@
Entain has over 1,000 members, including senior female sponsors
across our major locations who are helping to guide and shape the
network. Launched in Pride Month, Pride@Entain already counts
over 150 members and 360 allies globally. In 2023 we will continue
supporting employee networks to help us better engage and
advocate for other minority groups at Entain, including the launch
of our Black Professionals Network.
We are committed to driving the conversation around diversity
across the industry. In 2021, we launched EnTrain, a multi-
million-pound global programme to promote increased diversity
within technology. We have set an ambitious target for EnTrain to
positively impact the lives of 1,000,000 people by 2030, and we
have worked with organisations including Girls who Code and Tech
Girls to reach young women around the world. At the end of 2022,
we also announced a new partnership with McLaren Racing to
support women returning to the tech sector. At the start of 2023,
we launched a joint returnship programme, to help reignite the
careers of women returning to roles in STEM (Science, Technology,
Engineering and Mathematics).
Three of nine (33%) of Entain’s
Board are female including our
CEO who is one of only nine female
CEOs in the FTSE100.
Strategic report Entain plc | Annual Report 2022 Overview
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53
Senior Managers
All Employees
Diversity at Entain
2022
2021
2020
Group Board
33%
)
%
0
4
(
0
1
f
o
t
u
o
4
f
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t
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)
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9
47%
)
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o
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)
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f
o
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o
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9
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)
%
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)
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)
%
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)
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6
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f
o
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u
o
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2
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*
)
%
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)
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2
0
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0
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2
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0
2
1
2
0
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0
2
0
2
Male
Female
* The 2020 and 2021 figures have been restated to reflect a change
in our calculation methodology.
Many of our DEI metrics are showing positive improvements.
We are seeing an encouraging increase in the proportion of women
in technical roles and revenue-generating roles. In the UK, our
median hourly pay gap in the UK has reduced to 3.2% in 2022 from
5.3%. This compares favourably with the national figure from the
Office of National Statistics which quotes the gender pay gap this
year, for all employees (full and part-time), at 14.9%.
However, we have also seen a reduction in the proportion of
females in our global colleague base. We have identified key areas
of the business that are driving this change despite improvements
in the gender diversity of some teams, such as trading and
customer services. For example, there has been significant growth
in specific geographies where there remains an ongoing challenge
to recruit diverse talent. We are focused on addressing these
issues, and we are confident that the initiatives outlined in this
section will start driving positive trends in our key metrics and in
the wider industry.
Looking ahead, we want to better understand the demographics
of our people so we can drive targeted initiatives addressing the
needs of underrepresented groups. For now, we collect voluntary
information via our engagement survey. In 2023, we will launch our
group-wide campaign to encourage our colleagues to voluntarily
disclose on Entain’s internal system. This insight will help shape
future activities and drive diversity across our business.
Employees worldwide
28,940 25,554 23,573
Female employees
13,479 11,583 11,336
% female employees
47%
45%
48%
Part-time employees1
9,754
4,328
2,525
% part-time employees
34%
17%
11%
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
3%
5%
7%
17%
16%
15%
Median bonus pay difference
between male and female colleagues2
39%
60%
13%
Mean bonus pay difference
between male and female colleagues2
66%
63%
19%
Females in all management positions
(as % of total management workforce)7
37%
38% 37.4%
Females in junior management
positions (as a % of total junior
management workforce)7
40%
40%
N/A
Females in technical roles3,7
31%
30%
27%
Female managers in revenue-
generating functions4,7
42%
38%
42%
UK-based employees who have
confirmed being part of an ethnic
minority background, as a percentage
of UK employees that have reported
their ethnicity5,7
UK-based employees who have
confirmed as being part from an ethnic
minority background5,7
Employee age groups:6,7
<30
30-50
50+
Employee contract types:7
Permanent
Fixed-termed
Contractors
14%
18%
19%
7%
10%
9%
38%
38% 37.5%
45%
48% 47.5%
14%
14% 15.0%
99%
98%
0.1% 1.21%
N/A
1.5% 1.78%
1. Data for 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 based on a snapshot date of 5 April for the
year stated, as per the requirements of the UK’s Gender Pay Gap Reporting
3. Technical colleagues are those employees that roll up to our Chief Technology Officer
based on our Business Process Flow Manager
4. Revenue-generating functions include our digital and retail/stadia functions.
5. This data was based on a sample of 53% of UK-based Entain employees in 2022
that have provided us with their ethnicity information. To prevent us from over- or
understating the ethnic diversity of our employees, we report this data in two ways.
We report on both the percentage of the sample that identifies as being from ethnic
minority backgrounds, as well as the number of those confirmed to be identifying as
from an ethnic minority background as a proportion of all UK employees.
6. Data covers 97% of employees.
7. Data does not include employees in the acquired SuperSport business.
Entain plc | Annual Report 2022
54
Investing in people and communities continued
Well-Me: Wellbeing at Entain
The delivery of our Well-Me strategy went from strength to
strength in 2022, as we further embedded wellbeing in every
aspect of the employee lifecycle, from recruitment and onboarding
to rewards and development.
We took an important step by launching Entain’s first-ever global
wellbeing survey. In partnership with wellbeing specialists at
Robertson Cooper, we conducted a comprehensive health and
wellbeing assessment including leader interviews, focus groups,
and a global survey completed by 9,600 colleagues. The insights
we gained are now guiding us to offer tailored and targeted
wellbeing solutions across our different markets.
Our Global Wellbeing Network expanded across our offices to 16
wellbeing leads, who are helping us to shape our wellbeing agenda
and adapt it to local contexts. Together we ran 11 global wellbeing
campaigns achieving 400,000 views and interactions, a 300%
increase on that achieved in 2021. On World Mental Health Day,
we hosted our first global hybrid event in partnership with Dr Nick
Taylor and Leon Taylor – an opportunity for 1,200 colleagues, in
person and online, to reflect on their mental health. Throughout the
year, we engaged our colleagues on various wellbeing issues
including healthy eating, avoiding burnout, financial wellbeing
and resilience.
Our Employee Assistance Programme (“EAP”) remains a major
source of support for our colleagues, with 10% of colleagues
utilising it in 2022 (a 2% increase from 2021 and a high take-up
rate when compared to similar-sized companies). We provide 24/7
access to our employee assistance programme and the Unmind
platform to all employees globally. Last year we continued the
roll-out of our Mental Health First Aid (“MHFA”) programme,
with special attention this year to our ‘frontline’ people who are
providing support to colleagues and customers who are potentially
at greater risk of experiencing mental health issues. Through our
new Support the Support programme, we provided MHFA and
Suicide Prevention training to all frontline colleagues across Retail,
Human Resources, Safety Management, Employee Relations,
Customer Care. We also launched The Workplace of Tomorrow,
a targeted training for people managers in our retail shops and
stadia, upskilling them to support their teams and create a positive
work culture. We will continue delivering the programme in 2023 to
reach 1,800 managers.
We achieved important milestones in 2022 in the delivery of
our Future of the Office programme – a strategic review of our
working practices, responding to the new needs of our colleagues
following the COVID-19 pandemic. Throughout the year, we
redesigned our offices in London, Lisbon, Manila, and Sofia to suit
the new hybrid ways of work and offer more collaborative spaces.
Our office in One Stratford Place in London achieved the silver
Fitwel certification which recognises buildings optimised to improve
health and productivity. In 2023, we will continue expanding the
programme across our global operations.
Warming up for Winter
The end of 2022 was a challenging time for many families who
struggled to pay their bills amidst surging inflation. To ease the
pressure that rising costs of living are placing on our people
we launched a campaign called “Warming up for Winter”
which supported 13,500 colleagues working in lower-paid
roles in our UK shops and stadia. The programme includes a
mix of financial help, educational campaigns, and emotional
support. Each colleague received £300 of shopping vouchers
at the end of the 2022. We also offered in-store promotions
with daily Christmas giveaways to hundreds of colleagues and
organised a gift bank with an unwanted presents giveaway
scheme. We ran awareness campaigns, providing practical
money-saving tips through podcasts and home-delivered
handbooks, and a cooking channel created by our colleagues.
We offered financial and wellbeing training to help people
budget and protect their mental health during difficult times.
From 1 January 2023, we increased the minimum hourly rate of
pay to £10.90 (up from £10.00).
Committed to Colleague development
In 2022, we invested £2.2 million to support the personal and
professional development of our colleagues1. We boosted the offer
available on Learning Room, our learning platform accessible to all
colleagues globally. We increased access and licenses to best-in-
class learning resources, such as LinkedIn Learning, Get Abstract,
and Pluralsight.
We delivered important milestones in harmonising the way people
learn and grow at Entain. We continue encouraging the adoption of
Entain & Perform, a platform enabling colleagues to capture their
goals, learnings, career conversations, and reviews. We worked
across our global operations to standardise our onboarding process
and ensure all new hires are set up for success. We also launched
our first-ever company-wide Talent Review Process, to help us
identify and retain our top talent and, when necessary, build
external pipelines for critical roles. We launched a job architecture
framework which will provide our colleagues with a clear pathway
to progress their careers, both vertically and laterally.
We remain committed to apprenticeships as one of the most
effective tools for social mobility. In the UK, we used 14% of our
2022 apprenticeship levy and supported 58 apprentices, including
20 level-2 apprentices and 27 level-3 apprentices.
1. In 2021, we more than doubled our Learning & Development investment to support
colleagues throughout the pandemic, with special attention to retail employees
placed on furlough. In 2022, we maintained our investment above pre-pandemic
levels whilst shaping our new strategy.
Strategic report Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
55
n/a
n/a
n/a
n/a
26%
17%
34
137
4
31
0
3.5%
26%
Best place to work performance
indicators4
Customer Satisfaction
2022
60%
2021
60%
2020
60%
Central L&D investment
£2.2m £2.6m £1.2m
Average hours per employee
of training and development
8.1
hours
10.5
hours
Average amount spent per employee
on training and development
Average hours per manager of
training and development
£81
£116
22.2
hours
38.5
hours
Average amount spent per manager
on training and development
£110
£577
Employee turnover – all
Employee turnover – voluntary
Whistleblowing incidents
reported and investigated
Employee accidents
Employee reportable incidents
Public accidents
Public reportable incidents
Absenteeism rate1
% of internal hires3,4
Employee engagement score
(% of employees recommending
Entain as a place to work)2
36%
27%
51
112
7
11
1
5%
19%
32%
25%
29
117
5
9
1
4%
35%
74
78
n/a
1. Data covers UK retail colleagues only
2. We measure employee engagement based on the results of the annual Your Voice
survey. Entain could not run the Survey in 2020 due to the COVID-19 pandemic and
our employee communication being focused on wellbeing. Our 2022 score is based on
the results of our latest Survey run in April 2022, and the 2021 score on the results of
the Survey run in February 2021.
3. The 2020 figure has been restated to reflect a change in our calculation methodology.
4. Data does not include employees in the acquired SuperSport business.
Employee Remuneration & Reward
As well as supporting the development of our people, we are
committed to providing a competitive rewards package for each
employee across all levels. We also want to share the success
of the business with our colleagues. In 2022, we expanded our
all-employee ShareSave plan from 14 countries to 23 countries,
covering over 90% of employees globally. We also awarded free
shares worth £300 to all colleagues. In addition, approximately
13,000 colleagues globally are included in our performance-based
bonus plans. We also understand that reward goes beyond just
salary. In our top-six countries by colleague numbers (covering
nearly 90% of employees globally), we offer at least one of the
following non-salary benefits to all colleagues: Employer pension
contributions, life cover, medical insurance, and income protection
insurance. In other countries where we operate, we offer other
non-salary benefits to match the expectations of the local
employment market.
The Big Six Compliance Programme
As a FTSE100 company, we have a duty to do the right
thing. This also means training our people to always make
the right decision for our customers and our communities.
Every colleague, no matter their role, level, or location,
must complete six learning modules covering ethical
topics such as safer gambling, data privacy, or bribery and
corruption prevention.
With the Big Six programme, we wanted to drive completion
rates for our mandatory training across Entain. We linked
our 2022 Group Bonus to achieving 85% of completion for
each module – an ambitious but achievable target given the
turnover in certain parts of our business. Our Compliance Team
also refreshed the training based on the feedback from our
colleagues. Working hard with other departments, they made
the modules insightful, easy to follow, and clear to understand.
The first year of the programme was a success, as we increased
our average completion rate to 93% – up from 82% in 2021.
Big Six Learning Modules
Completion Rate
Governance, Risk and Compliance
Code of Conduct (including Safer Gambling)
Data Protection (Office)
Data Protection (Retail and Stadia)
Prevention of Bribery, Corruption
and Tax Evasion
Modern Slavery
93%
92%
91%
95%
93%
93%
Sustainable Supply Chain
We are committed to acting morally, honestly, openly and with
integrity in everything we do. We firmly believe that a robust
approach to protecting human rights and preventing Modern
Slavery is one way we can evidence this.
We have identified that the two main potential risk areas for our
business are the recruitment and onboarding of staff and our
broader supply chain. In 2022, we continued our collaboration with
Unseen, a UK-based charity fighting modern slavery, to strengthen
our procurement processes and policies. Unseen also helped us
complete a risk assessment of our suppliers, mapping areas where
modern slavery could be more prevalent based on factors such as
purchasing category or political instability. We used the results of
this exercise to identify high-risk suppliers and send them a new
supplier questionnaire prepared by Unseen. In 2023, we will require
external audits for suppliers scoring as high risk based on their
questionnaire responses3. Our ambition is to repeat this exercise
every two years. We will also release in 2023 a Group Modern
Slavery Strategy, which will outline our plans to better understand
and tackle the risks in our recruitment processes.
Entain plc | Annual Report 2022 56
Investing in people and communities continued
In addition to protecting human rights, we are also working with
our suppliers to understand and reduce emissions throughout our
value chain. In 2021, we conducted a screening assessment of our
scope 3 emissions with the Carbon Trust. In 2022, we surveyed
and actively engaged with 19 suppliers that represent 33% of
those emissions. We completed site visits with strategic suppliers
to better understand how they can support our Net Zero by
2035 agenda.
We launched a new Mergers & Acquisitions (“M&A”) Security Policy
to support the safe integration of acquired companies and joint
ventures. We reinforced cybersecurity and privacy verifications
as part of the M&A due diligence. We also accelerated the
incorporation process, as all businesses joining the Group must
align with our requirements within six months. In 2022, our privacy
and cybersecurity experts supported the technological integration
of 12 new subsidiaries, including Finnplay and unikrn.
Our privacy and cybersecurity teams are also involved in third-
party due diligence. Entain is relying on a growing number
of suppliers to deliver its online products, and it has become
increasingly important to ensure these third parties meet our
data privacy and security standards. Before we start working
with a new tech partner, we evaluate the risks and controls in
place – either by reviewing existing certification and external audit
information or by conducting our own assessment. We then include
our data privacy and security recommendations in contractual
agreements which are only executed once the third party has
agreed to meet our requirements.
Our economic contributions
The Group employs a significant number of people across c.4,270
retail outlets and offices in more than 20 territories. As such, our
economic footprint is significant. In 2022, we paid £1.2bn in taxes
and levies across our countries of operation. This comes in addition
to the £654.5m we paid in employee wages and salaries and the
£2.7 billion we paid to our 9,600 suppliers and third-party partners.
Economic contributions
2022
2021
2020
Net gaming revenue
(NGR)
£4,348.9m £3,886.3m £3,628.5m
Underlying EBITDA
£993.2m
£881.7m
£843.1m
Total tax paid
£1,272m
£1,055m
£962m
£654.5m
£579.3m
£524.0m
Employee wages
and salaries
Payments to providers
of capital (interest &
dividends)
Supplier Spend
£2.7bn
£2.1bn
£126.2m
£63.9m
£62.8m
£1.3bn
In 2023, we will take an important step by partnering with
EcoVadis, the world’s largest platform for supplier sustainability
ratings. Our EcoVadis membership will help us evaluate our key
suppliers and their training needs across four topics – environment,
labour and human rights, ethics, and sustainable procurement.
The platform will also help us refine our Net Zero roadmap by
giving us access to primary emission data from our suppliers.
In 2023 our procurement and diversity teams will also collaborate
to develop a Supply Chain Diversity Roadmap. Our ambition is to
increase the number of Entain’s suppliers that are owned by people
from historically underrepresented groups. In 2022, the Group
spent £2.7bn across more than 8,250 suppliers. By changing our
purchasing practices, we believe we can make a difference in the
communities where we operate whilst increasing our supply chain
resilience and agility.
Data Privacy & Cybersecurity
Safeguarding our corporate and customer information remains a
top priority for Entain. Our commitment is reflected in the growing
headcount of our Data Privacy and Cybersecurity teams, which
respectively employ 21 and 39.5 full-time equivalents. We have
implemented strong governance procedures, with our Chief Privacy
Officer (who also holds the position of Group Data Protection
Officer) and our Chief Security Officer providing regular updates to
the Board and Executive Committee.
2022 was an important year in taking our privacy strategy
to higher stages of maturity. We rolled out a new assurance
programme, with dedicated staff members and tools to control
and monitor the effectiveness of our data privacy activities, keep
risks under review, and update policies and procedures in line with
new legislation. As part of the programme, we carried out 20 Data
Protection Impact Assessments (DPIAs) in 20224.
We completed the annual review of our Group-wide Data
Protection and Data Retention policies, which apply to everyone
working for Entain, including agency staff and contractors. As part
of the Big Six Programme, 95% of our colleagues completed the
annual mandatory Data Privacy training.
We made progress on the implementation of our Artificial
Intelligence (AI) and Data Ethics Charter, which defines our
principles on the responsible use of data-driven technologies.
Whilst we use AI and deep machine learning to create a safer
environment for our players, we also have a duty to meet their
privacy expectations and we’re working hard to strike that balance.
Data privacy is built into the development of our safer betting
and gaming initiatives, including in our new ARC™ programme.
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.
3. For this risk assessment, we include all suppliers with which we spend over £50,000
per year.
4. DPIAs are comprehensive privacy risk assessments, a requirement under the General
Data Protection Regulation (GDPR). We undertake DPIA for projects or processes
involving personal data and meeting a certain risk threshold. For each assessment,
our Data Protection Officers will make a recommendation to the business, which may
include suggestions and actions to mitigate any high risks. The DPIA will then be
logged and given a risk rating of ‘High,’ ‘Medium’ or ‘Low’, which will determine how
frequently the processing will be reviewed by our data privacy team.
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57
The Entain Foundation
About 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 our main global Foundation, we
also operate the Entain Foundation US, a dedicated US-based not-
for-profit. In November 2020, the Entain Foundation committed to
investing £100m in 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 the communities in
which we operate. In the next pages, we give a short overview
of the Foundation’s activities. If you would like to learn more, we
invite you to review our 2022 Social Impact Report, available from
entaingroup.com.
How our social impact focus supports the Entain Sustainability Charter
Regulation
Responsibility
Corporate
Governance
People &
Communities
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Only operate in
domestically regulated
and regulating markets.
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.
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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 Bettor 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 2022
58
Investing in people and communities continued
Focus on safer betting and gaming
The Foundation’s top priority is to promote safer betting and
gaming and to support the delivery of the Group’s Changing for the
Bettor strategy. We work with partner organisations across three
key focus areas.
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
As part of our operations in the UK, in 2022, we contributed
0.75% of our Gross Gaming Yield (“GGY”) to support Research,
Education and Treatment (“RET”) of problem gambling – up from
0.5% in 2021. In 2023, we will increase this proportion to 1%, a
significantly higher figure than the minimum voluntary requirement
of 0.1%. 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 and providing funding to other charitable
service providers in the sector.
In addition to these contributions, we work with a range of
organisations that are leading ground-breaking 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. By the end of 2026, we will have invested over
£100m in our partner organisations and charities through the
Entain Foundation.
Promoting grassroots sport
As a business, Entain is passionate about sports and understands
the role it plays in society. That is why we are proud we can make
an impactful contribution by investing at the grassroots level.
The Foundation currently supports two key flagship projects in the
UK as well as initiatives in Greece and Colombia.
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. Entain has helped over
200 athletes since the partnership began in 2019 by providing
them with a financial award to help with training, equipment,
and competition costs, as well as personal development training.
We have 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.
Pitching In
Pitching In is an Entain initiative to support and develop grassroots
sports in the UK, helping non-league clubs improve their facilities
and providing a platform for aspiring athletes to chase their
dreams. The multi-million pound, multi-year investment programme
is working with Isthmian, Northern Premier and Southern
League clubs (known as the Trident Leagues) to champion their
achievements and tell their stories. The Pitching In partnership
has been designed from the ground up to deepen links between
clubs and their local communities. In May 2022, Entain unveiled the
Pitching In Volunteer Hub, a new online portal that has become a
one-stop-shop for every Trident League club to connect football
fans with potential volunteers.
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Promoting diversity in technology
Supporting communities
In 2021, we launched EnTrain, a global programme to promote
increased access to, and diversity within, technology through
training and education. We have set an 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.
The EnTrain programme is comprised of four core initiatives:
Entain Academy: Supplying transformative tech training for the
Entain is a global business and as such, we seek to support local
communities in the markets where we operate. The Foundation
supports a variety of small to mid-sized charities in countries where
we can make a positive social or environmental impact. Our partners
include Chance for Childhood (various African countries), Sport
Senze Frontiere (Italy), Tiempo de Juego (Columbia), and Fejar
(Spain). If you would like to learn more about the difference we make
with our partners, we invite you to review our 2022 Social
Impact Report available at entaingroup.com.
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.
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.
Since the programme launched 50 Entain employees have engaged
in our three apprenticeship talent pathways, and we’ve supported
more than 3,000 girls in coding clubs through our charity partner
Girls Who Code.
McLaren Returnship Partnership
We believe companies like ours have an opportunity to reshape
the world of work when it comes to female representation. In 2022,
we partnered with McLaren Racing to launch a brand-new
Returnship programme. Through the initiative we will provide a
unique opportunity for skilled, senior women to return to roles in
engineering and technology, where they will work on key projects
in both organisations and to participate in bespoke coaching and
networking programmes.
Entain plc | Annual Report 2022 60
Ukraine
Following the Russian invasion of Ukraine in February 2022,
Entain responded to the Ukrainian Ministry of Health’s appeal for
support with an immediate donation via its Foundation to Crown
Agents, the not-for-profit international development company.
The donation was used to supply a variety of life-saving medical
equipment. Our Baltics-based business, Enlabs, also made
donations directly to the relief efforts and throughout our business,
many of our colleagues organised collections to provide both
financial donations and supplies for the relief efforts. We also
recognised the need to support the many Ukrainian national
colleagues within our Group, as well of those with friends and
relatives affected by war, encouraging all to take advantage of our
24/7 Employee Assistance Programme.
Reduce environmental impact
2022 was an important year for Entain as we set in motion our
Net Zero by 2035 plan. After achieving our greenhouse gas
(GHG) emissions reduction target in 2021, we are now focused
on achieving our new ‘near term’ science-based targets. We have
committed to a reduction of 29.4%1 in our scope 1, 2 and 3
emissions by 2027. This has been submitted to the Science-based
Targets initiative to ensure our journey to decarbonisation is in
line with limiting global warming to 1.5 degrees, as per the Paris
Agreement. This is the next step on our journey to net zero, and we
will outline our Net Zero pathway in our upcoming ESG Report.
Our Net Zero Action Group plays a central role in accelerating
our decarbonisation strategy. The Action Group convenes senior
colleagues across departments to identify practical measures
which can be implemented throughout our global operations.
This year, the Committee oversaw a series of workshops held with
senior leaders across the business to identify climate-related risks
as well as opportunities for Entain to support the transition to a
lower-carbon economy. The outcomes are now helping us to shape
our Net Zero action plan.
Our operational footprint
In the UK almost of all our electricity supply contracts for our
offices, shops and greyhound stadia are for 100% renewable
energy. This amounts to nearly 70% of the Group’s total electricity
consumption being actively sourced from renewables, and a
reduction of over 3,800 tons of our market-based emissions
compared to 2021. We took another important step in 2022
by securing a Corporate Power Purchase Agreement with SSE
until 2027, covering our retail shops and four stadia in the UK.
This agreement cements our commitment to renewable energy,
giving us access to reliable, certified green energy sourced from
the Keadby wind farm for the next five years. In 2023, we will
continue engaging with office landlords in our different markets
to increase the percentage of renewable energy across Entain’s
global operations.
In 2022, we changed our procurement processes to promote
electric vehicles. Unless made impossible by local factors, all new
vehicles are purchased by default in an electric model with Entain
funding the installation of charging points. We also extended the
scope of our ISO140001:2015 Environmental Management System
and ISO 45001:2018 Occupational health and safety management
systems accreditations, now covering our UK offices, stadia, and
c.650 shops. We will expand this coverage to all our UK operations
by mid-2023 and our global operations in the next few years.
We continue engaging colleagues in our decarbonisation strategy,
bringing them along in this journey. Our Green Ambassadors
Network has grown globally to 800 members who help us
find practical ways to improve environmental efficiency in the
workplace. With their support and guidance, we conducted two
environmental awareness campaigns this year. In the summer, as
more colleagues started returning to the workplace, we delivered a
month of activities to encourage recycling in the office and at home.
As part of the Warming Up for Winter campaign (see page 54), we
also organised an Energy Awareness & Action week to inform our
colleagues of the practical ways they can decrease energy bills in
their homes.
Our value chain emissions
Entain’s scope 3 emissions make up 96% of our total value chain
emissions. This figure is typical for global companies with a large
supplier base, and it means we need to bolster our efforts in
engaging our business partners. To do this, we have been aligning
our approach to the Carbon Trust Supply Chain Standard, where
we currently have Level 1 certification.
Working with the Carbon Trust in 2021, we found that 44% of our
emissions are associated with 15 major suppliers. We are now
engaging with them to explore how we can reduce emissions
together. In 2022, we surveyed 19 key suppliers and completed
site visits to better understand their environmental management
maturity and tailor future upskilling activities.
In 2023, we engaged EcoVadis, an established platform for supplier
sustainability ratings. Our membership will help us engage with our
wider supplier base and, by giving us access to primary data from
suppliers, refine our Net Zero roadmap.
1. This target has been restated from our 2021 ESG Report as part of our submission to
the Science-Based Targets Initiative (SBTi).
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Our pathway to Net Zero
Our top priority is to achieve deep reductions in our value chain emissions, including our own operations. However, we understand that
there are likely to be residual emissions that are unable to be abated from our value chain. For these emissions, we will invest in high-
quality carbon removals that sequester carbon from the atmosphere. We have already begun ramping up our investment in climate
mitigation beyond our value chain through our partnership with Brynk. Brynk is an independent platform supporting tree planting and
reforestation projects globally on our behalf. We have already 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 practices.
Environmental KPIs, including Streamlined Energy and Carbon Reporting (SECR) data
Total energy consumption (kWh)2,7
UK
Rest of the world (ROW)
Absolute direct emissions (scope 1) – (tCO2e)
Absolute indirect emissions (scope 2, location-based) – (tCO2e)
% of purchased electricity from renewable sources3
Absolute GHG emissions4 – direct and indirect: location based (tCO2e)
UK
Rest of the world (ROW)
Absolute GHG emissions intensity per employee(tCO2e/headcount)
Total GHG emissions – direct and indirect: market based (tCO2e)
UK
Rest of the world (ROW)
Water withdrawal5 (cubic metres)
Waste generated6 (tonnes)
2022
121,938,586
84,251,062
37,687,524
2,018
27,440
67%
29,458
15,344
14,114
1.02
14,266
1,955
12,311
117,807
4,624
20211
110,509,736
85,336,239
25,173,497
2,559
24,767
67%
27,326
18,286
9,040
1.09
15,235
3,331
10,304
100,401
3,858
2020
111,755,270
92,776,583
18,978,687
822
28,136
59.4%
28,958
21,497
7,461
1.21
15,065
7,640
7,425
252,345
7,527
1. Data from previous years has been restated based on minor adjustments that arose as part of Entain’s GHG data independent validation by the Carbon Trust.
2. Coverage of energy consumption and emissions data is 100% for the UK, and 88% globally, by employee headcount. Global and ROW energy and emissions data are scaled
up based on this coverage to estimate totals across global operations. This data includes energy consumption related to both scope 1 (company vehicles, gas, and fuel) and
scope 2 emissions (purchased electricity). Global coverage reduced this year due to limited availability of data following acquisitions in the period.
3. Energy from renewable sources only includes electricity purchased that was actively sourced from renewables. All remaining electricity used by Entain is sourced from the
local grids where we operate.
4. Emissions are calculated using the GHG Protocol Corporate Accounting and Reporting Standard. Consumption data has been converted to GHG emissions using 2022 BEIS
emissions factors and 2022 IEA emissions factors for non-UK grid electricity. Emissions reported above are calculated using the location-based method, using an operational
control boundary.
5. All water withdrawn is sourced from municipal water supplies. Water data includes our operations in the following countries: Austria, Belgium, Bulgaria, Gibraltar, India,
Israel, the Philippines, the UK and Uruguay. In 2022, we also included data for our operations in Malta. This makes up 83% of Entain’s global headcount. Note that this data is
not scaled up to estimate the total global consumption but is reported consistently for the operations where data is available.
6. Waste data is sourced from our operations in the UK. This makes up 52% of our overall headcount. These figures are not prorated to 100% coverage.
7. Due to the Group acquiring four new entities in 2022, overall energy consumption and location-based emissions increased in 2022. As integration and data collection
from these entities is ongoing we have revised our 2022 figures upwards based on headcount. We have not yet rebaselined data from previous years based on these new
acquisitions whilst we await data from these operations.
Entain plc | Annual Report 2022 62
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.
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. In this way the
Directors met the requirements of Section 172
of the Companies Act 2006 which 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.
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
Board members took part in a number of virtual and face-to-face employee events
in 2022 in order to gather feedback from colleagues around the Group. A key
channel for this are our Employee Forums, which have been established in our
major employment locations.
These Forums form a key part of our
employee listening and engagement
strategy, enabling our people to discuss
and agree how their teams connect with
the company purpose, strategy and
values, as well as discussing topics that
impact them and their colleagues.
Virginia McDowell, Chair of the ESG
Committee, is our appointed Designated
Workforce Director, a position she
has held since 2019. Virginia is a
regular attendee at 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. Mark Gregory
(independent Non-Executive Director and
Chair of the Remuneration Committee
at the time) and Stella David (Senior
Independent Director) attended the AGM
and Annual Conference respectively.
We believe that by encouraging and
supporting a diverse workforce where
individuals can thrive and success no
matter their background, is the best
way maximise our talent pool and better
represent our global customer-base.
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 53 to 57
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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.
Our industry-leading ARCTM safer betting and gaming programme was developed in
recognition of the importance of tailoring our approach to the individual customer and
providing them with the protection and assurance which they should expect from us.
We also have 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 43 to 52
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 2022, the Group conducted a
total of 870 investor interactions, as well as presenting at 23 conferences and
‘fireside chats’, engaging with 360 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.
In addition to these meetings and
conferences, the Group also held two
shareholder events throughout the year.
The first, held in May 2022 provided a
detailed update on the Group’s BetMGM
joint venture, while in October, the
Group held its second Entain:Sustain
sustainability showcase, with a
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 addition to providing the Board
with updates on shareholder discussion
topics as part of its regular Board reports,
over 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.
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.
Read more: pages 8 to 11
Entain plc | Annual Report 2022
64
Engaging with stakeholders continued
Suppliers
The Group works responsibly with its suppliers and regularly reviews its customer
and creditor payment policies. In 2022, 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 55
The Community
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. The Group continues
to progress its EnTrain initiative, with
the target of positively impacting one
million lives through a range of diversity
in technology projects by the end of
the decade. The Company provides a
comprehensive update to stakeholders
through the publication of its annual
ESG report.
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 60
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Regulators
As a global operator and one of the world’s largest online betting, gaming
and sports entertainment 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 36 to 37
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
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
The Netherlands, Brazil).
Entain plc | Annual Report 2022 66
Task Force for Climate-related Financial
Disclosures (“TCFD”) Statement
Entain is a staunch supporter of the recommendations of the Task Force for Climate-
related Financial Disclosures (“TCFD”), and we are committed to implementing the TCFD
recommendations having made voluntary disclosures ahead of the FCA’s mandatory
requirements for UK Premium Listed Companies to report. In this section, we outline our
approach to climate-related threats and opportunities.
Over the past year we have made significant progress in our
internal processes with the TCFD recommendations In line
with the ‘comply or explain’ obligation under the UK’s Financial
Conduct Authority Listing Rules. The Group can confirm it is fully
compliant with nine of the eleven TCFD recommendations, and
partially compliant with the remaining two. Where we are partially
compliant, we continue to develop and mature our processes as
outlined below:
Our priority for 2022 was to engage leaders of our business units
to identify the relevant climate-related threats and opportunities
to Entain. Over the next year, we will further quantify and
subsequently assess the materiality of these climate-related
threats and opportunities to provide a more details about the
resilience of our strategy. While we discuss this in general terms
within this statement, this materiality will help us fully comply with
disclosure C of the Strategy pillar. For those issues that we deem to
be material to Entain, we will consider specific metrics and targets
to monitor our climate-related threats and opportunities (Metrics
and targets – disclosure A). These updates will be included in the
2023 Annual Report.
This statement is in line with the four pillars of the
recommendations: Governance, Strategy, Risk Management
and Metrics and Targets, and was developed by following the
guidance set out in Section C of the TCFD Annex 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.
Furthermore, we intend to further expand our description of climate
change in our financial planning.
Governance
The Entain Board is ultimately responsible
for climate-related threats and
opportunities, with overall ownership
of this agenda sitting with our CEO.
Responsibility for identifying and
managing threats 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 interrelated nature of climate-
related threats and opportunities and our
commitment to climate action.
In 2022, the Board ESG Committee were
briefed on climate-related threats and
opportunities at two of their meetings,
including reviewing the initial findings of
our climate risk workshops. Wider climate-
related issues such as our net-zero target
are raised at least quarterly with the ESG
Committee. This includes updates from
our operational Net Zero working Group,
which has established to delivery strategy
for Net Zero , which is led by our Chief
Risk Officer. In addition, the Board ESG
Committee have:
¥ Reviewed and approved our Net Zero
target ahead of submission to the
Science-based Targets initiative (target
validation process expected in Q2 2023)
¥ Received face-to-face training on
climate change reporting and TCFD
requirements our from external
legal advisors.
¥ Reviewed and approved the renewal
of our green electricity tariff for the UK
Retail estate and our Power Purchase
Agreement (PPA)
¥ Requested a detailed Net Zero
strategy to be developed by the ESG
Steering Committee
In addition, the Board approved a new
ESG Group risk related to the reputational
risk of failing to meet our Net Zero
commitment. Ownership of this risk has
been delegated to the ESG Committee.
These Committees are supported by the
ESG Steering Group (see page 113]) which
is chaired by our Chief Governance Officer,
and reports to the Board ESG Committee.
The ESG Steering Group is responsible
for managing and identifying climate-
related threats and opportunities, as well
as overseeing our approach to climate
change as part of our wider sustainability
strategy. The ESG Committee approves
the environmental strategy for the year,
is provided with quarterly updates,
and conducts an annual review of
environmental performance. The Group
Risk Committee, which reports to the
Board, has operational responsibility for
managing risk within the Group, including
climate-related risks deemed to have
a material financial impact. The Board
ultimately approves the Principal Risks
and how they are allocated for monitoring.
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
67
Strategy
Addressing climate change is a key part
of our strategy, and our Net Zero by 2035
commitment and approach is an important
aspect of our ‘best place to work and
investing in people and communities’ pillar
of our strategic framework. Delivering on
this requires alignment with financial
planning. In the short-to medium-term,
financial planning decisions have already
been made with the climate in mind.
For example:
¥ Continuing to invest in our green
electricity tariff for the UK Retail estate,
despite increasing energy costs.
¥ Investing in a renewable Power
Purchasing Agreement (PPA) to secure
renewable energy at a fixed price to
gain energy price certainty.
Over the next year, we will look to further
embed climate considerations into our
financial planning process as we further
enhance our assessment and response
to climate-related issues. Will report our
progress in our 2023 Annual Report.
Currently, the impact of climate-related
issues has not significantly impacted
Entain’s financial performance or
financial position.
We understand that climate-related
threats and opportunities can have longer
term time horizons that span beyond
typical enterprise risk management
and business planning processes.
We considered climate-related risks based
on the following time horizons:
¥ Short (0-3 years)
The risks outlined below were developed
through our climate-related threats and
opportunities workshops held throughout
2022, which is described further below.
The analysis conducted in 2022 raised
risks that have not yet been deemed to
be Principal Risks in and of themselves,
but climate change may become a factor
in affecting the impact of our current
Principal Risks, and the subsequent
actions required to manage those
risks, both threats and opportunities.
Therefore, the climate-related threats and
opportunities identified are emerging and/
or operational risks that will continue to
be monitored and evaluated. However,
we describe the climate-related threats
and opportunities identified based on our
scenario analysis below.
¥ Increasing our price banding for our
¥ Medium (3-5 years)
company car selection, giving a wider
choice for relevant colleagues opting for
hybrid and electric vehicles.
¥ Long (5+ years)
Link to principal risks: Failure to
maintain our technology platform
excellence, loss of key locations,
Health, safety, security and well-
being of colleagues, customers and
communities colleagues
Link to strategic pillars: Invest in our
people and communities
Time horizon: Medium to long term
Responding to physical risks related to climate change
Acute risks
Disruption of live events on trading
markets due to increased severity of
extreme weather events. We see the
risk of this in climate scenarios where
extreme weather events continue to affect
society, sporting events and other events
that are critical to our markets. This may
manifest itself in last-minute cancellations
or postponement of live events, which
has the potential to negatively impact
revenues. The diversification of our
markets helps to mitigate this risk.
Link to principal risks: Trading, liability,
and pricing management
Link to strategic pillars: Expand into
new regulated markets, Grow presence in
existing markets
Time horizon: Short term (but increasing
in severity in the medium to long term)
Impact of extreme weather events
on key locations and suppliers.
Entain operates globally, so climate-
related risks will vary across our markets
and global operations. We have identified
key locations where the impacts of climate
change may be more severe or impact our
business more significantly. This impact
could have a potential financial impact
in terms of reduced platform availability
and/or quality of service, or influence
capital expenditure decisions when
considering expansion, consolidation
and relocations of our key operational
locations. Our response to this threat is
to incorporate physical climate-related
risks into our management of our current
Principal Risk – Loss Of Key Locations, as
well as feed into our long-term approach
to our investment in digital infrastructure,
such as data centres and networking.
We have identified our key locations
to the business, and an assessment of
existing mitigation measures and gaps at
these locations is in progress and will be
reported to the Board in June 2023.
Entain plc | Annual Report 2022 68
Task Force for Climate-related Financial Disclosures
(“TCFD”) Statement continued
Chronic risks
Increased costs due to increasing
temperatures. In scenarios where global
warming is most prevalent (an increase
of 2 degrees or 3+ degrees), we may
see an increase in costs for cooling our
infrastructure. This may have implications
in terms of operating expenditure due
to increased energy usage, as well as
capital expenditure where new systems
may need to be installed. We are
addressing this through our rolling shop
refurbishment scheme, which incorporates
energy efficiency improvements.
We will incorporate this threat into our key
locations strategy, to further assess the
materiality of this issue globally.
In addition, we may see increases in costs
from our suppliers and business partners,
who are likely to face similar issues.
Link to principal risks: None – link to
operational risks (Group Risks)
Time horizon: Medium term
Impact on our colleagues due
to changing weather patterns.
We understand that, in the 2-degree and
3-degree scenarios, our colleagues will be
impacted by the effects of climate change
in the medium to long term. The increase
in vector-borne diseases in new locations
in the long term may also impact
absentee rates.
Similarly, travel disruptions and increased
costs of living may affect our colleagues’
ability to travel to work. We have a track
record of supporting our colleagues, such
as through our ‘warming up for winter’
campaign outlined on p54, and we will
continue to monitor the needs of our
colleagues to make Entain the best place
to work. In addition, we are addressing
this by exploring our flexible working
arrangements for our different business
functions and operations. For example, we
have worked with our IT teams to ensure
that all colleagues (excluding colleagues
working in shops) have the equipment they
need to work remotely.
Link to principal risks: Health, safety and
wellbeing of our customers, communities
and colleagues
Link to strategic pillars: Invest in our
people and communities
Time horizon: Medium term
Transition risks
Policy and legal
Increased regulatory requirements
to disclose our climate impacts and
demonstrate progress against our
targets. This risk is particularly relevant to
our strategy to grow in key markets, notably
our BetMGM and US strategic priority,
where operations in these markets may
require further compliance with climate-
related reporting regulations. This may
lead to increases in costs of compliance,
such as external assurance costs. We have
an established process in place to report
robust organisational emissions – which are
assured annually by the Carbon Trust – to
comply with our requirements as a UK-listed
company. We continue to monitor changing
regulation in the markets and jurisdictions
where we operate, and improve the
robustness of our emissions reporting.
Link to principal risks: Laws, regulation
and licensing requirements
Link to strategic pillars: Leadership in US,
Expand into new regulated markets
Time horizon: Short term
Market
Changing customer behaviour. In the
2-degree and 3-degree scenarios, where
reducing crop yields and supply chain
shocks may increase the cost of living in
the short to medium term. This may reduce
the income available to our customers
to spend on entertainment. In addition,
more extreme weather events may lead
to changes in how customers engage
with our products. For example, we may
experience a decrease in the footfall of
customers travelling in person to our
shops. We could also notice an increase in
customers receiving entertainment within
the home, with a positive impact on our
digital business and ability to attract new
audiences. We will continue to monitor
these changes and assess their impacts
and potential opportunities. This may
impact capital expenditure decisions when
considering the location of our shops.
Link to principal risks: Trading, liability, and
pricing management
Link to strategic pillars: Grow presence
in existing markets, Expand into
new regulated markets, Extend into
interactive entertainment
Time horizon: Short to medium term
Technology
Reaching our Net Zero by 2035 target.
A key threat that was raised in the climate
workshops is the uncertainty of the wider
economy to respond to climate change, and
therefore the availability and pricing of low-
carbon solutions. We see in our 2-degree
and 3-degree scenarios that the availability
of low-carbon alternatives and engagement
from companies within our value chain would
be lower. This has the potential for lower
availability of these products and services, in
turn leading to increased costs for reaching
our net zero target. This has follow-on
reputational risks to the company.
Conversely, in the 1.5-degree scenario
where there is immediate and rapid
decarbonisation, we anticipate greater
availability of lower-emissions products and
services at scale, reducing the costs required
to deliver our net-zero strategy. This presents
Entain with an opportunity to demonstrate
significant progress and ultimately achieve
our Net Zero by 2035 ambition.
In the longer term, we see a risk due to price
uncertainty in credible carbon removals that
will be required to mitigate any of our residual
emissions to achieve our net zero target in
2035, in line with the Science Based Targets
Initiative (SBTi)’s Net Zero Standard. We will
continue to monitor carbon markets, and
carbon removal standards developments.
Link to principal risks: None – linked to
operational risks (Group Risks)
Link to strategic pillars: Investing in our
people and communities
Time horizon: Short to medium term
Reputation
Increased stakeholder scrutiny on Entain’s
emissions. In the 1.5-degree scenario
where our stakeholders increasingly
care about climate-related issues, we
may face increasing scrutiny on our
environmental strategy. By setting an
ambitious commitment to reach net zero
by 2035, with our target to be validated by
the SBTi, we aim to reduce this threat and
turn it into an opportunity. By striving for a
leadership position in the industry, we see
an opportunity to attract and retain the
best people and continue to build trust with
our customers.
Link to principal risks: Attracting and
retaining key talent
Link to strategic pillars: Investing in our
people and communities, Extend into
interactive entertainment
Time horizon: Short term
Entain plc | Annual Report 2022 Strategic report Overview
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Governance
Financial statements
69
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 82 to 85. As part of this process, mitigation and management of specific risks are
delegated to the relevant divisional or functional heads.
In addition, in 2022, we conducted a series of workshops focussed specifically on
climate-related threats and opportunities. This was led by Entain’s Chief Risk Officer
and facilitated by our external ESG Advisors. The purpose of these workshops was
to gather insights from leaders around the business on the climate-related threats
and opportunities that were relevant to Entain, identifying those that required further
in-depth analysis to determine their impact on our business. In these workshops, we
explored three climate change scenarios outlined in the table below, enabling the
workshop participants to draw out how each would affect Entain’s ability to deliver on
our strategy.
The three scenarios have been tailored for Entain, based on a combination of evidence
and sources, primarily provided by the IPCC, IEA, and PRI (detailed in the table below).
Scenario
Basis
Description
1.5°C
¥ RCP2.6/SSP1
¥ PRI IPR: 1.5C Required
Policy Scenario
2.0°C
¥ RCP4.5/SSP2
¥ PRI IPR: Forecast
Policy Scenario
3.0°C
¥ RCP6.0 / SSP5
Action taken has achieved the aims
set out in the 2015 Paris Agreement
to limit climate change rise to below
1.5°C of pre-industrial levels, but with
significant shifts in policy, cost and
consumer behaviours.
Not much has changed from today.
Some action has been taken, but
it’s very much business as usual.
Uncertainty increases, and impacts of a
changing climate manifest themselves in
vulnerable parts of the world.
Economies around the world have
continued to be powered by fossil fuels.
As a result, the planet is in crisis and
well past the point of no return by 2030.
Global warming has accelerated and
changes in climate are all around, tangible
and, in some cases, catastrophic
The feedback and analysis from these workshops found that many of the pertinent
climate-related threats and opportunities identified are linked to the Principal
Risks outlined on pages 85 to 88. These are outlined above in the Strategy section.
The outcomes of these workshops were reported to the Board ESG Committee in
November 2022 and to the Group Risk Committee in January 2023.
In 2023, we will continue to integrate the process of identifying and managing these
climate-related threats and opportunities into a business-as-usual process, delegating
threats and opportunities and follow-up action identified to the relevant divisional
heads. We will also further embed climate-related threats and opportunities into the
group enterprise risk management framework.
Metrics and targets
On page 61, we outline our Scope 1 and
2 greenhouse gas emissions. We also
report on our global energy consumption
and the percentage of electricity
purchased on renewable energy
contracts, as well as water consumption
and waste for a selection of countries
where data is available.
These metrics are used to monitor
our performance in managing our
transition risks, and to monitor our
progress against our net zero target.
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 since 2019, with our
2022 data to be assured in 2023, with
assurance statements available on the
Entain website. In line with prior years,
the Group will report 2022 scope 3
data within its forthcoming 2022-23
ESG Report, expected to published in
Q2 2023.
Entain current has two non-financial
targets linked with remuneration (see
the Remuneration Committee Report)
– linked with customer satisfaction and
safer betting and gaming. At the time
of reporting, climate-related metrics
are not included linked to remuneration.
Entain does not currently have in internal
carbon price.
Our net zero, and near-term reduction
targets were submitted to the Science-
Based Targets initiative in late 2022 and
are pending verification (as described
on pages 60 to 61. This is expected
in the first half of 2023. As we further
assess our climate-related threats and
opportunities quantitatively, we intend
to identify further metrics and targets
that can be used to assess climate
threats and opportunities (aligned with)
to include in our statement, subject to
materiality. Work will continue on this
in 2023 with further disclosures against
recommendation A to be provided in the
2023 Annual Report.
Entain plc | Annual Report 2022 70
Chief Financial Officer’s Review
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
71
The Group delivered strong year on year
growth in NGR and revenue.”
Rob Wood
Chief Financial Officer
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
aggregated into five reportable segments;
Online, Retail, New Opportunities, Other
and Corporate. This reporting structure
is in line with the Group’s reporting to the
executive management team (“CODM”).
Entain plc | Annual Report 2022 72
Financial performance review
Group
Year ended 31 December
NGR
VAT/GST
Revenue
Gross profit
Contribution
Operating costs
Underlying EBITDAR3
Rent and associated costs
Underlying EBITDA3
Share based payments
Underlying depreciation and amortisation
Share of JV (loss)/income
Underlying operating profit4
Reported Results1:
CC2
%
10%
9%
11%
Reported results1
2022
£m
2021
£m
Change
%
4,348.9
3,886.3
(52.0)
(56.3)
4,296.9
3,830.0
2,714.7
2,435.8
2,128.9
1,851.5
12%
8%
12%
11%
15%
(1,120.4)
(952.7)
(18%)
1,008.5
(15.3)
993.2
(19.2)
(238.1)
(194.1)
541.8
898.8
(17.1)
881.7
(12.3)
(222.8)
(162.5)
484.1
12%
11%
13%
(56%)
(7%)
(19%)
12%
The Group delivered strong year on year growth in NGR and Revenue of +12% (+10%cc2 and +11%cc2 respectively). Online NGR was
down -1% (-2%cc2) reflecting strong Covid comparators and the absorption of regulatory changes, whilst Retail performed strongly with
NGR up +66%5 (+66% cc2,5) and ahead of pre-covid levels in our two biggest markets, the UK and Italy on a like-for-like basis (“LFL”)5.
Contribution for the year of £2,128.9m was +15% higher than last year reflecting the increase in NGR and an increase in the contribution
margin of +1.3pp due to a higher Retail segmental mix versus a Covid impacted 2021. Operating costs (before rent) were 18% higher due
to a full year of trading in Retail and underlying inflation in Online. Underlying EBITDA1,3 of £993.2m was +13% higher than 2021.
Share based payment charges were £6.9m higher than last year, while underlying depreciation and amortisation was 7% higher
reflecting the impact of businesses acquired in the year, the annualisation of prior year acquisitions and continued investment in
the business. Share of JV losses of £194.1m includes a loss of £193.9m relating to BetMGM, which is in line with expectations.
Group underlying operating profit4 was +12% ahead of 2021. After separately disclosed items of £213.2m excluding £5.7m recorded in
interest (2021: £128.3m excluding £5.8m recorded in interest), operating profit was £328.6m, a decrease of £27.2m on 2021.
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
73
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 EBITDAR3
Rent and associated costs
Underlying EBITDA3
Share based payments
Underlying depreciation and amortisation
Share of JV (loss)/income
Underlying operating profit4
Reported Results1:
Reported results1
2022
£m
2021
£m
Change
%
14,090.5
14,165.8
(1%)
CC2
%
(3%)
12.9%
12.7%
0.2pp
0.2pp
(2%)
(3%)
14%
(2%)
9%
(2%)
1,443.7
1,444.1
1,576.9
1,596.1
29.9
26.3
3,050.5
3,066.5
(52.0)
(56.3)
2,998.5
3,010.2
1,829.6
1,871.5
1,254.2
1,294.7
flat
(1%)
14%
(1%)
8%
flat
(2%)
(3%)
41.1%
42.2%
(1.1pp)
(425.0)
(393.7)
829.2
901.0
(1.0)
(2.0)
828.2
899.0
(7.8)
(5.3)
(118.3)
(116.7)
(0.2)
(1.0)
701.9
776.0
(8%)
(8%)
50%
(8%)
(47%)
(1%)
80%
(10%)
Our Online business continues to perform strongly on an underlying basis with full year NGR and Revenue down -2%cc2 year on year as
the business lapped a Covid boosted 2021 and absorbed material effects of regulatory changes, particularly in the UK. Full year NGR of
£3,050.5m reflects a 3 year CAGR of +12%cc2 illustrating the strength of the Group’s Online offering and underlying growth. The Group
continues to focus on expanding its recreational customer base and we are delighted that actives were +7% ahead of last year. We are
also pleased to exit 2022 with Q4 NGR back in growth at +8%cc2 year on year.
In the UK, NGR was -9% behind 2021 as the business absorbed a number of regulatory changes and lapped Covid boosted comparators
from the prior year. Online NGR in the first half of 2022 was -15% year on year, reflecting the greater levels of disruption from Covid-19
versus that experienced in H2. We are pleased to exit the year with UK Online NGR in line during Q4 and active customers at a record
high, with full year actives +13% versus 2021.
In Italy, constant currency NGR was in line year on year despite lapping strong Covid comparatives and losing domestic football in Q4
whilst Italy was absent from the FIFA World Cup. Our Omni-channel strategy in Italy continues to benefit the business with combined
Online and Retail NGR up +22%cc2 year on year, and Online NGR growing at +26%cc2 on a 3 year CAGR basis.
Australia has continued to perform strongly with NGR up +8%cc2 on 2021, and gaining further market share. Active customers were
up +7% year on year as our focus on brand differentiation, the customer and new innovative product launches continues to benefit
the business.
In Germany, new regulation and a lack of regulatory enforcement continues to impact the business with NGR -22%cc2 year on year.
Importantly, however, we received our gaming licences in late November, so we are hopeful that much needed robust enforcement action
will now be more evident in 2023.
Brazil continues to grow with NGR +20%cc2 higher than 2021, ahead of the anticipated regulation of the market. The Sportingbet brand in
Brazil continues to resonate well with our customers with actives +25% ahead of the prior year.
In Georgia, NGR was -7%cc2 lower year on year following the introduction of new regulation at the start of the year which restricted
betting opportunities for certain population cohorts. Crystalbet has responded well to these changes in regulation and maintains its
position as the market leader in Georgia.
Our operations in Canada continue to perform well following the new regulation in Ontario.
In the Baltics, despite high levels of inflation in the region, our brands continue to show their resilience with proforma6 underlying NGR
+5%cc2 YoY and actives +17%.
Our new Entain CEE business which acquired SuperSport in November 2022 has also performed well during the year with proforma6 NGR
+24%.
Entain plc | Annual Report 2022 74
Financial performance review continued
Underlying EBITDAR1,3 of £829.2m and underlying EBITDA1,3 of £828.2m were -8% behind 2021 reflecting lower Online NGR, a -1.1pp
reduction in contribution margin and underlying inflation which was in line with guidance. The Online marketing rate was in line with 2021
and gross profit margin was -1.0pp behind as a result of territory mix and increased taxation in Georgia and Australia, giving rise to the
aforementioned reduction in contribution margin of -1.1pp. Resulting underlying operating profit4 of £701.9m was -10% behind 2021 and,
after charging £114.0m of separately disclosed items, operating profit was £587.9m, £34.1m lower than last year.
Retail
The Retail business is made up of our Retail estates in the UK, Italy, Belgium, Republic of Ireland and Croatia.
Year ended 31 December
Sports wagers5
Sports margin
Sports NGR/Revenue
Machines NGR/Revenue
NGR/Revenue
Gross profit
Contribution
Contribution margin
Operating costs
Underlying EBITDAR3
Rent and associated costs
Underlying EBITDA3
Share based payments
Underlying depreciation and amortisation
Share of JV income
Underlying operating profit/(loss)4
Reported Results1:
CC2
%
68%
0.2pp
65%
57%
61%
Reported results1
2022
£m
2021
£m
Change
%
3,817.0
2,277.5
18.3%
18.1%
705.2
572.6
1,277.8
860.0
852.1
426.1
365.0
791.1
535.8
529.0
68%
0.2pp
66%
57%
62%
61%
61%
66.7%
66.9%
(0.2pp)
(558.4)
(447.5)
293.7
(13.5)
280.2
(2.3)
81.5
(14.6)
66.9
(1.9)
(112.4)
(102.4)
–
–
(25%)
260%
8%
319%
(21%)
(10%)
–
165.5
(37.4)
543%
With the exception of some restrictions in Belgium during the first quarter, the full year was largely unaffected by the Covid restrictions
that have disrupted the previous two years. The strong recovery post Covid, particularly in our two largest markets, the UK and Italy, has
been particularly pleasing resulting in full year NGR of £1,277.8m, +62% ahead of last year (+66%cc2 on LFL5 basis) and representing a
LFL 3 year CAGR of +1%cc2 (pre SuperSport).
In the UK, NGR was +56% ahead of 2021 with both sports and gaming up +56% year on year. The strong performance in the year has
been driven by our ongoing focus on market leading content for our gaming machines and betting terminals. Both sports and gaming
NGR was ahead during H2, with increased sports volumes predominantly driven by our SSBT’s, which provide an experience akin to the
digital offering and now represent over one third of our total sports NGR in UK Retail. Gaming NGR, which was also ahead in H2, was
supported by our best in class machines combined with the most differentiated content on the high street.
Our focus on the customer is producing strong financial results and, as such, we are delighted to recognise the great work done by our
shop colleagues, who will now be paid a minimum of £10.90 per hour, an increase of +9%.
NGR in Italy was up +107%cc2 year on year with H1 2021 heavily impacted by Covid restrictions. Our Retail business in Italy has
recovered quickly post Covid benefitting from our ability to maintain ongoing relationships with our customers throughout Covid via our
omni-channel offering.
In Belgium, NGR was up +40%cc2 year on year despite temporarily closing our estate in January due to local Covid restrictions and the
introduction of EPIS checks in Q4. Belgium has been slower to return to pre Covid levels compared the UK and Italy as a result of the
lingering Covid restrictions in the early part of the year. Following the year end, the EPIS checks introduced in Q4 have been cancelled in
their current form.
Contribution of £852.1m is +61% ahead of 2021 and in line with the increase in NGR. Contribution margin was -0.2pp behind year on year
due to the geographic mix of revenues.
Operating costs including rent were 24% higher than in 2021 as a result of a full year of trading largely uninterrupted by Covid related
closures, the non-repetition of prior year furlough receipts (receipts which were repaid during 2022) and the impact of cost of living
payments to shop staff in light of the current inflationary pressures.
Resulting underlying EBITDA1,3 of £280.2m was £213.3m ahead of 2021. Depreciation of £112.4m was 10% higher than 2021
due to continued investment in our retail estates and the annualisation of depreciation charges on our Omnia till system in the UK.
Entain plc | Annual Report 2022 Strategic report Overview
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Financial statements
75
Underlying operating profit4 of £165.5m was £202.9m ahead of 2021 and, after charging £57.4m of separately disclosed items, operating
profit was £108.1m, £144.1m ahead of last year.
As at 31 December 2022, there were a total of 4,455 shops/outlets (2021: 4,346): UK 2,454 (2021: 2,580), Italy 940 (2021: 940), Belgium
shops 286, outlets 341 (2021: shops 291, outlets 402), Ireland 122 (2021: 133) and Croatia 312.
New Opportunities
Year ended 31 December
Underlying EBITDAR3
Rent and associated costs
Underlying EBITDA3
Share based payments
Underlying depreciation and amortisation
Share of JV (loss)/income
Underlying operating loss4
Reported Results1:
CC2
%
Reported results1
2021
£m
Change
%
(8.8)
(228%)
–
–
(8.8)
(231%)
–
–
(0.4)
(1,025%)
–
–
2022
£m
(28.9)
(0.2)
(29.1)
(0.3)
(4.5)
(0.4)
(34.3)
(9.2)
(273%)
New Opportunities underlying costs3 of £29.1m primarily reflect operating costs associated with the launch phase of unikrn which soft
launched in Q4 as well as innovation costs. After depreciation and amortisation and share of JV loss, New Opportunities underlying
operating loss4 was £34.3m, an increase of £25.1m on 2021. Separately disclosed items for the year were £nil, resulting in an operating
loss of £34.3m.
Other
Year ended 31 December
NGR/Revenue
Gross profit
Contribution
Operating costs
Underlying EBITDAR3
Rent and associated costs
Underlying EBITDA3
Share based payments
Underlying depreciation and amortisation
Share of JV income
Underlying operating profit4
Reported Results1:
CC2
%
18%
Reported results1
2022
£m
25.1
25.1
25.0
2021
£m
32.8
28.5
27.8
(20.0)
(22.1)
5.0
(0.1)
4.9
–
(2.7)
0.4
2.6
5.7
(0.1)
5.6
(0.1)
(2.9)
0.4
3.0
Change
%
(23%)
(12%)
(10%)
10%
(12%)
–
(13%)
100%
7%
–
(13%)
NGR of £25.1m was -23% lower than 2021 due to the prior year disposal of our Exchange business. Excluding the disposal, NGR was
+12% ahead year on year as our greyhound tracks recover from prior year Covid restrictions. Underlying EBITDAR1,3 of £5.0m and
underlying EBITDA1,3 of £4.9m were £0.7m behind 2021 respectively as a result of the disposal. Underlying operating profit4 of £2.6m
was -13% behind and, after charging £0.7m of separately disclosed items, operating profit was £1.9m, £0.6m ahead of last year.
Entain plc | Annual Report 2022 76
Financial performance review continued
Corporate
Year ended 31 December
Underlying EBITDAR3
Rent and associated costs
Underlying EBITDA3
Share based payments
Underlying depreciation and amortisation
Share of JV loss
Underlying operating loss4
Reported Results1:
Reported results1
2022
£m
(90.5)
(0.5)
(91.0)
(8.8)
(0.2)
2021
£m
(80.6)
(0.4)
(81.0)
(5.0)
(0.4)
(193.9)
(293.9)
(161.9)
(248.3)
Change
%
CC2
%
(12%)
(25%)
(12%)
(76%)
50%
(20%)
(18%)
Corporate underlying costs3 of £90.5m were £9.9m 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 loss4 was £293.9m, an increase of £45.6m, largely as a result of the expected incremental loss in the US JV,
BetMGM. After separately disclosed items of £41.1m, the operating loss of £335.0m was £112.7m behind 2021.
Notes
1. 2022 and 2021 reported results are audited and relate to continuing operations
2. Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2022 exchange rates
3. 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
4. Stated pre separately disclosed items
5. Retail performance numbers are quoted on a LFL basis and also excludes the post acquisition performance of shops in Croatia.
6. Proforma results are presented as if the Group had owned the entities since 1 January 2021.
Note: Retail operates in UK, Italy, Belgium, Croatia and Republic of Ireland. During 2022, there was an average of 4,310 shops in the estate, compared to an average of 4,540 in the
same period last year.
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Financial statements
77
Statutory performance review
Year ended 31 December
NGR
Revenue
Gross profit
Contribution
Underlying EBITDAR3
Underlying EBITDA3
Share based payments
Underlying depreciation and amortisation
Share of JV loss
Underlying operating profit4
Net underlying finance costs4
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
NGR and Revenue
CC2
%
10%
11%
Reported results1
2022
£m
2021
£m
Change
%
12%
12%
11%
15%
12%
13%
(56%)
(7%)
(19%)
12%
4,348.9
3,886.3
4,296.9
3,830.0
2,714.7
2,435.8
2,128.9
1,851.5
1,008.5
993.2
(19.2)
(238.1)
(194.1)
541.8
(84.7)
(135.3)
321.8
898.8
881.7
(12.3)
(222.8)
(162.5)
484.1
(75.0)
118.2
527.3
(116.9)
(144.2)
(102.0)
102.9
10.1
393.2
(70.0)
(117.6)
32.9
(13.4)
19.5
275.6
(14.9)
260.7
Group reported NGR and revenue were +12% ahead of last year, up +10% and +11% respectively on a constant currency basis2, with
Online NGR -1% and Retail NGR +62% year on year – further details are provided in the Financial Performance Review section.
Underlying operating profit4
Group reported underlying operating profit4 of £541.8m was +12% ahead of 2021 (2021: £484.1m), with underlying EBITDA3 ahead by
+13% as a result of the increase in revenue. The increase in underlying EBITDA3 was partially offset by an increase in losses from the
Group’s share of the BetMGM joint venture and an increase in depreciation and amortisation. BetMGM losses in the year were £193.9m,
£32.0m higher than 2021 as the business continued to invest in new jurisdictions as they opened, with 8 launches in 2022 and early
2023. Analysis of the Group’s performance for the year is detailed in the Financial Performance Review section.
Financing costs
Underlying finance costs4 of £84.7m excluding separately disclosed items (2021: £75.0m) were £9.7m higher than 2021 with the increase
in costs largely due to the interest on the Group’s new $1bn USD term loan which was raised in Q4.
Net losses on financial instruments, driven primarily by a foreign exchange loss on re-translation of debt related items, were £135.3m in
the year (2021: £118.2m gain). This loss is offset by a foreign exchange gain on the translation of assets in overseas subsidiaries which is
recognised in reserves and forms part of the Group’s commercial hedging strategy.
Separately disclosed items
Items separately disclosed before tax for the period amount to a £218.9m charge (2021: £134.1m) and relate primarily to £116.9m of
amortisation on acquired intangibles (2021: £144.2m), a £45.5m repayment of amounts received in 2021 under the UK Government
furlough scheme (2021: £nil), corporate transaction costs of £23.9m (2021: £9.4m), integration and restructuring costs of £11.8m
(2021: £17.3m), legal and onerous contract costs of £8.1m (2021: £26.2m) and an impairment of £7.0m on closed shops in the UK
(2021: £3.3m). The Group also recorded a loss on disposal of assets of £1.0m (2021: profit of £1.9m) and incurred £5.7m on bridging
loan fees used to facilitate acquisitions in the year (2021: £9.7m including fee write-off on refinancing) as well as releasing £1.0m from
contingent consideration liabilities reflecting the latest estimate of the likely economic outflow (2021: £6.1m charge). In the prior year, the
Group also recorded an £80.2m credit in relation to tax litigation, primarily against the Greek Tax Assessment following a court ruling in
the Group’s favour.
Entain plc | Annual Report 2022 78
Statutory performance review continued
Separately disclosed items
Amortisation of acquired intangibles
Furlough
Corporate transaction costs
Integration/restructuring costs
Legal and onerous contract costs
Impairment
(Loss)/profit on sale of assets
Tax litigation/one-off legislative impacts
Movement in fair value of contingent consideration
Other including issue cost write-off
Total
Profit before tax
2022
£m
2021
£m
(116.9)
(144.2)
(45.5)
(23.9)
(11.8)
(8.1)
(7.0)
(1.0)
–
1.0
(5.7)
–
(9.4)
(17.3)
(26.2)
(3.3)
1.9
80.2
(6.1)
(9.7)
(218.9)
(134.1)
Profit before tax and separately disclosed items was £321.8m (2021: £527.3m), a year-on-year decrease of £205.5m with the
growth in underlying EBITDA3 offset by an increase in BetMGM losses, depreciation, interest and the loss on the retranslation of debt.
After charging separately disclosed items, the Group recorded a pre-tax profit from continuing operations of £102.9m (2021: £393.2m).
Taxation
The tax charge on continuing operations for the year was £70.0m (2021: £117.6m), reflecting an underlying effective tax rate pre-
BetMGM losses and foreign exchange gains on external debt of 15.4% (2021: 14.2%) and a tax credit on separately disclosed items of
£27.9m (2021: charge of £27.5m).
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Financial statements
79
Cash flow
Year ended 31 December
Cash generated by operations
Corporation tax
Interest
Net cash generated from operating activities
Cash flows from investing activities:
Acquisitions & disposals
Cash acquired/disposed
Capital expenditure
Dividends from associates
Investment in associates and other investments
Investment in Joint ventures
Net cash used in investing activities
Cash flows from financing activities:
Equity issue
Net proceeds from borrowings
Repayment of borrowings
Subscription of funds from non-controlling interest
Settlement of financial instruments and other financial liabilities
Repayment of finance leases
Equity dividends paid
Net cash used in financing activities
Foreign exchange
Net increase/(decrease) in cash
2022
£m
2021
£m
846.9
803.8
(106.1)
(100.6)
(98.7)
(73.3)
640.2
631.8
(738.6)
(447.9)
29.9
(31.4)
(212.0)
(176.2)
3.6
–
(175.1)
(1,092.2)
–
(29.4)
(164.4)
(849.3)
–
0.7
838.4
797.2
(271.8)
(566.1)
174.3
–
8.7
(149.8)
(83.0)
(50.0)
616.6
(87.9)
(24.5)
(30.4)
6.8
(14.8)
171.4
(262.7)
During the year, the Group had a net cash inflow of £171.4m (2021: outflow of £262.7m).
Net cash generated by operations was £846.9m (2021: £803.8m) including £993.2m of underlying EBITDA3 (2021: £881.7m).
This was partially offset by separately disclosed items, excluding those relating to amortisation, depreciation and impairment, of
£88.3m (2021: £26.7m income), a loss on discontinued operations of £13.4m (2021: £14.9m) and a working capital outflow of £44.7m
(2021: £86.6m). Included within the working capital outflow is a £47.9m outflow for balances held with payment service providers and
the German regulator as well as customer funds, which are net debt neutral (2021: £4.3m inflow).
During the year £106.1m was paid out in relation to corporate taxes (2021: £98.7m) with a further £100.6m paid out in interest
(2021: £73.3m).
Net cash used in investing activities for the year was £1,092.2m (2021:£849.3m), including cash outflows for M&A activity of £738.6m
(2021: £447.9m), investment in capital expenditure of £212.0m (2021: £176.2m) and an additional £175.1m invested in BetMGM
(2021: £164.4m) partially offset by cash acquired of £29.9m (2021: £31.4m cash disposed) and £3.6m in dividends received from
associates (2021: £nil).
During the year the group received a net £566.6m (2021: £231.1m) from financing activities. £838.4m was raised through new financing
facilities (2021: £797.2m) and £271.8m of debt was repaid, including £100.0m against the Group’s retail bond (2021: £566.1 term loan)
and the repayment of £162.8.m (2021: £nil) of debt within the acquired SuperSport business. As part of the establishment of Entain
CEE and acquisition of SuperSport, the Group received £174.3m of cash for the 25% ownership in Entain CEE of the minority interest
(2021: £nil). £8.7m was received on the settlement of other financial instruments and liabilities including £41.6m of income on the partial
settlement on a number of swap arrangements (2021: £19.1m cost) partially offset by £32.9m of contingent consideration on previous
acquisitions (2021: £130.7m).
During the year, the Group also paid £50.0m in equity dividends (2021: £nil) with the prior year dividend payment of £24.5m to the
minority holding in Crystalbet prior to the acquisition of the remaining 49% of equity in that business, and lease payments of £83.0m
(2021: £87.9m) including those on non-operational shops.
Entain plc | Annual Report 2022 80
Statutory performance review continued
Net debt and liquidity
As at 31 December 2022, adjusted net debt was £2,749.8m and represented an adjusted net debt to underlying EBITDA3 ratio of 2.8x
(2.6x proforma). 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
Issue costs/
Premium
£m
Total
£m
(400.0)
(4.1)
(404.1)
(2,743.5)
40.6
(2,702.9)
(7.0)
–
(7.0)
(3,150.5)
36.5
(3,114.0)
658.5
(2,455.5)
(200.5)
(6.5)
43.8
149.8
(280.9)
(2,749.8)
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, the post balance sheet events disclosed in note 36 and the principal risks and
uncertainties. 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, which have been run individually and in combination, and include
but are not limited to legislation changes impacting the Group’s Online business and severe data privacy and cyber security breaches.
These forecasts are not reliant on any refinancing occurring in the going concern assessment period.
Despite the net current liability position, given the level of the Company and Group’s available cash of £0.3bn post Bet City acquisition,
available financing facilities (including an undrawn revolving credit facility of £0.5bn) 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 Company and Group will have adequate financial resources to continue in
operational existence for twelve months from the date of signing this report, and have, therefore, considered it appropriate to adopt the
going concern basis of preparation in the financial statements.
Notes
1. 2022 and 2021 reported results are audited
2. Growth on a constant currency basis is calculated by translating both current and prior year performance at the 2022 exchange rates
3. 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
4. Stated pre separately disclosed items
Entain plc | Annual Report 2022 Strategic report Overview
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Governance
Financial statements
81
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
9 March 2023
Entain plc | Annual Report 2022 82
Chief Governance Officer’s Review of Risk
Implement a ‘testing plan’ of the most critical controls around
the Group’s significant and principal risks. This will form a crucial
objective throughout 2023 as the new ERM programme matures.
A continued commitment to reduce risk through the introduction
of new business processes where it makes commercial sense to
do so.
Robert Hoskin
Chief Governance Officer
09 March 2023
At Entain, we identify, assess,
evaluate, and manage risk across
our enterprise, understanding the
impact to our business, and the
actions required to bring that risk,
whether a threat or opportunity,
within our risk appetite. This is
across our business in areas such
as finance, operations, legal,
regulatory compliance, cyber-
security, data privacy and EHS.”
Steve Howells
Chief Risk Officer
At Entain, we are committed to active and effective risk
management, creating and protecting value to the organisation
and helping us deliver on our strategic priorities, manage threats
and exploit our opportunities. We support risk taking where it is
forecast to generate returns for the business, but always manage
this in line with our values and ethics. We work together to use
modern risk management methods as an integral part of our day-
to-day decision making, across our whole organisation.
Risk management is fundamental both to good management
practice and to the successful delivery of our mission
and objectives.
2022 has been a year of stabilisation post the Covid-19
pandemic. As we discussed in our 2021 Annual Report, the
impact of Covid-19 has been felt by all businesses and given the
unprecedented nature of these events, our robust enterprise risk
management programme has been imperative in helping the Group
navigate the challenging last couple of years.
While there is still some uncertainty in the short-term, we have
entered 2023 with good trading momentum and a strong Balance
Sheet and, as such, we remain as confident as ever in Entain’s
longer term prospects.
Our risk function has been further enhanced in 2022 by the
appointment of a Chief Risk Officer, supported by a team of 5 risk
managers, who have continued to monitor and assess the risks
(both threats and opportunities) at the same time as developing
a new programme with an updated policy and Enterprise Risk
Management (“ERM”) manual.
As such, during 2022 we have continued to refine our approach to
risk as well as deliver on several of our 2022 objectives.
Looking back on our achievements in 2022 and our priorities
for 2023:
Key successes in 2022
Appointment of a Chief Risk Officer to lead a dedicated risk team.
Enhanced our divisional/functional risk registers, and
developed a significant risk dashboard, allowing the business
to focus on the management of its significant risks and risk
mitigation activities.
Roll-out of the Group Enterprise Risk Management processes to
recent acquisitions as well as the wider Group.
Ongoing rotation of deep dive sessions with the Board and its
Committees on the Group’s principal risks.
Key priorities for 2023
Engage stakeholders at Divisional and Functional levels of risk
ownership to collaborate on the new ERM programme and
undertake formal training and structured risk workshops, the
output being significant risk dashboards.
Work closely with the ‘second and third lines of defence’ to
ensure that the testing of critical controls is occurring and that
they are effective in treating risks.
Implement structured Group Risk Committee meetings in line
with Board meeting cadence (6x annually). This will ensure
sound governance, as well as enabling the ability to inform
of risk movement, give early sight of emerging risks and any
actions required to bring risks within the Entain risk appetite
acceptability levels.
Implement formal risk management reviews and gap analysis of
recent and future acquisitions.
Entain plc | Annual Report 2022 Strategic report Overview
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Governance
Financial statements
83
Risk Governance Structure
How we will access, manage and govern risk
Risk management structure and governance
Structure
The Group has developed and deployed an integrated and
proactive approach to ERM with divisional 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 address risk whilst also continuing
to strengthen our three lines defence model through improved
processes and investment in resources.
Our first line is our day-to-day business operational teams and
functional/divisional risk forums, who actively evaluate and
manage risks as part of their day-to-day activities. The second
line is our risk and regulatory oversight functions and Group Risk
Committee which is chaired by the Chief Governance Officer and
overseen by the Chief Risk Officer. These oversight functions
provide our businesses with expert advice, challenge, and
assistance in ensuring risks are appropriately identified, assessed,
evaluated, managed, and mitigated in line with the Group’s
risk appetite.
Our third line is provided by Internal Audit, who provide
independent and objective assurance over our risk management
processes and the design and operating effectiveness of our risk
mitigation control activities.
PLC Board
Specific risk oversight:
Laws, regulations, licensing and regulatory compliance
Attracting and retaining key talent
Strategy Execution in Growth Markets
Whilst not a principal risk, the Board also reviews the Group’s litigation risk
on an ongoing basis
Nomination Committee
Audit Committee
ESG Committee
Remuneration Committee
Whilst the Board is
responsible for the annual
review of the principal
risk of retention of key
colleagues, 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 colleagues.
Delegated risk oversight*
Delegated risk oversight*
Data Breach and Cyber
Health, safety and well-being
security
Failure to maintain our
technology platform
excellence
Taxes
Trading, Liability and
pricing management
Loss of key locations
Risks also reviewed
continually under Committee
ToR: Regulatory compliance
and licensing, AML, safer
gambling, data protection and
the environment
Whilst the Board is
responsible for the annual
review of the principal risk
of attracting and retaining
key talent, as part of
their responsibilities, the
Remuneration Committee
continually reviews
remuneration risks relating
to employee retention and
the mitigating actions
in place.
Group Risk Committee
Meets six times annually, prior to each Board meeting
Online Division –
Core, Technology
& Emerging Markets
Retail Division
(all regions)
Corporate Division
Functions:
Legal, Regulatory and Compliance
Trading
Data Privacy
Procurement
Customer Service
Mergers and Acquisitions
People Services and Property
HSE and Workplace
Finance
Cyber, Information Security
Internal Audit
Tax, Treasury and Insurance
*Delegated oversight and responsible for deep dive reviews of Group’s principal risks.
Entain plc | Annual Report 2022 84
Chief Governance Officer’s Review of Risk continued
Governance
The Board recognises the benefits of ensuring its risk management
processes are in line with the UK Corporate Governance Code and
meet stakeholder expectations for 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 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,
assessment, evaluation, management, and response to risk.
The Group Risk Committee is responsible for the ERM and Group
Enterprise Risk Management Policy and manual. The Committee
meets formally six times each year and comprises members of the
Executive Committee along with key functional and divisional leaders.
Whilst the Committee considers all identified risks to the business, it
focuses on the principal and significant risks, as well as identifying
potential new emerging risks which are showing signs of developing,
as well as horizon scanning for longer term risks over 5-10 years.
The Entain Group Enterprise Risk Management Policy details
how risks are managed and monitored. For each risk identified,
the impact, actions required to manage, risk owner (Executive
Committee member) and risk lead are identified. The risk owner
and risk lead are responsible for identifying the relevant mitigating
controls and remedial actions required to manage risk appropriately.
The Group Risk Committee opine on the adequacy of the business’s
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
Committees also undertake a deep-dive review of all 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 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 to reflect new and developing issues which might
impact business strategy. Emerging or topical risks are examined to
understand their significance to the business.
How risks are measured
As part of the ERM process, all risks identified are assessed
against a defined set of criteria using an ‘Impact versus Action’
matrix which assesses both the impact to the business and the
actions required to bring those risks within Entain’s risk appetite.
In assessing ‘impact versus action’ we assess the risk against
financial performance, operational processes, legal and PR and
health, safety and security.
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 it affects our
commitment to health, safety, security, and well-being.
– The impact is measured on a scale, from ‘very low’, with limited
damage to a minor stakeholder, and ‘very high’ being severe,
which may have a substantial impact on the Group affecting
many key stakeholders, including customers. The action is
measured from a range of no action required to many actions
needed and additional resource required, also on a scale from
‘very low’ to ‘very high’ (please refer to diagram 1 below).
Risk management process and methodology
Very high
High
Medium
Risk status can change over time, arrows
are placed on the map to show the relative
movement of risks from one position to another.
xxx
xxx
xxx
New risk
xxx
Low
Acceptance line
Very low
Very low
Low
Medium
High
Very high
Acceptance zone
xxx
Potential of risk on objectives
d
e
d
e
e
n
n
o
i
t
c
a
f
o
t
n
u
o
m
A
Action needed
reflects the extent
to which additional
action is required
to manage the risk
to an acceptable
level. If there is
nothing more you
can do to manage
a risk position the
risk at the bottom
of the axis in line
with “Very low”.
Risks (both potential
opportunities and
threats) are mapped
onto the matrix based
on the potential impact
the risk may have
relative to other risks,
and level of additional
action required to
manage that risk.
Emerging Risks are
indicated with a
dotted border.
Acceptance line represents the trigger
point for additional action beyond which
is currently being taken to manage the
risk. If a risk is positioned below the line,
it indicates that no additional action can
be taken or is desired to be taken. If a risk
is placed above the line, it indicates that
action is required to move the risk down
into the acceptance zone.
Potential impact on objectives
includes both positive and negative
impacts. Impact can be measured
in terms of many different aspects
including health and safety; finance;
legal; reputation; and technical
implications. See Entain’s impact
scales for guidance.
Entain plc | Annual Report 2022 Strategic report
Overview
Strategic report
Governance
Financial statements
85
Principal Risks
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.
Data Breach
and Cyber Security
Chief Information and
Technology Officer
Laws, Regulations,
Licensing and
Regulatory Compliance
Chief Governance Officer
Risk category
Risk category
Technology
Legal and regulatory
Reputational
Financial
Impact: Very High
Oversight: Audit Committee
Commercial
Legal and regulatory
Reputational
Financial
Impact: Very High
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 Group’s ability to drive
Online growth.
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 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 takes 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 and
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: All objectives
Link to strategic objective: 1,2,3 & 5
Read more on the Board’s review of Principal
Risks on: page 101
Entain plc | Annual Report 2022 86
Principal Risks continued
Failure to Maintain our
Technology Platform
Excellence
Chief Information and
Technology Officer
Taxes
Chief Financial Officer and Director
of Tax, Treasury and Insurance
Strategy Execution in
Growth Markets
Chief Executive Officer
Risk category
Risk category
Technology
Legal and regulatory
Reputational
Financial
Commercial
Legal and regulatory
Financial
Risk category
Strategic
Commercial
Financial
Impact: Very High
Impact: Medium
Impact: High
Oversight: Audit Committee
Oversight: Audit Committee
Oversight: Board
Principal Risk/Uncertainty
Principal Risk/Uncertainty
Principal Risk/Uncertainty
Risk of ineffective execution of growth
strategy may impact the Group’s goal of
leadership in key growth markets such as
those in the Americas and other emerging
countries, resulting in a deterioration in
NGR growth opportunities in regulated
and regulating territories.
How we manage and mitigate
the risk
An experienced management team has
been established which has extensive
experience of both growth markets and
the betting and gaming industry.
In addition, there is access to the
specialist resources in its parent entities
as well as leading professional advisers.
This structure is intended to ensure that
the growth strategy has every chance of
success in growing markets.
Strategic relevance
Risk of ineffective execution of growth
strategy may impact the Group’s goal of
leadership in key growth markets.
Link to strategic objective: 1
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.
Failure of online systems and servers,
electronic point of sales systems/
electronic displays may result in the
disruption/interruption to trading/
customer experience, and an inability
of the technology function to effectively
support product development may cause
the offerings to our customers to be less
market competitive.
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
– see pages 32 to 35
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
Entain plc | Annual Report 2022 Strategic report
Overview
Strategic report
Governance
Financial statements
87
Safer Betting
and Gaming
Chief Executive Officer and Chief
Governance Officer
Health, Safety & Wellbeing of Customers,
Communities and Employees
Chief People Officer and Chief Governance Officer
Risk category
Operational
Reputational
Commercial
Financial
Impact: High
Risk category
Operational
Reputational
Strategic
Impact: Medium
Oversight: ESG Committee
Oversight: ESG Committee
Principal Risk/Uncertainty
Principal Risk/Uncertainty
Strategic relevance
Breaches in the Group’s HSSE policies
could lead to criminal, civil and/ or
regulatory sanctions, possible harm
to individuals, 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
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 oversees
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.
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 39 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.
Strategic relevance
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
Entain plc | Annual Report 2022
88
Principal Risks continued
Trading, Liability and
Pricing Management
Chief Product Officer
Loss of Key Locations
Chief Governance Officer; Chief
Information and Technology Officer
Attracting and Retaining
Key Talent
Chief People Officer
Risk category
Commercial
Operational
Strategic
Risk category
Operational
Risk category
Operational
Impact: Medium
Impact: Medium
Impact: High
Oversight: Audit Committee
Oversight: ESG Committee
Oversight: Board
Principal Risk/Uncertainty
Principal Risk/Uncertainty
Principal Risk/Uncertainty
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
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,
as well as key Data Centre locations
in Dublin, Vienna, Atlantic City, Las
Vegas and Gibraltar. Disruption in any
of these locations could have an impact
on operations.
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
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
Entain plc | Annual Report 2022 Strategic report Overview
Strategic report
Governance
Financial statements
89
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 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.
The objectives of the strategic planning process are to further
develop the business’ 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 2023
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 85 to 88 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 includes:
The impact of a change in the Group’s duty profile, including
further changes in gaming taxes in key geographies
Significant changes in the regulatory environment/further focus
on AML legislation and breaches in data privacy regulations
Cyber security failings
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 broader economic landscape
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 Group will be able to meet its
liabilities as they fall due over the three-year assessment period to
December 2025.
Entain plc | Annual Report 2022 90
Governance
In this section
Board of Directors
Chief Governance Officer’s Report
91
94
104 Nomination Committee Report
Audit Committee Report
107
ESG Committee Report
113
116
Directors’ Remuneration Report
153 Directors’ Report
Entain plc | Annual Report 2022 Governance Overview
Strategic report
Governance
Financial statements
91
Board of Directors
(as at 9 March 2023)
Tenure
Years:
0
1
2
3
4
5
6
Barry Gibson
Jette Nygaard-Andersen
Rob Wood
Robert Hoskin
Pierre Bouchut
Stella David
Virginia McDowell
David Satz
Rahul Welde
Age and
experience
40-44
45-49
50-54
55-59
60-64
65-69
70+
No. of Directors
1
0
3
0
2
2
1
Experience / Skills:
No. of Directors
5
2
2
3
2
4
4
Gaming
Sector
Financial
Legal /
Regulatory
eCommerce
Technology /
eCommerce
Marketing
Leadership
Diversity
British
American
French
Danish
Indian
No. of
Directors
4
2
1
1
1
Gender
3:6
Entain plc | Annual Report 2022 92
Board of Directors continued
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
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.
Tenure: Appointed to the Board as Non-Executive Director
in December 2019. Appointed as Chief Executive Officer
and Executive Director in January 2021.
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: 71 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. Other listed
company experience includes roles as the chairman of
HomeServe plc, non-executive directorships of Somerfield
plc and National Express plc and group chief executive
of Littlewoods plc. He was formerly the group retailing
director at BAA plc and non-executive chairman of
Harding Brothers Holdings Ltd.
Key strengths and experience:
Barry has enjoyed a distinguished business career, with
deep understanding of the gaming and retail sectors.
He is an experienced leader and board member with
valuable insight on improving company performance and
transformation programmes. Barry continues to create
a Board environment of constructive challenge and
oversight.
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: 54 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, with deep experience of digital transformation
and optimisation of customer experience. Jette has been
instrumental in bringing a number of initiatives to promote
diversity and inclusion within the workplace and to place
customer focus at the heart of Entain’s business.
Age: 43 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’s financial expertise and deep knowledge of Entain’s
business make him uniquely placed to manage his wide-
ranging portfolio as CFO and Deputy CEO, providing
insight to the Board on commercial and financial issues as
well as merger and acquisition opportunities.
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: 51 Nationality: British
Age: 67 Nationality: French
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. Robert is a
chartered company secretary.
Key strengths and experience:
Robert has extensive legal, regulatory and governance
experience. His career at Entain spans 18 years, giving
him huge insight into the business and sector as he has
overseen the Group evolve from holding two gambling
licences to 135 licences in more than 30 different countries.
Robert’s role as Chief Governance officer has been pivotal
in assisting the Board in developing and implementing a
strategy to build a responsible and sustainable business.
Outside interests: Non-executive director and chairman
of the audit committees at Pepco Group, Firmenich SA
and GeoPost SA and a non-executive director of Central
Europe Investment SA.
Committee / attendance:
A 5/5 N 3/3
Biography: Pierre was the chief operating officer for
Europe at Koninklijke Aholddelhaize N.V. (2016-2018), chief
financial officer at Delhaize Group Belgium (2012-2016),
Carrefour SA (2009-2012), Schneider Electric Group
(2005-2009) and CEO of Casino Group (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 had a long career in senior executive and
non-executive roles across finance, retail, logistics,
information systems and property. His familiarity with the
management of large, internationally listed companies
gives him extensive understanding of regulation,
accounting standards and strategy, complementing his
deep knowledge of corporate governance and audit
committee practice. This broad experience makes him
suited to chair Entain’s Audit Committee and to act as its
financial expert.
Outside interests: Non-executive director of Domino’s
Pizza Group plc (where she chairs the remuneration
committee) and Norwegian Cruise Line Holdings Ltd.
Stella is also non-executive chair of Vue International and
a non-executive director of Bacardi Ltd, both of which are
privately owned businesses.
Age: 60 Nationality: British
Committee / attendance:
R 9/9 N 3/3 E 5/5
Appointed Chair of the Remuneration Committee in
February 2023
Biography: Stella was previously CEO of William Grant &
Sons, following more than 15 years with Bacardi Ltd. She
was chair of C&J Clark Ltd, non-executive director and
senior independent director of HomeServe plc and non-
executive director and remuneration committee chair at
the Nationwide Building Society.
Key strengths and experience:
Stella brings lengthy experience in management, the
consumer environment and marketing to the Board. Her
non-executive roles in listed and privately held companies
give her a deep understanding of shareholder views and
best practice standards of corporate governance, as well
as enhancing the Board’s ability to support and oversee
the delivery of Entain’s strategy.
Entain plc | Annual Report 2022 Governance Overview
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93
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
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 a trustee of St Louis University.
Age: 65 Nationality: American
Committee / attendance:
E 5/5 N 3/3 R 9/9
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 was
the first woman to be inducted into the Mississippi Gaming
Hall of Fame and was recently inducted into the American
Gaming Association’s Hall of Fame.
Key strengths and experience:
Virginia’s 40-year career and accomplishments in the
gaming sector have been recognised by a number of
prestigious awards. Virginia has actively engaged with our
stakeholders in her role as Designated Workforce Director.
Throughout her career she has maintained a tireless focus
on developing the next generation of women leaders in the
gaming industry and this understanding of the diversity
and regulatory challenges of the sector has greatly
assisted the Board and the ESG Committee.
David Satz
Independent Non-Executive Director
Rahul Welde
Independent Non-Executive Director
Tenure: Appointed October 2020.
Tenure: Appointed July 2022.
Outside interests: Member of the board of a commercial
gaming and hospitality entity established by the Eastern
Band of Cherokee Indians (EBCI).
Outside interests: Chair of the Advisory Board of Migrant
Leaders, a UK charity.
Age: 63 Nationality: American
Committee / attendance:
E 5/5 A 5/5
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 brings an exceptional perspective on the US
gaming sector to the Board as well as expertise in
gaming regulatory law and policy as it impacts the
Group worldwide. His extensive career in regulation and
legislation has allowed the Board to benefit from his insight
and knowledge as Entain seeks to execute its strategy of
being the leading US operator through its BetMGM joint
venture. His regulatory experience has also provided
insight into the many regulatory, responsible gaming and
compliance issues that the Group faces.
Age: 53 Nationality: Indian
Committee / attendance:
E 2/2
Appointed as a member of the Audit and Remuneration
Committees in February 2023.
Biography: Rahul spent over 30 years working with
Unilever PLC, most recently in a global role as the
Executive Vice President of Global Digital Transformation,
building capabilities across the digital spectrum, including
new business models, innovation, partnerships, processes
and training. Previously, Rahul was Unilever’s Regional
VP Media for Asia, Africa, Middle East, Turkey and Russia.
Throughout his career he has worked in a diverse range of
roles across functions and categories. He has been active
in industry bodies, including as the Regional Vice President
for The World Federation of Advertisers and Chairman of
the Mobile Marketing Association, Asia.
Key strengths and experience:
Rahul brings a lifetime career of knowledge from the
global fast-moving consumer goods sector. He has proven
experience of leveraging digital technologies for the
benefit of business. Rahul has deep expertise in media and
marketing as well as in digital and transformation, leading
large change programmes encompassing technology,
processes and people.
Entain plc | Annual Report 2022 94
Chief Governance Officer’s Report
The Board
2022 was a busy year again for the Board and the Governance
Team. The membership of the Board changed further, with Rahul
Welde joining as an independent Non-Executive Director in July.
Rahul had recently stepped down as Executive Vice President
of Global Digital Transformation at Unilever plc where he drove
digital strategies for the Unilever brands. He is an Indian national
and brings over 30 years’ experience in the global fast-moving
consumer goods sector.
The membership of the Board has entirely changed since 2018,
with six of the nine members appointed since November 2019 and
three directors appointed since 2021. This reflects how far the
Group has changed and matured over recent years, bringing in a
wide spectrum of knowledge and experience beyond traditional
gambling and helping the Group deliver on its sustainability
strategy of adopting best governance practices.
Membership of the
Board...reflects how far
the Group has changed
and matured over recent
years, bringing in a wide
spectrum of knowledge
and experience beyond
traditional gambling.”
Robert Hoskin
Chief Governance Officer
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Financial statements
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Summary of 2022
In my last annual report I summarised our plans for 2022 and set
out below is how we actually did:
2022 Goals
2022 Result
Continue to address the
recommendations in the
Alvarez & Marsal (“A&M”) report.
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 practices.
We have focused on further evolving
our risk function as recommended
by A&M. A Chief Risk Officer has
been appointed and is overseeing an
ERM programme which is described
on page 83 of this Annual Report.
The Board continues to keep under
periodic review if a separate Board
Risk Committee should be required
to support the Audit and ESG
Committees.
We rolled out an extensive ‘Big
Six’ training programme covering
the Code of Conduct, Prevention of
Bribery, Corruption and Tax Evasion,
Governance, Risk and Compliance
(including anti-money laundering),
Modern Slavery, Information Security/
Cyber Security and Data Privacy.
This training is mandatory and at
least 85% of global colleagues had
to complete each module in order
to meet the threshold for the ESG
element of the annual bonus. As
described in the Remuneration
Report, this threshold was met.
We obtained a licence in Zambia and
are close to securing one in Kenya.
BetMGM is now live in an additional
6 states plus Ontario, Canada, where
the bwin, Party and Sports Interaction
brands were also successful in
obtaining Ontario licenses. The Group
has secured a partnership with a
Mexican licensed casino owned by
DRGT and is due to go live with an
online offering in 2023. Brazil, Chile
and Peru are in the process of rolling
out regulation.
We rolled out versions of ARC™ in
Austria, Belgium, Canada, Denmark,
Estonia, France, Georgia, Greece,
Ireland, Italy, Latvia and Sweden as
part of the ESG element of the annual
bonus plan.
The Group continues to fully
cooperate with the HMRC
investigation into the matter relating
to its legacy Turkish-facing business
sold in 2017.
A well-attended Entain: Sustain
event was successfully held in
London in October 2022. A report on
this conference can be found in our
discussion on Board Leadership and
Company Purpose on page 99.
Governance Team
There were no significant changes to my Governance Team in
2022, except in one important regard. We appointed a Chief
Risk Officer, Steve Howells, who reports directly into the Chief
Governance Officer. Following the 2021 Alvarez and Marsal
governance and compliance review, we wanted to address their
recommendation that Entain’s risk function is given more weight in
the organisation, that it be better resourced, a freestanding second
line function with a more complete set of risk tools and capabilities
and should be led by a senior person.
The Chief Risk Officer is supported by a team of five risk managers,
who have continued to evaluate, assess and monitor risks, both
threats and opportunities, across our enterprise ensuring our
critical controls are operating effectively in line with Entain’s
risk appetite. An updated enterprise risk management (“ERM”)
programme has been developed in line with the principles of
the international standard for risk management, ISO 31000.
Our comprehensive ERM framework, supporting manual and
policy consolidates and improves risk governance and reporting,
supporting the identification of principal and significant key risks
that may affect our organisation, quantify and manage them
better, and implement the proper controls to eliminate or reduce
the threat, whilst exploiting opportunities, enabling Entain to
understand the relationship between risk and value creation.
Sadly, Emily Carey, Entain’s Company Secretary is leaving us at
the end of April after nearly three years to take up another career
opportunity. On behalf of the Board I would like to thank Emily for
her hard work and commitment and we wish her the best for the
future. The Board is in the process of recruiting a successor.
Regulatory Settlement
In August 2022 it was announced that the Group had entered into
a regulatory settlement with the British Gambling Commission
and agreed to pay £14m in respect of Entain’s digital business,
and £3m in respect of its Retail business, both in lieu of a formal
penalty. For the avoidance of doubt, a regulatory settlement is not
a fine and Entain offered and agreed the regulatory settlements
with the Commission in order to bring a two year process to a
close and avoid further costly and protracted legal proceedings.
We accept that certain legacy systems and processes supporting
the operations of the Group’s British business during the review
period three years ago were not in line with the evolving regulatory
expectations of the regulator in respect to aspects of social
responsibility and anti-money laundering (“AML”) safeguards.
However, it is important to note that despite the AML issues, the
Commission publicly stated that it found no evidence whatsoever
of criminal spend within Entain’s operations.
An action plan to address the issues identified from the 2019-
2020 assessment was fully implemented before the regulatory
settlement was announced.
The issues raised by the Commission related to the period
between December 2019 and October 2020, which predates
the many changes in the area of safer gambling and AML that
Entain has introduced. For instance, in 2021 Entain launched its
Advanced Responsibility and Care™ (“ARC™”) programme which,
using revolutionary AI technology, operates in real-time and is
individually tailored for each customer.
Entain plc | Annual Report 2022 96
Chief Governance Officer’s Report continued
2023
For 2023 the key areas of focus are:
Undertake a follow-up independent audit of the Group’s
governance and compliance processes, following on from the
2021 Alvarez & Marsal review.
Continue to embed the evolved risk management programme
throughout the business.
Further develop the global Compliance and AML team structures,
with further recruitment where required, and the alignment of
acquired businesses with the Group’s policies, procedures and
risk appetite.
Recruit a new Company Secretary.
Finalise a new strategy for ARCTM which provides a path of
development for the next three years.
Progress the HMRC investigation towards a conclusion.
Hold an Entain: Sustain update interaction in Q4.
Robert Hoskin
Chief Governance Officer
9 March 2023
In May 2022 Entain was awarded the Advanced Safer Gambling
Standard by GamCare, having evidenced the highest standards
of player protection and social responsibility for its online and
land-based gambling businesses in Great Britain. In addition, SBC
awarded Entain Global Socially Responsible Operator of the Year
2022 and EGR North America gave Entain Safer Gambling Provider
of the Year 2022.
Regulated Markets Strategy
On 12 November 2020, Entain announced a clear strategy for
sustainability, growth and innovation. As part of that strategy,
the Group made a commitment to only do business in countries
where it had a local licence or those countries that were on a
path to revise their laws and regulations which would allow us to
then apply for a domestic licence in the near to mid-term. At the
start of 2023 the Group accelerated this process by exiting its
few remaining markets where there is no clear path to market
liberalisation via domestic regulation.
Since 2020 the Group has closed its offering into more than
150 markets where we do not see the prospect of regulation
allowing us to obtain a licence or find a land-based licensed
operator to partner with on attractive commercial terms. We have
also doubled the number of countries where we hold a licence
and currently hold domestic licences in 30 countries and now hold
licences in 25 US States. We remain active in only a small number
of markets where we do not currently hold a domestic licence, but
we see changes in regulation and partnerships with locally licensed
operators that will enable the Group to obtain domestic licence
entry in due course.
More specifically in 2022 we obtained a licence in Zambia and
are close to securing one in Kenya. We are also pursuing licence
options in a number of other countries in Africa. In Canada we were
successful in getting licences in Ontario for our bwin, Party, Sports
interaction and BetMGM brands. In Germany we were awarded
slots and poker licences, whilst also successfully renewing our
sports betting licences. Through our acquisitions of Totolotek,
BetCity and SuperSport we also now have licences in Poland, the
Netherlands and Croatia respectively. Turning to Latin America,
we have partnered with a land-based casino in Mexico and
expect to launch bwin online once the licence consents have been
issued later this year. Brazil, Chile and Peru are all in the process
of rolling out licence regimes in the next 12 to 18 months, albeit
the timelines have been disrupted by varying degrees by domestic
political developments.
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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 the Chairman, Executive Directors,
ExCo members and Company Secretary
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
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
Executive Committee (ExCo)
Responsibilities
Advisory Committee to support the CEO
on management of the Group’s operational
and financial performance
Entain Leadership Team
Business Leaders who own
delivery of business strategy
and communications across
the Group
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
Entain plc | Annual Report 2022 98
Chief Governance Officer’s Report continued
Board Leadership and Company Purpose
Colleagues
Employee forums exist in many of the locations in which we
operate. The forums enable our people to discuss and agree how
their teams connect with the Company purpose, strategy and
values, as well as discussing topics that impact them and their
colleagues. Our Employee forums form a key part of our employee
listening and engagement strategy. In 2022 discussions were
held regarding reward, in particular the level of pay within Retail.
Local forums shared their feedback and management ensured this
was incorporated into the decision-making process.
Each forum meets on a quarterly basis, with an AGM held with all
forums and the Board on an annual basis. In addition, an annual
Global Conference is held where locations without an employee
forum have the chance to engage with the Board.
Virginia McDowell, in her capacity as Designated Workforce
Director, remains a regular attendee at 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. Mark Gregory (former independent Non-Executive Director
and Chair of the Remuneration Committee) and Stella David
(Senior Independent Director) attended the AGM and Annual
Conference respectively.
Employee Forum Global Conference
Entain’s Global Conference was attended by two Board
directors, Virginia McDowell and Senior Independent Director,
Stella David, together with 40 employees representing
19 countries.
The Conference considered a wide range of topics including
business strategy and performance, regulatory/safer gambling,
staff retention, global mobility of employees, M&A strategy,
Retail, Sustainability, Diversity, Equality and Inclusion and
Well-being, and the steps being taken by the business to
support employees through the prevailing difficult economic
environment. The Conference generated a number of take-
aways for management to consider, particularly regarding
Entain’s ESG strategy, our products, and employee development
and retention.
A video recording of the Global Conference was posted on
the Company’s intranet to ensure that all employees have an
opportunity to watch the discussion.
Entain’s purpose is to bring moments of
excitement into people’s lives. Over the year
the Board sought to promote our purpose and
strategy and made decisions in the interests
of all stakeholders, 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.
Suppliers
Colleagues
The
Community
Regulators
Customers
Shareholders
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 – supporting our
people, suppliers, customers and communities.
Entain plc | Annual Report 2022 Governance Overview
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Financial statements
99
In October 2022, we held the second sustainability showcase,
Entain: Sustain, attended by shareholders, regulators,
legislators, media, as well as industry stakeholders and partners.
This demonstrated our commitment to ESG and we announced
the roll-out of our award-winning safer gaming programme ARCTM
to 22 of our global markets. The event was attended by our Chief
Executive Jette Nygaard-Andersen, ESG Committee Chair Virginia
McDowell, Chief Governance Officer Robert Hoskin and Senior
Independent Director Stella David.
AGM
All resolutions put to the 2022 Annual General Meeting received
overwhelming support of those investors who voted, being
approximately 77% of our shareholder base (the same voting level
as 2021). The results of the voting at all general meetings are
published on our website: www.entaingroup.com.
Composition, Succession and Evaluation
Director meeting attendance for 2022
The Board had six scheduled meetings in 2022 and a further three
ad-hoc meetings.
Chairman
Barry Gibson
Executive Directors
Jette Nygaard-Andersen
Robert Hoskin
Rob Wood
Non-Executive Directors
Peter Isola
(resigned 21 March 2022)
Vicky Jarman
Virginia McDowell
David Satz
Rahul Welde
(appointed 1 July 2022)
Meetings
attended
Meetings
eligible to
attend
7A
9
9
9
9
9
8B
1
9
9
9
5
9
9
9
9
9
9
9
1
9
9
9
5
Independent
Independent
upon
appointment
A Missed one ad-hoc call due to travel delay and one scheduled meeting due to illness.
B Missed one scheduled meeting due to a trip rescheduled by Covid.
Understand how the business strategy has been translated
and implemented into everyday working practices.
Gauge the degree in which the Group’s values have been
culturally embedded.
Pierre Bouchut
Stella David
Mark Gregory
Employee Forum AGM
The Employee Forum AGM provides an opportunity for
representatives from each of our five Employee Forums to
present their highlights and key achievements of the past year
and their key aims for 2023. It facilitates a two-way dialogue
between the employees and the representatives of the Board.
Virginia McDowell attended the Employee Forum AGM together
with Mark Gregory, a former Non-Executive Director and Chair
of the Remuneration Committee. The AGM was attended by
70 employees.
The presentations from each Employee Forum shone a light
on the effectiveness of the Employee Forums as a means of
raising key issues and implementing initiatives to drive positive
change within the business. The presentations were followed
by a Q&A session during which topics such as employee
well-being, training and development, HR reporting systems,
employee benefits, the Group Policy Framework and Entain’s
People Strategy were discussed. A number of proposals
were taken away by the representatives of the Board for
further consideration.
These events enable the Board to:
Understand what really matters to our colleagues.
Engage with our colleagues in open, honest and
candid conversations.
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.
During the year, the Remuneration Committee consulted with
institutional shareholders on proposals for a new Remuneration
Policy. A consultation letter was sent to our forty largest
shareholders, plus the main proxy advisors and feedback was
received from 17 institutions. The Chair of the Remuneration
Committee, Senior Independent Director and members of the
Remuneration Committee attended consultation meetings
with investors and proxy advisors and the feedback from these
meetings was shared with the wider Board.
Entain plc | Annual Report 2022 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 in-person meetings in 2022.
In addition there were a further three telephone meetings arranged
during the year concerning urgent matters such as potential
M&A activity.
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 2022 the Group complied with the principles and provisions
of the 2018 UK Corporate Governance Code. The Code can be
found on the FRC’s website at www.frc.org.uk
Key to stakeholder groups:
S Shareholders
C Customers
Su Suppliers
Cu Customers
Com The Community
R Regulators
Strategy
Evolving and embedding
the Group’s strategy
S C Su Cu Com R
M&A activity
S C Su C R
Financial Plan
S C Su C
Received regular updates on potential
Discussed and approved the
Considered customer profile and
M&A opportunities.
3 Year plan.
product development in key markets
and its impact on the Group’s strategy.
Teach-in on Entain’s Innovation Lab.
Discussed regional M&A strategy,
including Central and Eastern Europe
and Australia.
Discussions on the customer
Reviewed and approved M&A projects
recommended by management.
experience and development of the
Customer Charter.
Two-day strategy session,
looking at growth in core and new
markets, competitor analysis and
technology opportunities.
Reflection on Entain’s safer gambling
commitments within the context of
our strategy.
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Financial statements
101
Performance
Business updates
S C R
Undertook segment reviews of the
Retail and digital businesses.
Monitored the performance of the
BetMGM joint venture in the US.
Financial updates
S C Su
Monitored and debated the wider
macroeconomic and geopolitical
environment and its potential impact
on our business.
Received monthly financial
performance updates.
Reviewed and approved the
2023 budget.
Regulatory updates
S C Cu Su R
Received regular regulatory and
legal updates from the Chief
Governance Officer.
Held deep dives on regulatory
developments in the Group’s key
markets and reflected on their potential
impact on the Group’s strategy.
Risk
S C Su Cu Com R
As required under the UK Corporate
Governance Code, the Board carried
out a robust assessment of the Group’s
Emerging and Principal Risks.
Following this assessment, the Board
reviewed and approved the framework
for the oversight of Principal Risks by
the Board and its Committees.
People
C S Com
Monitored the company’s initiatives
to support colleagues impacted by
the pandemic.
Held a Board meeting on People
issues, including senior management
succession, culture, diversity, equity
and inclusion, leadership and talent
development and a review of our
Principal Risk of recruitment and
retention of key employees.
Reflected on the Group’s working
policies in a post-Covid environment.
Held deep dive reviews of the Principal
Responsible Gambling
Risks of Increased Cost of Product,
Recruitment and Retention of Key
Employees, BetMGM and US strategy
and laws, regulation, licencing and
regulatory compliance.
Reviewed and agreed the Principal
Risks for 2023 and their allocation for
monitoring between the Board, Audit
and ESG Committees.
Cu C Com R
Received regular updates on the
Group’s safer gambling activities,
including our Advanced Responsibility
& Care (“ARCTM”) programme.
Received updates from the ESG
Committee monitoring the performance
of the responsible gambling
remuneration metric.
Part of the distribution for weekly
Reviewed and agreed the Group’s
email updates on safer gambling and
regulatory affairs which goes out to
senior management.
annual long-term viability statement.
Reviewed the work and strategy
of the Entain Foundation.
Governance
Reviewed updates to the market
Board governance
Board succession
S C Com R
S C R
S C R
Full Year and Interim Results
Entain Sustain (ESG
sustainability showcase)
Updates on BetMGM and Enlabs
Investor feedback
S
Received feedback on investor
meetings from the Chairman,
Remuneration Committee Chair,
Executive Directors and Chief IR &
Communications Officer.
Considered external reviews of investor
feedback on Entain’s performance
and governance.
Reviewed and updated the Schedule
of Matters Reserved for the Board.
Discussed and approved
a Non-Executive appointment.
Held a Board evaluation covering
the effectiveness of the Board, its
Committees and the performance of
the Chairman and individual directors.
Conflicts of Interest policy
S C Su Cu R
Reviewed and approved the Board’s
Conflicts of Interest Register.
Regulatory disclosures
S C R
Approved the Notice of Meeting
for the AGM.
Following the Audit Committee’s
recommendation, reviewed and
approved the Annual Report and
Accounts and the Interim and Full
Year results.
Entain plc | Annual Report 2022 102
Roles and responsibilities of the Entain Board
Entain plc Board
Responsible for the long-term success of the Group
Responsible for risk oversight
Establishes strategy and monitors its implementation
Sets the standards of integrity, ethics and conduct within the Group
Has regard to the interests of stakeholders in its decision making
Responsible for the overall financial performance of the Group
Leads and directs the Group’s values, culture and purpose
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
Chair
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
t
h
g
i
s
r
e
v
O
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
Provides insight and analysis
to support the CEO and ExCo
Responsible for M&A activity
Responsible for Retail
operations
Chief Governance
Officer
Oversees the Group’s
governance framework
Oversees the Legal and
Compliance function
Oversees government and
regulatory affairs
Chairs the Executive ESG
Steering Group
Chairs the Group Risk
Committee
Chairs the Group Compliance
and Group Payment
Processing Committees
y
t
i
l
i
b
a
t
n
u
o
c
c
A
Entain plc | Annual Report 2022 Governance Overview
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103
Board Commitment, Balance and Independence
Board Evaluation and Effectiveness
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. The Chairman, Senior Independent Director and other
NEDs each have letters of appointment and do not serve in an
executive capacity.
Excluding the Chairman, of the remaining eight Directors, five 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.
During the year, the Board considered requests for additional
external appointments by Non-Executive Directors. In opining
on these requests, the Board took into account the likely
time commitment and any conflicts of interest these external
appointments might raise. The Board agreed requests for Mr Satz
and Ms David to take on additional roles outside Entain.
Conflicts of Interest policy
The 2022 Board evaluation was undertaken through online
questionnaires facilitated by Lintstock, an external evaluation
provider. Lintstock reviewed and summarised the questionnaire
responses, sharing these with the Chairman and Committee
Chairs before discussions were held at the Board and Committees
on the themes arising from the evaluation. In parallel, the Senior
Independent Director facilitated the performance review of
the Chairman, holding a discussion with the Board (without
the Chairman present) where the results were reviewed and
considered. The Senior Independent Director discussed the results
directly with the Chairman.
The Chairman held reviews of each Director’s performance through
the use of individual questionnaires and one-to-one interviews.
The 2022 Board review concluded that performance was effective
during the year. Areas of priority for 2023 included agenda
management, in particular to allow for more time to review
the Group’s progress on implementing strategy; other actions
identified include continued monitoring of succession planning and
maintaining focus on technology.
The Board has a Conflicts of Interest policy and an annual conflicts
authorisation process, whereby the Board reviews and approves
Entain’s Conflicts of Interest Register and seeks confirmation from
each Director of any changes or updates to their position.
The 2021 evaluation action plan was addressed in the
following way:
Theme
How it was addressed
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.
Alignment on
remuneration
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 programme 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.
Rahul Welde joined the Board in July 2022 and received a tailored
induction following his appointment. This included one to one
meetings with our Executive Committee, segment and functional
leaders and our Internal and External Auditors. Rahul also visited
our Retail estate and attended externally facilitated safer gambling
training with Entain colleagues.
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 face to face training on the Criminal Finance Act and Anti-
Bribery and Corruption legislation and on developments in climate
change reporting, including TCFD.
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.
Strengthening the
Board’s knowledge
and experience in
data and
technology
Greater insight
into customers
Risk oversight
The Board held an externally facilitated
workshop to consider and reflect on
remuneration practices ahead of work to
design the proposed Remuneration Policy.
The Board received briefings on
technology and data and considered
external benchmarking when reviewing
the organisational structure of Entain’s
technology function in the context of
the Group’s strategic needs and the
appointment of a new Chief Information
and Technology Officer.
The Board discussed the changing
demographic of Entain’s customer base
by market and product and reviewed the
Customer Charter which was rolled out
during the year.
The Board discussed the development of a
customer metric for inclusion in the Group’s
annual bonus and was kept apprised of
the role creation and hiring of a new Chief
Customer Officer.
In addition to its regular briefings on risk
management, the Board considered and
approved proposals for the appointment
of a new Chief Risk Officer and received
briefings on the roll out of developments
to the risk management programme.
Entain plc | Annual Report 2022 104
Nomination Committee Report
The Committee
focused on ensuring
that the Board has the
appropriate skillsets and
experience to support
the implementation of
the Company’s strategy
and challenges facing
the business.”
J M Barry Gibson
Chair of the Nomination Committee
I am pleased to introduce the Nomination Committee report for
the year.
Following a period of Board change, this year the Committee
focused on embedding recently appointed directors and ensuring
that the Board has the appropriate skillsets and experience
to support the implementation of the Company’s strategy and
challenges facing the business with wider macroeconomic and
geopolitical uncertainty.
In July we appointed Rahul Welde to the Board as a Non-Executive
Director. The Committee provided input on Rahul’s induction
programme using the feedback from our Non-Executive Directors
appointed the previous year.
In February 2023, Mark Gregory stepped down from the
Nomination Committee and the Board. I want to thank Mark for his
hard work and support during his tenure.
Diversity and inclusion remains a core consideration for the
Committee. Following Rahul’s appointment, we are now fully
compliant with the Parker Review’s target to appoint at least one
Board member from an ethnic minority background. We remained
compliant with the external target laid out in the FTSE Women
Leaders Review (formerly the Hampton-Alexander Review) of
a 33% female Board, however we fell short of our own internal
goal of 40% female representation at the Board (as laid out in our
Board Diversity Policy). During 2023 we intend to revisit Board
composition and diversity in recognition of the importance the
Board places on all forms of diversity and its commitment to further
progress in this area.
J M Barry Gibson
Chair of the Nomination Committee
9 March 2023
Entain plc | Annual Report 2022 Governance Overview
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Financial statements
105
The role of the Committee
Committee membership and attendance
The Committee’s membership consists of the Senior Independent
Director and the chairs of each of the Board Committees.
The Committee had three meetings during the year.
Member
Barry Gibson (Chair)
Pierre Bouchut
Stella David
Mark Gregory
Virginia McDowell
Number of
meetings
attended
Number of
meetings eligible
to attend
3
3
3
3
3
3
3
3
3
3
The 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 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 Committee’s terms of reference were reviewed, updated and approved
by the Board during the year. These can be found on the Company’s website
at www.entaingroup.com.
Entain plc | Annual Report 2022 106
Nomination Committee Report continued
Activities
Board appointments
The Committee engaged Russell Reynolds Associates for the
search for a new Non-Executive Director. A short list of candidates
was put forward by Russell Reynolds Associates and these
candidates met members of the Committee, the Chief Executive
and Chief Governance Officer. The Committee concluded that
Rahul Welde would be an excellent addition to the Board, with
valuable customer service and digital transformation insight,
and therefore recommended Rahul’s appointment to the Board.
Rahul Welde was appointed to the Board on 1 July 2022.
Russell Reynolds Associates have no other connection with the
Company or individual Directors and are accredited under the
enhanced voluntary code of conduct for Executive search firms.
Board composition and Board Committees
To assist in succession planning for Non-Executive Director
appointments and Committee membership, the 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 business and
regulatory challenges.
The Committee assessed the appointment of Rahul Welde as
a Non-Executive Director and recommended that he join the
ESG Committee.
During the year the Committee considered membership of each
Board Committee in light of Board changes over the past two years
and focused on succession planning for the chairs and membership
of each Committee as this had been an action arising from the
2020 and 2021 Board and Committee evaluation. The Committee
agreed an immediate successor for each Committee chair from
the current Non-Executive Directors and discussed longer term
succession planning.
Independence
The 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
Committee also considered the time commitment and performance
evaluation of each Director standing for appointment.
Diversity
The 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. The proportion of women on the Board at
31 December 2022 remained at 36%. Further information on
gender balance amongst the Group’s senior management can be
found on page 53 of the Strategic Report.
Following Rahul Welde’s appointment, as at 31 December 2022
the Board meets the Parker Review’s target of at least one Director
from an ethnic minority background.
The Committee reviewed and recommended the Board Diversity
Policy which was subsequently approved by the Board. This can be
found on our website at www.entaingroup.com.
Committee evaluation
An annual review of the Committee’s performance and
effectiveness was undertaken using a questionnaire facilitated by
an external board review firm (Lintstock).
The evaluation concluded that the Committee was working
effectively. Actions for 2023 included a continued focus on
succession planning and how to optimise the Board’s engagement
on Diversity, Equity and Inclusion topics.
The Committee remains focused on the main action from both the
2020 and 2021 Board and Committee evaluations to ensure that
succession planning remains a key area of focus. During 2022
succession planning has been reviewed at the Board (for senior
executive management), the Chairman’s Committee (for Executive
Directors), the Nomination Committee (for Non-Executive Directors
and the Committees) and at the Audit Committee (for the finance
leadership of the Group).
Chairman’s Committee report
The Chairman’s Committee is the forum for the Non-Executive
Directors and Chairman to meet in executive session.
Three Committee meetings were held during 2022. Topics
discussed included succession planning for the Executive Directors,
business performance and strategy.
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Audit Committee Report
Introduction
As Chair of the Audit Committee, I am pleased to present our
report for the year ended 31 December 2022, 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.
Over the year, the Committee spent time considering the further
development of the Group’s Enterprise Risk Management
Framework, receiving presentations from the newly appointed
Chief Risk Officer on proposals to evolve the Group’s risk structures,
frameworks and approach. In parallel the Committee undertook
deep dive reviews of the Principal Risks relating to Data Breach
and Cyber Security, Technology Failure, Taxes and Trading, Liability
and Pricing Management.
The Audit Committee has a key role in providing independent
challenge and oversight across financial reporting and controls for
the Group. The Committee continued to challenge management
and the external auditors across a number of topics, including
key accounting judgements and control matters. The Committee
worked closely with the ESG Committee when considering non-
financial reporting and disclosure, including reviewing forthcoming
changes to ESG reporting, notably around TCFD.
In February 2023, Mark Gregory and Vicky Jarman stepped down
from the Audit Committee. I want to thank Mark and Vicky for
their work, engagement and valuable insight. Rahul Welde has
subsequently joined the Committee as a new member and will
undertake a Committee induction programme in the first half of
the year.
The Audit Committee continues to have a strong mix of financial,
accounting, risk and sector experience amongst its members,
which we utilise to undertake our duties effectively.
Pierre Bouchut
Chair of the Audit Committee
Over the year, the
Committee spent time
considering the further
development of the
Group’s Enterprise
Risk Management
Framework.”
Pierre Bouchut
Chair of the Audit Committee
Entain plc | Annual Report 2022 108
Audit Committee Report 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.
Review and monitor the internal audit programme and
its effectiveness.
As at 31 December 2022 the Audit Committee comprised four
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, Firmenich
S.A. and GeoPost 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.
The Board has confirmed that it is satisfied that the Audit
Committee as a whole has an appropriate level of independence
and experience and relevant financial and commercial experience
across various industries, including the gaming sector, to assess
the issues it is required to consider.
Committee members 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.
Regular attendees at the meetings include the Chief Financial
Officer & Deputy CEO, 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.
Review and monitor Entain’s systems of internal control, financial
reporting and risk management.
The Committee had five meetings during 2022.
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 Terms of Reference can be found on the Company’s
website at www.entaingroup.com.
Member
Pierre Bouchut (Chair)
Mark GregoryA
Vicky Jarmen
David Satz
Number of
meetings
attended
Number of
meetings eligible
to attend
5
4
5
5
5
5
5
5
A Missed one scheduled meeting due to a trip rescheduled due to Covid.
In February 2023, Mark Gregory and Vicky Jarman stepped
down from the Committee and the Board. Rahul Welde joined the
Committee on 23 February 2023.ard
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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 2022, the Company has
followed the process detailed above. In doing so the Directors confirm that they have reviewed the complete 2022 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.
Entain plc | Annual Report 2022 110
Audit Committee Report continued
Activities
Financial 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, including
the appropriateness of Group’s revenue from online operations and
recoverability of the carrying value of the investment in the Parent
Company. In undertaking its review, the Committee focused on the
integrity of the Group’s financial reporting process, the clarity of
disclosure and compliance with relevant reporting standards.
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.
The 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 2022 is set out on page 80.
In considering the Annual Report and Accounts, the
Committee assessed whether the report was fair, balanced
and understandable. The process undertaken is outlined on
page 109. The Committee reviewed the consistency of the
narrative disclosures and financial statements with climate
risks and opportunities. It received a report from management
on the verification process undertaken in respect of the annual
report, including TCFD disclosures. The Committee then made
a recommendation to the Board, which in turn reviewed the
report as a whole, confirmed the assessment and approved the
report’s publication.
Risk
During the year the Committee received briefings on the evolution
of Entain’s risk structures, frameworks and approach from the
newly appointed Chief Risk Officer. The Committee considered
best practice in terms of Enterprise Risk management design and
reporting and the practical implementation of risk management
rather than theoretical tools. During 2023 it will continue to
monitor the further development and rollout of Entain’s risk
management programme.
The Committee is responsible for the oversight of the Principal
Risks relating to Cyber Security, Technology Failure, Taxes and
Trading, Liability and Pricing Management. Throughout the
course of 2022, the Audit Committee has performed detailed
reviews by seeking assurances from management that they have
suitable measures in place to monitor, manage and mitigate the
relevant risks.
External audit
The 2022 financial year-end is KPMG LLP’s fifth financial reporting
period as the Group’s external auditor, following the external
audit tender process in 2018, with Mark Flanagan undertaking his
second 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.
It is anticipated that a retender for audit services will be completed
by 2028 or sooner, in line with relevant guidelines. The Committee
believes that the anticipated timeline for the retender of audit
services is in the best interests of shareholders. It provides an
appropriate balance of factors such as the auditor’s knowledge
of controls and risks, maintaining audit quality, independence and
objectivity, and providing value for money.
The Group is in compliance with the requirements of the Statutory
Audit Services for Large Companies Market Investigation
Order 2014.
Effectiveness of the external audit
As part of its assessment of audit effectiveness, the Audit
Committee considers reports from the external auditor and
management on the audit process and quality procedures,
together with private meetings between the Committee and the
external auditor and between the Committee Chair and the lead
audit partner. In addition a survey of senior finance colleagues
was undertaken which focused on the following areas of
audit effectiveness:
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 review concluded that the external audit process had been
effective and noted the improvements made to the audit process
during the year.
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Non-audit services
Effectiveness of Internal Audit
The Audit Committee continued to monitor and review the
effectiveness and capability of the Internal Audit function over the
year. In assessing and determining effectiveness, the Committee
met privately with the Director of Internal Audit, considered
and approved the Internal Audit annual plan and surveyed
management on their view of the effectiveness of Internal Audit.
The Committee concluded that Internal Audit had unrestricted
scope and access to information and sufficient resources to
fulfil its annual work plan. This conclusion was strengthened
by management’s positive feedback on the quality of the work
performed and the additional assurance provided to management
by the scope of Internal Audit’s processes.
Whistleblowing policy
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.
Committee evaluation
The Committee undertook a review of its effectiveness through
an online questionnaire administered by an external facilitator
(Lintstock). Feedback from the review confirmed that the
Committee had performed effectively during the year. It was
agreed that the Committee would maintain its focus on risk in 2023
as the Group’s Enterprise Risk Management framework continues
to evolve.
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.
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 2022, the
total non-audit fees as a percentage of the audit fees paid to the
external auditors was 2.8%. 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 2022 the fees paid in respect of
due diligence for acquisitions to the external auditors was £nil.
Internal Audit
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 Director of
Internal Audit attends meetings of the Committee.
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 85 to 88
under Principal Risks), which included:
Reviews of anti-money laundering and safer gambling processes
across various jurisdictions and businesses.
Digital Fraud Management.
Recruitment, Talent Resilience and Retention practices.
High-risk customer management.
Environmental Sustainability Operations.
Data retention management.
Safer gambling interactions management.
IT governance.
Review of the Group’s compliance with the UK Modern Slavery
Act and adequacy of provisions to mitigate risks of slavery.
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 2023 Internal Audit Plan.
Entain plc | Annual Report 2022 112
Audit Committee Report continued
Accounting and key areas of judgement and estimate
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.
Matter considered
Separately disclosed items and Alternative
Performance Measures
The Group separately discloses certain items in order to
allow a clearer understanding of the underlying trading
performance of the business. In 2022, the Group has
recorded a net charge in respect of items which have been
separately disclosed of £218.9m in the Income Statement.
In addition, non-GAAP measures have been provided
within the Annual Report and Accounts to assist in the
articulation of the underlying business performance. Non-
GAAP measures relate to industry standard KPIs which are
commonly used by the Group’s peers and market analysts.
IFRS 3 fair value of business combinations
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 estimates including the value
of acquired intangibles (£566.9m) and goodwill (£622.3m).
Action
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.
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.
The Audit Committee has reviewed the estimates made
in connection with the accounting treatment for business
combinations, 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 it’s has assessed the
assumptions used and conclusions reached.
The Committee has also considered the conclusions
reached by KPMG and has concluded that the treatment
within the financial statements is appropriate.
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ESG Committee report
Introduction
During 2022, the ESG Committee continued to monitor and
provide focus, support and challenge on environmental, social and
governance issues. We remained guided by Entain’s Sustainability
Charter which outlines our ESG leadership ambitions across four
pillars of Regulation, Responsibility, Governance and People &
Communities. The Charter remains an important part of our ESG
leadership position within the gaming sector.
The Committee continued to monitor the management and
mitigation of the Principal Risks allocated to it by the Board.
We hold a deep dive on each of the Principal Risks – Safer
Betting and Gaming, Health, Safety & Wellbeing of Customers,
Communities and Employees and Loss of Key Locations – and
ensure that our observations are fed back to the Board.
A key area of focus for the Committee this year was on
environmental performance and the implementation of our Net
Zero ambition. We received regular updates on the work being
undertaken on TCFD reporting, including the output of workshops
and scenario planning and how this might impact our strategy.
In July we were joined by Rahul Welde. The Committee has
already benefited from Rahul’s insight, following an executive
career in consumer goods, digital transformation and e-commerce.
My thanks go to Peter Isola for his valuable service to the
Committee, having stepped down from the Board and the ESG
Committee in March 2022.
Virginia McDowell
Chair of the ESG Committee
9 March 2023
The Committee
remained guided by
Entain’s Sustainability
Charter which outlines
our ESG leadership
ambitions across four
pillars of Regulation,
Responsibility,
Governance and People
& Communities.”
Virginia McDowell
Chair of the ESG Committee
Entain plc | Annual Report 2022 114
ESG Committee Report continued
The role of the Committee
Activities
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 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 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.
Committee membership and attendance
During the year, the Committee had four members. Peter Isola
stepped down from the Committee on 21 March 2022 upon leaving
the Board. Rahul Welde joined the Committee on 1 July 2022 upon
his appointment to the Board.
Regular attendees at the meetings include the Chief Governance
Officer, Director of Internal Audit, Group General Counsel, Chief
People Officer and heads of the compliance teams.
The Committee had five meetings during the year.
Member
Virginia McDowell
(Chair)
Stella David
Peter IsolaA
David Satz
Rahul WeldeB
Number of
meetings
attended
Number of
meetings eligible
to attend
5
5
1
5
2
5
5
1
5
2
A Resigned from the Committee on 21 March 2022.
B Joined the Committee on 1 July 2022.
Responsible betting and gaming
The Committee received regular updates on the Group’s
responsible betting and gaming programme, including the
continued development and impact of the ARCTM programme.
Briefings were held on ARCTM, including on how academic insight
from the Harvard Medical School Faculty had shaped the customer
solutions offered by ARCTM.
A deep dive review of the Principal Risk: Safer Betting & Gaming
was undertaken, where the Committee considered potential
developments in technology and regulatory guidance in key areas
such as affordability and vulnerable customers.
The Committee undertook a half-year and full-year review of the
delivery of safer betting and gaming project metrics as part of
the responsible 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
Committee determined it was satisfied that these metrics had been
met and made a positive recommendation to the Remuneration
Committee as part of its assessment.
Further information on the responsible betting and gaming
remuneration metric is outlined on page 147 of the Directors’
Remuneration Report.
Gaming licence compliance
The Committee considered key elements of the Group’s gaming
licence compliance programme, including the development and
update of Entain’s Sports Betting Integrity Policy.
Compliance governance
The Committee received quarterly reports on international, UK,
Retail and digital compliance developments and monitoring of the
Group’s compliance management. It reviewed the impact of M&A
activity on the Group’s compliance programme and the regulatory
risks associated with new market entry.
Code of Conduct
The Committee reviewed the Group’s Code of Conduct and the
programme of training and communication to raise awareness and
understanding throughout the organisation. Committee members
took eLearning modules developed for the Code and were briefed
on the roll out of attestation of compliance with the Code during the
year. Deep dives on the Group’s anti-money laundering and anti-
bribery and corruption programmes were held during the year.
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Privacy and data protection
Regular updates on data privacy and protection were given to
the Committee, including legal and regulatory developments
across the Group’s different jurisdictions and the input from the
Data Privacy team to innovative safer gambling solutions such
as ARCTM and Single Customer View.
The 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 Committee discussed the Group’s environmental strategy
and our commitment to being carbon net zero by 2035.
HSSE performance was monitored by the Committee through
regular updates on the Group’s HSSE performance indicators
and initiatives. The Committee reviewed and approved the
proposed HSSE strategy for 2023 as well as agreeing the
Group’s HSSE KPIs for the forthcoming year.
The Group’s progression on TCFD continued to be actively
monitored by the Committee and this was supplemented by
training on ESG reporting for the Board.
The Committee undertook deep dive reviews on two Principal
Risks allocated to it for monitoring: health, safety and the
wellbeing of customers and employees and loss of key locations.
Diversity and inclusion
The Committee received quarterly reports on the Group’s
diversity and inclusion performance and employment data.
During the year deeper briefings were held on People initiatives
within the Company, including employee engagement, a revised
learning offering for colleagues and apprenticeships.
Modern Slavery Act statement review
The Committee reviewed the Group’s Modern Slavery and
Human Trafficking Statement, noting the progress made in
corporate governance, supply chain process enhancements
and training. Entain continued to partner with Unseen, a
UK’s anti-slavery charity, who undertook a comprehensive
gap analysis of our current modern slavery approach.
This informed our continuous improvement efforts, including
the development of supplier screening tools and employee
onboarding checks.
The Modern Slavery statement can be viewed on our website
at www.entaingroup.com/sustainability/modern-slavery-
statement
Other reviews
The Committee oversaw the annual ESG report, reviewing the
content and giving feedback to management on its content.
Committee evaluation
The Committee undertook a review of its effectiveness
through an online questionnaire administered by an external
facilitator (Lintstock). Feedback from the review was that
the Committee had performed strongly, with a particularly
high rating for the Committee Chair. Areas of focus for 2023
included developing a longer-term strategy for the Committee
with clear objectives and consideration of how best to focus
the wide remit and agendas of the Committee.
Entain plc | Annual Report 2022 116
Directors’
Directors’
Remuneration
Remuneration
Report
Report
In this section
117
Annual Statement from the
Remuneration Committee Chair
The Remuneration Committee
121
Executive remuneration at Entain
123
129
Remuneration in context
135 Directors’ Remuneration Policy
146
Annual Report on Remuneration
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117
Following another
strong year for Entain,
the Committee’s
remuneration decisions
reflect the alignment of
compensation with the
Group’s performance
culture.”
Stella David
Chair of the Remuneration Committee
2022 Group performance
2022 has seen another year of strong financial, operational
and strategic performance for Entain. We have expanded our
global footprint and broadened our appeal, while providing a
safe environment for our customers.
Key performance highlights in 2022 include:
Group NGR up 12% (10% at constant currency).
Retail NGR up 66% at constant currency and on a like-for-
like basis, with volumes ahead of pre-Covid levels.
Number of active customers up 7% year-on-year.
Group underlying EBITDA up 13% at £993m.
Our joint venture in the US, BetMGM, continues to perform
strongly and is now live in 26 markets, with NGR up 71%
year-on-year.
Completion of five acquisitions, including SuperSport in
Croatia, driving further growth and geographic diversity.
Launch of unikrn’s esports betting and skill-based wagering
products in Brazil and Canada.
Continued progress on responsibility and sustainability;
we are the only global operator with 100% of our revenue
derived from regulated or regulating markets and our
Advance Responsibility & Care™ (“ARC™”) programme has
now been rolled out across 22 markets.
Annual Statement from the
Remuneration Committee Chair
On behalf of the Board, I am pleased to present the Directors’
Remuneration Report (the “Report”) for the year ended
31 December 2022.
This is my first Report as Chair of the Remuneration Committee.
I would like to take this opportunity to thank my predecessor, Mark
Gregory, for his huge contribution as Chair and Vicky Jarman for
her significant commitment to the work of the Committee. Further,
I would like to welcome Rahul Welde, who joined the Committee in
February 2023, when Mark and Vicky stepped down.
This year we will be asking shareholders to vote on two
remuneration resolutions at our 2023 AGM:
Our Remuneration Policy (the “Policy”), which outlines the
remuneration framework that will apply to our Executive
Directors, Non-Executive Directors and the Chairman
of the Board following approval; and
Our Annual Report on Remuneration, which presents
remuneration outcomes for 2022 and explains how
we intend to apply the Policy in 2023.
Entain plc | Annual Report 2022 118
Directors’ Remuneration Report continued
2023 Remuneration Policy changes
New Policy
Our previous Policy was approved by shareholders at the 2020
AGM. During 2022, the Committee undertook a rigorous review of
the remuneration framework at Entain with a view to ensuring that
it remains effective and continues to engage, motivate and retain
the talented colleagues who are critical to the future success of
the business.
As part of this we have considered a number of internal and
external reference points and consulted extensively with
shareholders and their representative bodies in order to listen to
and reflect on their views on remuneration at Entain. I would like
to thank shareholders for their input during this process, which
was fed back to and discussed in full by the Committee, and which
helped shape the output of the Policy review.
Business context
As set out in more detail in the Chief Executive’s Review on pages
12 to 21, Entain’s vision is to be the world leader in sports betting,
gaming and interactive entertainment. We operate in over 40
domestically regulated or regulating markets across the world and
have ambitious growth plans, including in the rapidly expanding
US market. Our businesses outside the UK currently represent
more than 70% of our online revenues, a proportion which is
expected to increase further going forward. Similarly, from a people
perspective, more than 85% of colleagues who support our online
operations are based outside the UK, while our leadership team
is increasingly international with the majority of our Executive
Committee based in non-UK locations.
In addition, the Committee recognises that we operate in a sector
in which the market for talent has been intense for several years,
a situation that we expect to continue for the foreseeable future.
Individuals who can demonstrate a proven track record for delivery
are in strong demand and our people are often targeted by firms
outside our traditional competitor base, particularly US gaming
operators looking to strengthen their teams with digital gaming
experience. We have first-hand experience with recent departures
from our senior team, which are disruptive to the business and
jeopardise Entain’s ability to deliver on its ambitious growth plans.
To maximise value for stakeholders, the Company needs to be
able to hire and retain the best people globally. The UK market
continues to represent one important reference point for talent,
and our previous Policy is closely aligned with the UK-listed
environment, including from a governance and best practice
perspective. Nevertheless, as we move from a pure-play betting
and gaming company to a technology and entertainment business
based in multiple markets across the world, we are competing
against a broader range of organisations. From this angle, our
experience is that the existing Policy does not always provide the
scope necessary to attract and retain the people we need to deliver
the exceptional performance we know Entain has the potential to
achieve. We are having to pay more to hire and retain talent at one
or two levels below Executive Committee and Executive Director
level and as a result are experiencing significant compression in
remuneration for our most senior people. This is supported by
relevant market data, which highlights that pay levels in global
firms, against which our business regularly competes for talent,
often materially exceed our current offering.
As such, the Remuneration Committee is proposing a revised Policy
which is intended to address these issues and ensure that we
remain competitive within our key markets.
1. Increase in maximum LTIP opportunity with additional
performance stretch
The Committee’s preference is to make the package more
competitive from a global context by increasing LTIP award levels.
While a range of approaches were considered during the Policy
review, including a greater focus on fixed and/or short-term pay,
ultimately it was felt that increasing the focus on our long-term
incentive was the most appropriate and robust route:
It most effectively aligns with the interests of our shareholders,
ensuring any additional remuneration is performance-tested,
focused on the long term and delivered in shares.
While we recognise that these levels are towards the upper end
of the UK market, they remain at the lower end when viewed
through a US competitor lens.
It also allows us to respond to market pressures on LTIP award
levels in our broader management population, mitigating current
issues with internal compression.
The new maximum LTIP award levels will be:
CEO – 450% of salary (from 300%), and
Other Executive Directors – 400% of salary (from 250%)
The Committee recognises the importance of any additional
remuneration being subject to the delivery of stretching
performance goals.
As such, for the CEO, the level of vesting at threshold performance
will be reduced from 25% to 16.7% if an award is made at the
new maximum level of 450%, so that the CEO’s remuneration at
threshold performance is broadly unchanged. For award levels
between the current opportunity of 300% and 450%, the level of
threshold vesting will be scaled back on a pro-rata basis. A similar
approach will be taken to the threshold vesting level for awards
made to the other Executive Directors, between their current and
new opportunities of 250% and 400% respectively.
Similarly, the level of Total Shareholder Return (“TSR”) performance
required for maximum vesting will increase from the 75th
percentile, on a pro-rata basis, to the 85th percentile for awards
made at the new maximum levels (450% for the CEO and 400% for
other Executive Directors).
TSR performance for the 2023 LTIP grant, will continue to be
assessed against two equally weighted comparator groups,
namely the FTSE 100 and a bespoke group of sectoral peers.
2. Increase in shareholding requirements
It is proposed that shareholding requirements for our Executive
Directors are increased materially to reflect higher LTIP awards,
as and when these are made. The CEO’s requirement will
increase proportionately from 400% to 450% of salary, while
that of other Executive Directors will increase proportionately
from 200% to 350% of salary, in line with the level of LTIP awards
actually granted.
Governance Entain plc | Annual Report 2022 Overview
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119
3. Introduction of a cash allowance in lieu of pension provision
2022 incentive outcomes
Finally, we are making an administrative change to our pension
provision to allow Executive Directors to opt to receive a cash
allowance in lieu of participating in Entain’s pension plans.
The level of pension plan contribution is already aligned with that
available to the wider workforce in the relevant jurisdiction, and the
value of the cash allowance will likewise be aligned with that level
of contribution.
The full Remuneration Policy can be found on pages 135 to 145.
Wider workforce
The Committee is very mindful of Entain’s responsibility as an
employer, particularly in the current circumstances. On behalf of
the Committee, I would like to thank all our colleagues for their
continued outstanding efforts during difficult economic times.
The resilience shown is a testament to the strength of talent that
we have at Entain and the determination of our teams to deliver the
very best for Entain and our customers.
From a pay perspective, we have taken several steps to try to most
effectively support our colleagues at this time:
The salary review for 2023 has been structured such that our
lower-paid employees typically receive higher percentage
increases than those at more senior/higher-paid levels.
We put in place a specific support package for our UK Retail and
Stadia colleagues, with all colleagues receiving a £300 one-off
payment in October 2022 (with the Company meeting the tax
liability to ensure that colleagues received the full amount).
From 1 January 2023, the minimum hourly pay rate for our
UK Retail and Stadia colleagues has been increased by 9% to
£10.90.
2022 annual bonus
60% of the annual bonus for 2022 was based on Group operating
profit. In assessing the underlying Group operating profit outcome,
the Committee was mindful that there were several factors that
were not included in the budget when the targets were set, which
impacted performance both positively and negatively during 2022.
In particular, the Committee excluded the net benefit of acquisitions
during the year as well as the impact of unbudgeted changes in
regulation that have affected several of our markets during 2022.
These adjustments led to a formulaic outcome for this metric of
48% of maximum.
Our online NGR performance for 2022, which represented 20%
of the annual bonus, failed to meet the threshold level of the very
stretching performance condition that had been set, and so no
payout will be made against this metric.
The remaining 20% of our annual bonus for 2022 was based on
non-financial metrics; 15% relating to safer betting and gaming
and 5% to our customer. The Committee is pleased that excellent
progress continued to be made in both of these areas, resulting in a
full payout on both of these metrics.
The Committee is delighted with the commitment and hard work
shown by all our colleagues this year, and considers that the
final outcome of 48.8% of maximum for the Executive Directors
is fair and reflective of Entain’s overall performance during 2022.
Further details can be found on page 147.
2020 LTIP
During 2022, our performance continued the strong trajectory
which we have shown over the last few years. Robust EPS
growth over the period 2020–22, coupled with significant TSR
outperformance of the FTSE 51-150 comparator group, and strong
TSR performance relative to our industry peers led to the vesting of
the 2020 LTIP award at 80.7% of maximum.
In considering the outcome of the EPS element of the 2020 LTIP,
the Committee noted several items that impacted EPS over the
performance period, both positively and negatively, that were not
foreseen when targets were set. In assessing the EPS outcome,
the Committee excluded the net benefit of acquisitions, furlough
payments and the impact of unbudgeted changes in regulation.
A de minimis limit was applied to the latter to ensure that only
material unbudgeted headwinds were considered.
Finally, the Committee considered whether the formulaic outcome
was appropriate in the wider business context over the three-year
performance period.
The Committee acknowledged the settlement that was reached
with the UK Gambling Commission in August 2022 and that this
related to a period of time covered by the performance period of
the LTIP. As a consequence, the Committee felt it was appropriate
to exercise discretion over the level of vesting of the LTIP and so
reduced the formulaic outcome by five percentage points.
The Committee also reviewed the 2020 LTIP to ascertain whether
participants would benefit from windfall gains. Given the
circumstances and share price at the time the award was granted,
the Committee was comfortable that this was not the case.
The Committee considers that the adjusted outcome of 80.7% of
maximum is a fair reflection of Entain’s performance over the three
years ended 31 December 2022. More detail on the LTIP outturn
can be found on page 148.
Entain plc | Annual Report 2022 120
Directors’ Remuneration Report continued
Looking ahead to 2023
Directors’ salaries
The Committee reviewed the salaries of the Executive Directors
in December 2022 and approved increases of 3%. In line with
the approach taken throughout the organisation, these increases
were below the overall salary review budget of 4% for the UK
and Gibraltar (excluding the 9% increase awarded to our UK
Retail colleagues), which was targeted towards our lower paid
employees. As a result of this review, the salaries for the Executive
Directors from 1 January 2023 will be:
Conclusion
Entain responded strongly to the ongoing challenging external
circumstances in 2022 and continued to perform strongly,
delivering robust and sustainable performance. The Committee
considers that the decisions it has made during the year align with
our principles of fairness and transparency, while continuing to
support the Group’s ambitious growth strategy.
I hope that you find the report clear and informative and look
forward to your support at the forthcoming AGM.
Stella David
Chair of the Remuneration Committee
9 March 2023
CEO: £844,600
CFO: £554,300
CGO: £422,300
Annual bonus
The Committee has reviewed the structure and metrics for the
annual bonus and concluded that these remain fit for purpose,
subject to one amendment. In order to reflect the importance of
our US joint venture and our Retail business to the future value of
Entain, the current online NGR metric will be updated to be Group
NGR including the NGR performance of BetMGM. No other changes
are proposed for 2023.
Long-Term Incentive Plan
Awards are expected to be made shortly after the 2023 AGM,
at the increased opportunities available under the new Policy.
The Committee considers that relative TSR remains the most
appropriate performance metric for the 2023 award given the
fast-changing external environment in which Entain operates,
and ensures a fundamental alignment with the interests of our
shareholders. The comparator groups will remain unchanged (FTSE
100 and a bespoke peer group) as they continue to represent the
most appropriate market reference points.
Governance Entain plc | Annual Report 2022 Overview
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121
The Remuneration Committee
Role of the Committee
The Committee oversees the Company’s overall remuneration
strategy to ensure it is aligned to the Company’s purpose and
values and is linked to the successful delivery of the Company’s
long-term strategy. The Committee has delegated responsibility
for designing and determining remuneration for the Chair
of the Board, the Executive Directors and senior executive
management. It also reviews the remuneration of the wider
workforce and related policies and the alignment of incentives
and rewards with culture, taking these factors into account
when setting the remuneration policy for the executive team.
Committee membership and attendance during 2022
Member
Mark Gregory1
Stella David
Vicky Jarman2
Virginia McDowell
Number of
meetings
attended
Number of
meetings
eligible to
attend
9
9
9
9
9
9
9
9
1. Mark Gregory was Chair of the Committee until he resigned from the Board
on 17 February 2023.
2. Vicky Jarman resigned from the Board on 17 February 2023.
During the year, there were six scheduled Committee meetings and
three ad-hoc meetings. There will be six scheduled meetings in
2023, with ad-hoc meetings as required.
None of the Committee members or attendees are 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
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.
Key areas of Remuneration Committee focus in 2022
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 2021 UK Gender Pay
Gap Report
Approval of the launch of the 2022 ShareSave
Executive and senior management remuneration
Determination of the payouts from the 2021 annual
bonus plan and the 2019 LTIP award
Approval of the 2022 annual bonus plan and 2022
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 2023 annual
bonus plan and 2023 LTIP
Committee governance
Approval of the 2021 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 2022 AGM
Review of the existing Directors’ Remuneration
Policy including conducting a consultation with our
largest shareholders
Entain plc | Annual Report 2022 122
Directors’ Remuneration Report continued
Remuneration Committee evaluation
The performance of the Remuneration Committee was assessed as a part of the Board Review, which this year was undertaken through
online surveys administered and reviewed by external facilitator Linstock.
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 metrics used to determine variable pay.
The process to review and shape a new Remuneration Policy.
The level of focus on wider workforce pay policy, especially when determining executive remuneration.
The review concluded that the Committee had worked effectively during the year, with positive feedback for the performance of the
Committee Chairman. The Committee discussed the results of the evaluation in private session and agreed that it would continue to
focus on the remuneration strategy for the wider workforce and how remuneration structures could enable Entain to attract and retain
global talent.
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 2022 were £132,350 (2021: £141,500). 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 Freshfields.
Shareholder voting and consideration of shareholder views
The 2021 Annual Statement from the Remuneration Committee Chair and the Annual Report on Remuneration were subject to an
advisory vote at the AGM on 24 June 2022. 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
24 June 2022 444,888,475
98.5%
6,914,494
Remuneration Policy
24 June 2020 458,789,615
95.0%
24,425,820
1.5%
5.0%
4,335,764
596,332
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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.
Year 1
Year 2
Year 3
Year 4
Year 5
Fixed
Pay
Base salary
Benefits
Pension
Total
pay
Annual
Bonus
One-year performance
period
Key performance
metrics
Malus provisions
apply
Three-year deferral period
No further performance conditions
Clawback provisions apply
Three-year performance period
LTIP
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
2022 – Executive Directors’ remuneration
The full explanatory notes for each element of remuneration are detailed on pages 146 to 149 in the Annual Report on Remuneration.
£000s
Base Salary
Benefits
Pension
Jette Nygaard-Andersen (CEO)
Rob Wood (CFO & Deputy CEO)
Robert Hoskin (Chief Governance Officer)
820
538
410
36
15
5
49
25
–
Annual
Bonus
1,000
525
400
LTIP
–
1,432
1,247
Total
1,905
2,535
2,062
Entain plc | Annual Report 2022 124
Directors’ Remuneration Report continued
2022 Incentive outcomes
The full explanatory notes for the annual bonus and LTIP outcomes are detailed on pages 147 to 149 in the Annual Report
on Remuneration.
Underlying
Group
Operating
Profit (60%)
Outcome
-1%
Growth in
Online NGR
(20%)
2022
Annual
Bonus
Safer Betting
and Gaming
(15%)
Customer
(5%)
Total
payout
Cumulative
EPS (33.3%)
Relative TSR
vs. FTSE 51-
150 (33.3%)
2020-
22 LTIP
Relative TSR
vs. Bespoke
peer group
(33.3%)
Discretionary
adjustment1
Total
payout
Threshold
£731.8m
Outcome
£749.1m
Target
£750.6m
Stretch
£788.1m
Threshold
+7%
Target
+10%
Stretch
+13%
ESG Committee assessment of performance
Threshold
NPS score: 7.0
Target
NPS score: 7.5
Outcome
NPS score: 8.0
Stretch
NPS score: 8.0
Threshold
267p
Stretch
295p
Outcome
301.1p
48.0% of
maximum
0% of
maximum
100% of
maximum
100% of
maximum
48.8% of
maximum
100% of
maximum
Threshold
Median: -5.1%
Stretch
Upper quartile: 20.7%
Outcome
57.3%
100% of
maximum
Threshold
Median: 37.2%
Outcome
57.3%
Stretch
Upper quartile: 84.1%
57.1% of
maximum
(5.0)%
80.7% of
maximum
1. Relating to the settlement with the UK Gambling Commission – see page 148 for details.
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Implementation of the Remuneration Policy for Executive Directors
The tables below illustrate the balance of pay and time period of each element of the Policy for Executive Directors and summarise how
the Committee applied the Policy in 2022, together with details of how the Committee intends to implement the new Policy in 2023.
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 2022
How we plan to implement
the Policy in 2023
Salaries for Executive
Executive Directors’ salaries
Salary increases of 3% for the
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, or may receive
a cash allowance in lieu of a
company contribution
from 1 January 2022:
Executive Directors
– CEO – £820,000
– CFO & Deputy CEO –
£538,125
– CGO – £410,000
From 1 January 2023,
Executive Director salaries
will be:
– CEO – £844,600
– CFO & Deputy CEO –
£554,300
– CGO – £422,300
Normal company benefit
provision
Normal company
benefit provision
CEO – 6% of salary cash
Executive Directors may
allowance1
CFO & Deputy CEO – 4.5% of
salary company contribution2
CGO – Opted out of the plan
receive a cash allowance in
lieu of contributions to the
pension plan
Maximum annual incentive
Maximum opportunities:
No change to the maximum
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 metrics
(as a percentage of total):
– Underlying Group Operating
Profit (pre US joint venture)
(60%)
– Growth in Online NGR (25%)
– Safer Betting and Gaming
(15%)
– Customer (5%)
Executive Directors
awarded bonuses of
48.8% of their maximum
opportunity. See page 147 for
further information
bonus opportunity or payment
mechanisms of bonuses
Performance metrics (as a
percentage of total):
– Underlying Group Operating
Profit (pre US joint venture)
(60%)
– Growth in NGR (including
US joint venture) (20%)
– Safer Betting and Gaming
(15%)
– Customer (5%)
Targets are considered
commercially sensitive,
but will be disclosed
in the 2023 Directors’
Remuneration Report
1. A cash allowance was approved by the Remuneration Committee for the CEO as she is a Danish tax resident and therefore not able to participate in any of the Group’s existing
pension arrangements. The quantum is aligned to the maximum company pension contribution available to employees in the UK.
2. The CFO is a member of the UK employee pension plan on the same basis as other employees, and has elected to participate at the level that provides a Company contribution
of 4.5% of salary.
Entain plc | Annual Report 2022 126
Directors’ Remuneration Report continued
Operation
How we implemented the
Policy in 2022
How we plan to implement
the Policy in 2023
Grant levels for 2022 awards:
Maximum LTIP opportunities
– CEO – 300%
– Other Executive Directors –
increased to:
– CEO – 450%
250%
– Other Executive Directors –
Performance conditions:
– Relative TSR vs. the FTSE
400%
Performance conditions:
100 (50%)
– Relative TSR vs. the FTSE
– Relative TSR vs. a bespoke
100 (50%)
group of sectoral peers (50%)
– Relative TSR vs. a bespoke
The performance period for
the 2020 LTIP ended in the
year and 80.7% of this award
will vest. See page 148 for
further information
group of sectoral peers (50%)
See page 128 for details on
LTIP awards to be granted
in 2023
Maximum award of 450%
of base salary for the CEO
and 400% of base salary for
other Executive Directors
Threshold performance
results in 16.7% of the award
vesting where maximum
award levels are granted
Vesting is on a straight-line
basis between threshold
and maximum
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
Executive Directors are
Shareholding guidelines:
Shareholding guidelines
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
– CEO – 400%
– Other Executive Directors –
increased to a maximum of:
– CEO – 450%
200%
– Other Executive Directors –
The Executive Directors’ share
interests as at 31 December
2022 are detailed on page 150
350%
on a proportionate basis as and
when LTIP awards are granted
at increased levels under the
new Policy
Element
LTIP
To incentivise the execution
of the long-term business
plan and the delivery of
long-term sustainable value
for shareholders
Up to 450% 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
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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 21.
Element of reward
Link to reward
Strategic pillars
Growth
Sustainability
Bonus
LTIP
Underlying Group operating profit
Growth in 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 made in June 2022
Market-related benefits package
Employee recognition
Learning and development opportunities
Entain plc | Annual Report 2022 128
Directors’ Remuneration Report continued
2023 Incentive plan metrics
Annual bonus
What ESG-related metrics will be included in the annual
bonus for 2023?
The Committee is mindful of the ongoing focus on ESG
performance and is pleased with the continued evolution of our
annual bonus metrics which highlight how we are working to
embed sustainability across all aspects of the business. As for
2022, we will continue to include two non-financial metrics in our
annual bonus. 15% of the bonus will be based on a safer betting
and gaming metric and 5% on a customer metric.
Why does the Committee think it is important to include
a customer and a safer betting and gaming metric in the
annual bonus?
In order to have a sustainable business, we have to put the
customer at the heart of everything we do. This starts with
continuously enhancing and personalising the protection of our
customers but also requires us to provide great products and
customer service. Including these metrics in our annual bonus
provides balance and reinforces the importance of these to all
our colleagues.
How will the customer metric work?
We will again 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 metric
that companies use to track promoters and detractors, producing
a clear measure of an organisation’s performance through its
customers’ eyes.
As a metric 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 safer betting and gaming metric work
for 2023?
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 2023:
Half of the total will relate to the UK market. We will target
the usage of our active account management tools amongst
risk assessed online customers and the implementation of our
Advanced Responsibility and Care™ (“ARC™”) model into our
UK Retail business.
The other half will relate to markets outside the UK. Here we
will target the deployment of ARC™ across further markets.
In addition, to reach the threshold level for payout under this
metric, 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 2022 target and outturn of the safer
betting and gaming metric can be found on page 147.
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 is 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 2023 annual bonus be determined?
The remaining 80% of the annual bonus will be based on financial
metrics that will be split between underlying Group operating
profit (60%) and growth in NGR (20%). These weightings are the
same as for the 2022 plan. To reflect the importance of our US
joint venture and Retail business to the future value of Entain, the
online NGR metric has been updated to be Group NGR including
the NGR of BetMGM.
The targets and respective outcomes of the 2023 metrics will be
reported in next year’s Directors’ Remuneration Report.
2023 LTIP
What metrics will be used for the 2023 LTIP?
In determining the LTIP performance metrics for the 2023 award,
the Committee has again considered the difficulty in setting
appropriately stretching but incentivising financial targets,
given the fast-changing external environment in which we
currently operate. The Committee has concluded that it remains
appropriate to continue to base our 2023 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 2023, 50% of the LTIP awards will be based on TSR
performance relative to the FTSE 100 and 50% on performance
relative to an unchanged 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.
What are the targets for the 2023 LTIP?
The targets and vesting schedule for the 2023 LTIP awards,
assuming these are granted at the maximum available under the
new Policy, are set out below.
Metric
Weighting
TSR vs. FTSE 100
TSR vs. peer group
50%
50%
Threshold1
(16.7% vesting)
Maximum1
(100% vesting)
Median 85th percentile
Median 85th percentile
1. Straight-line vesting between threshold and maximum.
If lower levels of LTIP awards are granted, then the percentage
of vesting at threshold, and the performance required for
maximum vesting, will be revised on a proportionate basis.
For awards made at the level available under the existing Policy,
in line with current practice, threshold vesting will be at 25% of
maximum and maximum vesting will require performance at the
75th percentile.
The Committee will assess the value of the 2023 LTIP awards at
vesting and will ensure that the final outturn reflects all relevant
factors, including consideration of underlying performance.
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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 63 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 indicators 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 that 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.
To reflect the importance of our safer betting and gaming activity and our customers to the sustainability
of Entain, metrics relating to both are included in our annual bonus plan. This demonstrates 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 2022 130
Directors’ Remuneration Report continued
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 as 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.
Subject to local legislation, Executive Directors
are eligible to participate in the pension
arrangement in their country of employment 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 typically
aligned to those of the Executive Directors
and senior management, although depending
on role, greater emphasis may be placed on
business unit performance.
We operate local incentive arrangements
where appropriate to align with market
practice.
A proportion of this population is eligible to
be considered for LTIP or Restricted Stock
Awards, which vest after three years.
Malus and clawback provisions apply.
Employees have the chance to participate
in the Group’s all-employee ShareSave plan.
An award of free shares was made to all
eligible employees in 2022, in recognition of
the Group’s strong performance in 2021.
management participate in the same Group
annual bonus plan as eligible members of the
global workforce.
Half of any award to an Executive Director is
subject to deferral into shares for three years.
Malus and clawback provisions apply.
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 2022: page 121
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Consideration of colleague and stakeholder views
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 on Group-wide all-colleague
remuneration arrangements. During the year, this included
briefings on the programme of support for UK Retail colleagues,
our ShareSave plan and the project to implement a global job
architecture framework.
We have several 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. In addition, Virginia
McDowell, in her role as Designated Workforce Director, provides
the Committee with updates on colleague views on remuneration.
Through the Board the Committee receives valuable insight as
to general colleague views on remuneration, via the results of
our Global “Your voice” Survey, including those related to pay
and benefits. See pages 98 to 99 for more detail on our Board
Engagement activities.
Mark Gregory, the former Remuneration Committee Chair,
participated in Entain’s Employee Forum AGM, held virtually
in January 2023. This event brought together colleague
representatives from across the Group, and gave them the
opportunity to engage with Virginia and Mark on a wide range
of topics. As with the similar meeting held last year, an open
dialogue was had and our colleague representatives provided
very informative input on their experiences and suggestions.
The Committee members are grateful for the active participation
of these colleagues and the insights received and thank them for
their input.
All employee remuneration and actions in response to
cost-of-living pressures
The Committee is mindful of Entain’s responsibility as an
employer and the focus on this is heightened in the current
difficult economic environment which is being experienced by
our colleagues all over the world. The Committee was pleased
that we were able to implement a number of all-colleague
remuneration initiatives during 2022:
Budgets were set for our 2023 annual salary review taking
into account the current inflationary context being experienced
by our colleagues globally. Acknowledging that the impact
of inflation disproportionately impacts the lower paid, these
budgets were directed towards providing greater percentage
increases to our lower paid colleagues.
For our colleagues in UK Retail and Stadia, further specific
actions were taken. Firstly, in October, all colleagues received
a £300 one-off payment (with the company meeting the tax
liability to ensure that colleagues received the full amount).
Secondly, with effect from 1 January 2023, our minimum
hourly rate of pay has been increased to £10.90 (from £10.00)
which is in line with that recommended by the Real Living
Wage Foundation.
All of our colleagues have the opportunity to share in the value
they create. A second cycle of our all-employee ShareSave
plan was launched in April 2022 to colleagues in 23 countries.
14% of our people elected to participate, giving them the
opportunity to purchase Entain shares at an option price of
£13.33. We intend to offer ShareSave again in 2023.
In June 2022, a free share award of £300 of Entain shares
was made to all eligible employees. This included colleagues
across the entire Group, including those working in our
recent acquisitions.
All of these initiatives acknowledge the importance of our
colleagues in delivering the Group’s objectives and the Committee
looks forward to continuing the dialogue with our people in the
coming year.
Entain plc | Annual Report 2022 132
Directors’ Remuneration Report continued
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 CEO 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 CEO’s 2022 pay was 87 times the median (50th percentile).
This is a fall from 2021 which is largely attributable to the lower
pay of the CEO in respect of 2022. Our UK employee population is
predominantly made up of colleagues working in our retail estate
and the Committee considers that this ratio is not out of line with
that at other retail organisations.
Salaries are typically reviewed in January each year. However,
the implementation date of the Group-wide review due in January
2022 was brought forward to 1 October 2021, excluding Executive
Directors and Executive Committee members. For 2023, our salary
review reverted to the normal cycle and was implemented on
1 January 2023.
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.
Method
Option A
Option A
Option A
Option A
25th
percentile
50th
percentile
75th
percentile
101
139
106
278
87
122
95
229
73
98
75
170
Significant distributions
2022
2021 % change
Staff costs (£m)1
654.5
579.3
Distributions to shareholders (£m)2
50.0
–
13%
n/a
1. The increase in staff costs is due to increased employee numbers in 2022 as a
result of acquisitions, the introduction of our Free Share plan, the extension of our
ShareSave plan and no receipt of furlough payments during 2022, which partially
offset the charge in 2021.
2. No dividends were paid during 2021.
2022
2021
2020
2019
Gender pay gap reporting
2022 is the fifth year in which we have published our UK gender
pay gap results. Our median hourly pay difference between
male and female colleagues in the UK is 3.2% (2021: 5.3%),
which compares favourably with the UK median pay gap for all
employees of 14.9% (source: Office for National Statistics, October
2022). Our median bonus pay gap is 38.7% (2021: 59.6%).
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 52.
Our gender pay gap report for the year ended 5 April 2022,
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.
UK colleagues – pay element
Salary
25th
percentile
50th
percentile
75th
percentile
15,752
16,990
18,382
Total remuneration
18,917
21,988
26,208
We would highlight the following in terms of the approach taken:
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
2022. Salary excludes any statutory payments such as
maternity and sick pay; these items are reflected in the Total
remuneration figures.
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 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.
We successfully launched the second cycle of our all-employee
ShareSave plan in 2022 and another cycle will be offered in April
2023. In June 2022, we also made an award of free shares with a
value of £300 to all employees. These shares vest in June 2024,
subject to continued employment.
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.
Governance Entain plc | Annual Report 2022 Overview
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Financial statements
133
Summary of performance
The chart below shows the value of £100 invested in Entain 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 2022.
£100 invested in Entain on 1 February 2016 would have been worth £329 at 31 December 2022 compared with £161 if invested in the
FTSE 100 and £82 if invested in the FTSE 350 Travel and Leisure Index.
Over the three-year period 1 January 2020 to 31 December 2022 (the period covered by the 2020 LTIP) the total shareholder return
(“TSR”) of Entain shares was +50% compared with +10% for the FTSE 100 and -39% 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
31/12/22
Entain
FTSE 100
FTSE 350 Travel & Leisure Index
Source: Datastream
Entain plc | Annual Report 2022
134
Directors’ Remuneration Report continued
Summary of CEO remuneration outcomes: 2015–2022
Year
CEO
Single figure of total
remuneration4
Annual bonus payout5
(% of maximum)
LTIP vesting
(% of maximum)
Legacy award vesting
(% of maximum)
2022
2021
2020
2019
2018
2017
2016
2015
J Nygaard-
Andersen
J Nygaard-
Andersen1
S Segev2
S Segev2 K Alexander3 K Alexander K Alexander K Alexander K Alexander K Alexander
£1.91m £2.53m £0.04m £0.30m £1.68m £5.23m £19.10m £18.21m £17.83m £3.41m
48.8%
100%
–
–
–
–
–
–
–
–
–
–
–
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 2020 to 2022, 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.
2022
2021
2020
Base
salary/
fees
Benefits
Annual
bonus
Base
salary/
fees
Benefits
Annual
bonus
Base
salary/
fees
Benefits
Annual
bonus
–
–
–
–
–
3.6%
1.4% (49.5)%
27.2%
2.2%
2.5% (15.1)% (50.0)%
–
0%
(1.2)%
–
–
–
0%
11.3%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
5.3%
1.9%
–
–
–
5.4%
–
–
–
–
–
–
–
–
–
–
–
–
n/a
–
–
–
–
–
–
–
–
–
–
–
–
–
(3.8)%
–
–
–
(8.5)%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Executive Directors
J Nygaard-Andersen1
R Wood2
R Hoskin3
Non-Executive Directors4
B Gibson5,6
P Bouchut6,7
S David8
M Gregory8
V Jarman8
V McDowell6
D Satz9
R Welde10
All colleagues11
(0.1)% (16.5)% (50.8)%
0.1%
1.9%
132.4%
3.5%
(1.4)%
(53.1)%
1.
Jette Nygaard-Andersen joined the Board in November 2019 and was appointed CEO on 21 January 2021. As she was not in either role for a full 12 months in either 2020 or
2021, 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, as an Executive Director,
Rob was subject to a 20% reduction in salary for three months and 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 joined the Board on 1 January 2021, therefore no comparison is shown for 2020 or 2021.
4. Non-Executive Directors receive fees only and do not receive any additional benefits or participate in a bonus arrangement. There were no increases to Non-Executive
Directors’ fees in 2022.
In 2020, Barry Gibson, Pierre Bouchut and Virginia McDowell were all subject to a 20% reduction in fees for three months.
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 for 2020.
6.
7. The fees for Pierre Bouchut are denominated in Euros and the percentage change in fees shown for him for 2022 is as a result of foreign exchange movements.
8. Stella David, Mark Gregory and Vicky Jarman joined the Board during 2021, therefore no comparisons are shown.
9. David Satz joined the Board in 2020, therefore no comparison is shown for 2020 or 2021. David’s fees are denominated in US Dollars and the percentage change in fees
shown for him for 2022 is as a result of foreign exchange movements.
10. Rahul Welde joined the Board during 2022, therefore no comparisons are shown.
11. 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, 2020/21 and 2021/22. The fall in bonus for 2022 reflects an overall outturn of around target compared
to payout at maximum in respect of 2021.
Governance Entain plc | Annual Report 2022
Overview
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Financial statements
135
Directors’ Remuneration Policy
The following section sets out our Directors’ Remuneration Policy.
This Policy will be submitted as an advisory vote to shareholders
at the 2023 AGM and will apply to payments made on or after
25 April 2023.
As an Isle of Man incorporated company, Entain is not subject
to the UK remuneration reporting regulations which apply to
UK-incorporated companies. Nevertheless, the Committee
recognises the importance of effective corporate governance and
is firmly committed to UK best practice. The Remuneration Policy
has therefore been prepared in accordance with the provisions
of the UK’s Companies Act 2006 and 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.
Changes from previous policy
The significant changes from the previous policy are summarised
on the right. The rationale for these is set out in the Chair’s Annual
Statement on page 118.
Increase in the maximum annual LTIP opportunities as follows:
– CEO: 450% (from 300%)
– Other Executive Directors: 400% (from 250%).
Reduction in the proportion of LTIP awards that vest for
threshold performance to 16.7% (from 25%), where awards are
made at the new maximum levels.
Increase in shareholding requirements, where awards are made
at the new maximum levels, to:
– CEO: 450% (from 400%)
– Other Executive Directors: 350% (from 200%).
Introduction of a cash allowance in lieu of pension provision.
Provision for our Executive Directors to participate in our
all-employee share plans on the same terms as other
eligible employees.
In designing the new Policy, the Committee followed a robust
process which included discussions on the content of the Policy
at five Remuneration Committee meetings. The Committee
considered input from management and our independent advisers
and carried out an extensive consultation exercise to gather the
views of the Company’s major shareholders.
Directors’ Remuneration Policy
Salary
Element and
strategic link
Operation
To provide competitive fixed remuneration that will attract and retain appropriate talent.
Reflects an individual’s responsibilities, experience and role.
An Executive Director’s basic salary is set on appointment and is generally reviewed annually or when there is a
change in position or responsibility.
When determining an appropriate level of salary, the Committee considers:
remuneration practices within the Group including salary budgets;
the general performance of the Group;
salaries paid by companies of a similar size and complexity and those operating in similar markets;
any change in scope, role and responsibilities;
the experience of the individual; and
the economic environment.
Maximum
There is no maximum level of salary increase. Nevertheless, salary increases for Executive Directors will
ordinarily be no higher than the typical level of increase across the wider workforce.
Higher increases may be made under certain circumstances such as:
an increase in the scope and/or responsibility of the individual’s role on either a permanent or
temporary basis;
the development of the individual within their role; or
where an Executive Director has been appointed to the Board at a lower than typical level of salary, for
example to reflect a lower level of experience, larger increases may be awarded to move them closer to the
market rate as their experience develops.
Performance targets
and recovery
provisions
A broad assessment of individual and business performance is used as part of the salary review.
No recovery provisions apply.
Entain plc | Annual Report 2022 136
Directors’ Remuneration Report continued
Benefits
Element and
strategic link
Operation
To provide competitive benefits and to attract and retain high calibre employees.
The Executive Directors may receive benefits including, but not limited to, private health insurance, life
insurance and car and accommodation allowances.
Executive Directors may also participate in any all-employee share plans that may be operated by the Group
from time to time on the same terms as other employees.
The Committee recognises the need to maintain suitable flexibility in the benefits provided to ensure it is
able to support the objective of attracting and retaining personnel in order to deliver the Group strategy.
Additional benefits such as relocation allowances on recruitment may therefore be offered.
Maximum
The maximum is the cost of providing the relevant benefits.
The maximum award under any all-employee share plan is in line with the maximum within the relevant plan
rules and as applicable to other participants. Awards would also be subject to any prevailing statutory limits.
Performance targets
and recovery
provisions
No performance or recovery provisions apply.
Pensions
Element and
strategic link
Operation
Maximum
To provide an opportunity for retirement planning.
Executive Directors are eligible to participate in the Company provided pension arrangement in place in
their country of employment, on the same basis as other eligible employees and in line with local statutory
requirements. If adversely impacted by local tax legislation, an individual may receive a cash allowance instead
of the company contribution into the pension plan.
The maximum Company contribution is currently 6% of salary in the UK and Gibraltar (where our current
Executive Directors are employed). This may be reviewed if required to meet any changes in statutory
requirements, or in line with changes to contribution rates for other employees.
Performance targets
and recovery
provisions
No performance or recovery provisions apply.
Governance Entain plc | Annual Report 2022 Overview
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Governance
Financial statements
137
Annual and Deferred Bonus Plan (the “ADBP”)
Element and
strategic link
To incentivise the achievement of key financial and non-financial performance targets in line with corporate
strategy over a one-year period.
Operation
Awards made annually based on the achievement of a combination of financial and non-financial
performance metrics.
50% of the bonus will be paid in cash following the end of the financial year.
50% of the bonus will be deferred into shares which will vest at the end of three years subject to
continued employment.
Participants may be entitled to dividends or dividend equivalents representing the dividends paid during the
deferral period on the deferred shares.
Maximum
Maximum annual incentive opportunity of 250% of salary for the CEO and 200% of salary for other
Executive Directors.
Threshold performance is equal to 25% of maximum opportunity.
Target performance is equal to 50% of the maximum opportunity.
Performance targets
and recovery
provisions
Performance metrics and targets will be set by the Committee annually based on a range of financial
and non-financial metrics.
The specific metrics, targets and weightings may vary from year to year in order to align with the Company’s
strategy over each year. However, at least 50% of the bonus will be linked to financial metrics.
Operational, strategic and personal objectives, where measurement is qualitative, will be limited to a maximum
weighting of 30%.
The Committee is of the opinion that, given the commercial sensitivity arising in relation to the detailed financial
targets used for the bonus, disclosing precise targets for the Plan in advance would not be in shareholder
interests. Except in circumstances where elements remain commercially sensitive, targets, performance
achieved and awards made will be published at the end of the performance period so shareholders can fully
assess the basis for any payouts.
The Committee retains full discretion to:
change the performance metrics and targets and the weighting attached to these part-way through
a performance year if there is a significant and material event which causes the Committee to believe the
original metrics, weightings and targets are no longer appropriate; and
make downward or upward adjustments to the amount of bonus earned resulting from the application of the
performance conditions, if the Committee believes that the bonus outcomes are not appropriate.
The use of and rationale for any application of discretion by the Committee will be fully disclosed in the following
year’s Remuneration Report.
Malus and clawback provisions apply. See further details on page 140.
Entain plc | Annual Report 2022 138
Directors’ Remuneration Report continued
Long Term Incentive Plan (the “LTIP”)
Element and
strategic link
To incentivise the execution of the long-term business plan and the delivery of long-term sustainable value
for shareholders.
Operation
Annual awards of performance shares in the form of conditional awards or nil-cost options.
Awards typically vest three years from the date of grant subject to the achievement of performance conditions.
A two-year holding period will apply following the three-year vesting period for awards granted to the
Executive Directors.
Upon vesting, sufficient shares can be sold to pay tax.
Participants may be entitled to dividends or dividend equivalents representing the dividends paid during
the performance period on vested awards.
Maximum
Maximum opportunity of 450% of base salary for the CEO and 400% of base salary for other
Executive Directors.
Threshold performance results in 16.7% of the award vesting, where awards are made at the maximum levels.
Where awards are made at the maximum level under the previous Policy (300% for the CEO and 250% for other
Executive Directors), 25% of the award will vest at threshold performance. Where awards are made between
these levels, threshold vesting will be set at an appropriate level so that remuneration at threshold performance
is broadly unchanged.
Below threshold performance results in zero vesting.
Performance targets
and recovery
provisions
Awards vest based on performance against stretching targets, measured over a three-year
performance period.
The Committee will review weightings and targets for each grant to ensure they remain appropriate.
The Committee may change the balance of the metrics, or use different metrics for subsequent awards,
as appropriate.
In exceptional circumstances the Committee retains the discretion to:
change the performance metrics and targets and the weighting attached to these part-way through
a performance period if there is a significant and material event which causes the Committee to believe
the original metrics, weightings and targets are no longer appropriate;
make downward or upward adjustments to the level of vesting resulting from the application of the
performance conditions, if the Committee believes that the vesting outcomes are not appropriate.
The use and rationale for any application of discretion by the Committee will be fully disclosed in the following
year’s Remuneration Report.
Malus and clawback provisions apply. See further details on page 140.
Governance Entain plc | Annual Report 2022 Overview
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Governance
Financial statements
139
Shareholding Guidelines (within employment)
Element and
strategic link
Operation
To ensure that Executive Directors’ interests are aligned with those of shareholders over a longer time horizon.
Formal shareholding requirements that encourage the Executive Directors to build up, over a five-year period,
and then subsequently hold, a shareholding equivalent to a percentage of base salary.
Adherence to these guidelines is a condition of continued participation in the equity incentive arrangements.
Executive Directors will be required to retain 50% of the post-tax amount of vested shares from the Company
incentive plans until the minimum shareholding requirement is met and maintained.
The Committee retains discretion to increase the minimum shareholding requirement.
Maximum
In line with the level of LTIP awards actually granted, the shareholding guidelines will increase proportionately:
for the CEO from 400% to 450% of salary
for other Executive Directors from 200% to 350% of salary.
Performance targets
and recovery
provisions
Not applicable.
Shareholding Guidelines (post-employment)
Element and
strategic link
To ensure long-term alignment between the interests of the Executive Directors and those of shareholders
through the operation of post-employment shareholding guidelines.
Operation
Executive Directors are normally expected to maintain a shareholding of 100% of their guideline (or their actual
shareholding at departure if lower) for two years following cessation of employment.
Shares purchased by the Executive Directors out of their own funds will not count towards these guidelines.
To support the implementation of this policy the Committee may 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.
Maximum
Not applicable.
Performance targets
and recovery
provisions
Not applicable.
Entain plc | Annual Report 2022 140
Directors’ Remuneration Report continued
Chairman and Non-Executive Director fees
Element and
strategic link
To ensure we are able to attract high calibre individuals and compensate appropriately for their experience
and knowledge.
Operation
Non-Executive Directors are paid an annual fee and additional fees for chairing a committee. They may also be
paid an additional fee, for example, for membership of committees although the Chairman would not receive
any additional fees for membership of committees.
Fees are generally reviewed annually based on equivalent roles in companies of a similar size and complexity
and those operating in similar markets.
The Company may provide the Chairman and Non-Executive Directors with tax advice and will pay reasonable
expenses incurred by them in carrying out their duties. The Company may settle any tax due in relation to
these items.
Non-Executive Directors do not participate in any variable remuneration or benefit arrangements.
Maximum
There is no maximum level of fee increase. However, the level of fee increase for the Non-Executive Directors
and the Chairman will normally be set taking account of any change in responsibility and the level of increases
across the wider workforce.
Performance targets
and recovery
provisions
Not applicable.
Discretion within the Directors’ Remuneration Policy
Malus and Clawback
The Committee has discretion in several areas of Policy as set out
in this report. In particular the Committee has unfettered discretion
under the terms of our incentive plans to adjust, upward or
downward, the formulaic outcome, where it considers that:
the outcome does not reflect the underlying financial or non-
financial performance of the participant or the Group over the
relevant period;
the outcome is not appropriate in the context of circumstances
that were unexpected or unforeseen at the award date or when
performance targets were set; and/or
there exists any other reason why an adjustment is appropriate.
In any case where discretion were applied, the Committee would
set out the rationale behind its decision at the relevant time.
The Committee may also exercise operational and administrative
discretions under relevant plan rules as set out in those rules.
In addition, for regulatory, exchange control, tax or administrative
purposes, or to take account of a change in legislation, the
Committee has the discretion to make minor amendments to the
Policy without obtaining shareholder approval.
Malus and clawback provisions apply to awards under the ADBP
and the LTIP. Trigger events include:
discovery of a material misstatement resulting in an adjustment
in the audited consolidated accounts of the Company or the
audited accounts of any Group Member; and/or
the assessment of any performance metric or target in respect of
a payment that was based on error, or inaccurate or misleading
information; and/or
the discovery that any information used to determine the
payment was based on error, or inaccurate or misleading
information; and/or
action or conduct of a participant which, in the reasonable
opinion of the Committee, amounts to fraud or gross misconduct;
and/or
events or behaviour of a participant have led to the censure
of a Group Member by a regulatory authority or have had
a significant detrimental impact on the reputation of any
Group Member provided that the Committee is satisfied that
the relevant participant was responsible for the censure or
reputational damage and that the censure or reputational
damage is attributable to him; and/or
a material corporate failure in any Group Member.
Malus will operate throughout the vesting periods. Clawback will
apply for two years following the vesting of nil cost options or
conditional awards.
The Committee believes that it has the necessary powers under
the rules of the LTIP and ADBP to enforce these provisions.
Governance Entain plc | Annual Report 2022 Overview
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Governance
Financial statements
141
Application of policy
As an Isle of Man incorporated company, Entain does not have the
benefit of the statutory protections afforded by the UK Companies
Act 2006 in relation to the remuneration reporting regime.
Accordingly, if there is any inconsistency between the Policy (as
approved by shareholders) and any contractual entitlement or
other right as a Director, the Company may be obliged to honour
that existing entitlement or right.
Comparison with other employees
All employees receive base salary and benefits appropriate to
their local market. For employees below Group Board level, Entain
operates discretionary bonus arrangements with opportunity
levels linked to seniority and role. Performance metrics under these
arrangements are broadly aligned with those for the Executive
Directors, although depending on role, there may be a greater
emphasis on business unit rather than group performance.
The LTIP is extended to a limited number of senior executives
with performance metrics and targets set in line with the Policy
table above. To assist in the retention of senior talent, awards of
Restricted Shares are made to a further select group of senior
employees. To facilitate wider share ownership among our
employees, we offer an all-employee share plan (“ShareSave”)
to the majority of our employees (where it is logistically viable
to do so) and made an award of free shares to all employees in
June 2022. Any differences in an individual’s reward package is
reflective of their location, seniority, role and level of responsibility.
Further details of how the Committee considers remuneration
arrangements for our Executive Directors in the context of pay
and conditions for our wider employees is provided on pages 130
to 132.
Reward scenarios
The charts below show an estimate of the remuneration that could be received by Executive Directors under the Policy set out in
this report.
£’000s
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
CEO
8,472
22%
6,842
56%
43%
3,886
49%
CFO
CGO
5,028
3,920
22%
2,257
57%
44%
3,805
2,961
22%
1,694
57%
44%
929
27%
31%
24%
100%
24%
14%
11%
49%
25%
26%
594
100%
28%
15%
22%
12%
427
100%
50%
25%
25%
29%
14%
22%
11%
Fixed
Bonus
LTIP
Share price growth
Minimum
Target
Maximum
Maximum
plus 50%
share price
growth
Minimum
Target
Maximum
Maximum
plus 50%
share price
growth
Minimum
Target
Maximum
Maximum
plus 50%
share price
growth
Assumptions used in determining the level of payout under given scenarios are as follows:
Element
Minimum
On-Target
Maximum
Fixed Elements
Annual Bonus Plan
LTIP
Nil
Nil
Base salary for 2023
Benefits and pension paid in 2022
50% of maximum payout:
100% of maximum payout:
CEO – 125% of salary
CEO – 250% of salary
CFO/CGO – 100% of salary
CFO/CGO – 200% of salary
50% of maximum vesting:
100% of maximum vesting:
CEO – 225% of salary
CEO – 450% of salary
CFO/CGO – 200% of salary
CFO/CGO – 400% of salary
The maximum plus share price growth column shows the additional value that could payout if the LTIP vests at maximum and share
price increases by 50%.
Entain plc | Annual Report 2022
142
Directors’ Remuneration Report continued
Approach to recruitment and promotions
When setting the remuneration for a new Executive Director, the Committee will consider the candidate’s existing remuneration, the
market rate for the role, and the need to pay no more than necessary to facilitate the recruitment. The remuneration package will
generally be set in line with the remuneration policy for existing Executive Directors. Full details are set out below.
Remuneration element
Recruitment policy
Salary, benefits and
pension
These will be set in line with the policy for existing Executive Directors.
Where the new Executive Director is required to relocate, the Company may provide relocation
support in accordance with its normal relocation package for other senior employees. The level of the
relocation package will be assessed on a case by case basis but may include, for example, a housing
allowance and school fees and reflect cost of living differences.
Annual bonus
The appointed Executive Director will be eligible to earn a discretionary annual bonus in accordance
with the rules and terms of the ADBP.
The maximum opportunity will be 250% of salary for a new CEO and 200% of salary for any other
Executive Director.
Long-term incentives
The appointed Executive Director will be eligible for performance-based equity awards in accordance
with the rules and terms of the LTIP.
The maximum opportunity will be 450% of base salary for a new CEO and 400% of salary for any
other Executive Director.
Maximum variable
remuneration
The maximum variable remuneration which may be granted is 700% of salary for a new CEO or 600%
of salary for any other Executive Director.
Buy-out awards
Where the Committee determines that the individual circumstances of recruitment justify the provision
of a buyout, the equivalent value of any incentives that will be forfeited on cessation of an Executive
Director’s previous employment (“lapsed value”) will be calculated taking into account the following:
the proportion of the performance period completed on the date of the Executive Director’s
cessation of employment;
the performance conditions attached to the vesting of these incentives and the likelihood of them
being satisfied; and
any other terms and conditions having a material effect on their value.
The Committee may then make a grant up to the value of the lapsed value, where possible, under the
Company’s incentive plans. To the extent that it is not possible or practical to provide the buyout within
the terms of the Company’s existing incentive plans, a bespoke arrangement may be used.
Governance Entain plc | Annual Report 2022 Overview
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143
Where an existing employee is promoted to the Board, the Policy set out above will apply from the date of promotion. Any existing
remuneration arrangements which fall outside of the Policy would be honoured and form part of the ongoing remuneration of
the employee.
The Company’s policy when setting fees for the appointment of new Non-Executive Directors is to apply the policy that applies to current
Non-Executive Directors.
Service contracts & letters of appointment
The Company’s policy is that Executive Directors have rolling contracts which are terminable by either party giving the other 12 months’
notice. The Chairman and Non-Executive Directors do not have service contracts but are engaged under letters of appointment. Non-
Executive Directors are appointed for an initial three-year term but are subject to annual re-election at the Company’s AGM. All service
contracts and letters of appointment are available for viewing at the Company’s registered office and at the AGM.
Director
J Nygaard-Andersen
R Wood
R Hoskin
B Gibson
P Bouchut
S David
V McDowell
D Satz
R Welde
Date appointed
21 January 2021
5 March 2019
1 January 2022
Arrangement
Service contract
Service contract
Service contract
4 November 2019
Letter of appointment
13 September 2018
Letter of appointment
4 March 2021
6 June 2018
Letter of appointment
Letter of appointment
22 October 2020
Letter of appointment
1 July 2022
Letter of appointment
Notice period
12 months
12 months
12 months
3 months
3 months
3 months
3 months
3 months
3 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.
Payment for loss of office
When determining any loss of office payment for a departing Executive Director, the Committee will always seek to minimise the cost
to the Company while complying with the contractual terms and seeking to reflect the circumstances of the departure. The Committee
reserves the right to make additional payments where such payments are made in good faith in discharge of an existing legal obligation
(or by way of damages for breach of such an obligation); or by way of settlement or compromise of any claim arising in connection with
the termination of an Executive Director’s office or employment.
If a contract is to be terminated, the Committee will determine such mitigation as it considers fair and reasonable in each case. There is no
agreement between the Company and its Executive Directors or employees, providing for compensation for loss of office or employment
that occurs because of a takeover bid. Service contracts do not contain liquidated damages clauses.
When determining the treatment of Company incentive plans upon cessation of employment, the Committee will consider the rationale
for the departure. An individual may be treated as a “good leaver” for these purposes if they leave by way of the following circumstances
– (i) death, (ii) injury, ill-health or disability, (iii) redundancy, (iv) retirement, (v) the employing company ceasing to be a Group company,
(vi) transfer of employment to a company which is not a Group company, and/or (vii) any other circumstances as determined by
the Committee.
A summary of the treatment of the various elements of remuneration on termination of employment is set out in the table below.
The treatment for a leaver who does not fall into the definition of a good leaver is described under the “Other leavers” sections.
Where discretion is available under the Policy, the Committee would consider exercising this only after taking into account the particular
circumstances of the departure and any other relevant business rationale. The Committee will explain any discretion used to shareholders
in the following Directors’ Remuneration Report.
Entain plc | Annual Report 2022 144
Directors’ Remuneration Report continued
Incentive plan
Treatment on Cessation of Employment
Treatment on Change of Control
Salary, Benefits and
Pension
These will be paid over the notice period.
The Company has discretion to make a lump sum payment in lieu of notice and to apply mitigation
if considered appropriate.
The Company also has discretion to place an individual on garden leave for all or a portion of their
Any bonus for the year will normally be pro-
rated to the date of the change of control and
paid immediately prior to the date of the change
of control.
Performance conditions will be measured at the
date of the change of control.
Discretion
The Committee has discretion to determine
whether to pro-rate the bonus for time – the
default position is that any bonus award will
be pro-rated for time.
Any unvested deferred shares will vest
immediately prior to a change of control.
Annual Bonus Plan
Deferred Bonus Plan
notice period.
Good leavers
May be entitled to receive an annual bonus
for the year of departure.
Performance conditions will typically be
assessed at the end of the financial year,
with the bonus being paid on the normal
payment date.
Any bonus will normally be pro-rated for the
period worked during the financial year.
The Committee would decide whether to make
part payment of the bonus in shares or pay it
fully in cash.
Other leavers
Typically, no bonus payable for year of
cessation.
Discretion
The Committee has the following discretion
available:
to determine that an individual is a good leaver;
and
to determine whether to pro-rate the bonus
for time – the default position is that any
bonus award will be pro-rated for time.
Good leavers
All unvested deferred shares will be preserved,
and typically vest on the normal vesting date.
Other leavers
All unvested deferred shares will be forfeited
on cessation of employment.
Discretion
The Committee has the following discretion
available:
to determine that an individual is a good leaver;
to determine whether to pro-rate deferred
shares for good leavers – the Committee’s
normal policy is that it will not pro-rate;
to vest deferred shares for good leavers at the
end of the original deferral period or at the date
of cessation – the default position (for good
leaver scenarios other than death) is that they
will vest on the original vesting date.
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Incentive plan
Treatment on Cessation of Employment
Treatment on Change of Control
Any unvested awards will normally vest
immediately prior to a change of control
subject to:
the extent to which any applicable
performance conditions have been satisfied at
the date of change of control; and
pro-rating to reflect the period of time elapsed
between grant and change of control as a
proportion of the normal vesting period.
Discretion
The Committee has discretion available to
determine whether to pro-rate awards for time –
the default position is that they will be pro-rated
for time.
LTIP
Good leavers
Unvested awards will typically vest on the
normal vesting date subject to:
the extent any applicable performance
conditions have been satisfied; and
pro-rating to reflect the period of time elapsed
between grant and cessation of employment
as a proportion of the normal vesting period.
The two-year holding period will normally
continue to apply.
Other leavers
All unvested awards will be forfeited on
cessation of employment.
Discretion
The Committee has the following discretion
available:
to determine that an individual is a good leaver;
to measure performance over the original
performance period or at the date of cessation
– the default position for leaver scenarios
other than death is that the assessment
will be performed at the end of the original
performance period;
to determine whether awards should vest
on the normal vesting date or the date of
cessation – the default position, other than
death, is that awards will vest on the original
vesting date;
to determine whether to pro-rate for time – the
default position is that awards will be pro-
rated from the date of grant to the date of
cessation; and
to determine that no holding period will apply
following vesting – the default position, other
than death, is that the holding period will
continue to apply.
Consideration of shareholders’ views
The Committee has an open relationship with shareholders on remuneration matters. It welcomes dialogue and seeks to engage with
significant shareholders and representative bodies at the earliest opportunity on material changes to remuneration policy or structure.
During development of this Policy, the Committee Chair consulted with shareholders to get their input and views on remuneration
at Entain. The feedback received was presented to, and discussed by, the Committee and was taken into account to inform the final
Policy design.
Entain plc | Annual Report 2022 146
Annual Report on Remuneration
The 2022 Annual Report on Remuneration contains details of the remuneration paid and awarded to Directors during the financial year
ended 31 December 2022. As an Isle of Man incorporated company, Entain is not subject to the UK remuneration reporting regulations
which apply to UK-incorporated companies, nevertheless, 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 2023 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 2022
Rob Wood3
Robert Hoskin
2021
2022
2021
2022
2021
Base
salary
£000
820
708
538
520
410
400
Benefits
Pension
£000
£000
36
25
15
15
5
5
49
28
25
23
–
–
Annual
bonus
Long-term
incentive1
Total
Total fixed
remuneration
Total variable
remuneration
£000
1,000
1,769
525
1,039
400
800
£000
–
–
1,432
3,343
1,247
3,069
£000
1,905
2,530
2,535
4,940
2,062
4,274
£000
905
761
578
558
415
405
£000
1,000
1,769
1,957
4,382
1,647
3,869
1. An assumed share price of 1,289p has been used to calculate the value of the 2020 LTIP awards shown in respect of 2022. This represents the average share price over the
final quarter of the 2022 financial year. The proportion of the value of the 2020 LTIP that is attributable to share price appreciation is 39.9%. The values shown also include
the value of dividend equivalents to 31 December 2022.
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 2021 for her role as a
Non-Executive Director are shown on page 151.
3. The amounts shown in last year’s report for Rob Wood and Robert Hoskin in respect of the 2019 LTIP were calculated based on an assumed share price of 1,890p. The actual
share price at vesting on 28 March 2022 was 1,643.5p. The amounts shown for 2021 have been updated to reflect this change and the value of dividend equivalents payable.
The proportion of the value of the 2019 LTIP that was attributable to share price appreciation is 69.2%.
Further information on the single figure of remuneration table
Base salary
Salaries are normally reviewed on 1 January each year.
Following the review that took effect 1 January 2022, the salaries of the Executive Directors were:
Jette Nygaard-Andersen: £820,000
Rob Wood: £538,125
Robert Hoskin: £410,000
Benefits and pension
Executive Directors may receive taxable benefits such as private medical, life insurance and car allowance.
Jette Nygaard-Andersen received a car allowance of £25,000 and 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 employees in the UK. She also received reimbursement of certain travel expenses incurred in undertaking her
duties as a Director. The table above includes these expenses and the related tax.
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 opted out of the pension plan.
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Financial statements
147
2022 annual bonus
The Executive Directors were eligible to participate in the annual bonus for 2022.
The annual bonus framework for 2022 was based on performance against four key metrics for Entain, underlying Group operating profit,
pre US joint venture (60%), growth in online NGR (20%), safer betting and gaming (15%) and customer (5%). At the start of the year
the Committee set stretching goals for these metrics, was satisfied that these represented challenging but realistic targets, and that
significant outperformance would be required to achieve a maximum payout.
The targets set for the financial and customer metrics, the performance achieved against all metrics, and the resulting payout are set out
in the table below.
Metric
Weighting
Threshold
Target
Stretch
Actual
Underlying Group
operating profit
60% £731.8m
£750.6m
£788.1m
£749.1m
Growth in online NGR
20% 7% growth 10% growth 13% growth
-1% growth
Safer betting and gaming
Customer (Net Promoter Score)
15%
5%
See below
7.0
7.5
8.0
8.0
Payout as a % of
maximum for
each metric
Payout as a % of
maximum bonus
opportunity
48%
0%
100%
100%
28.8%
0%
15.0%
5.0%
48.8%
Total as a % of maximum opportunity
In assessing the underlying Group operating profit outcome, the Committee was mindful that there were several factors that were not
included in the budget when the targets were set, which impacted performance both positively and negatively during 2022. In particular,
in determining the outcome above the Committee excluded the net benefit of acquisitions during the year as well as the impact of
unbudgeted changes in regulation that have affected several of our markets during 2022. (The actual figure shown above is stated after
these adjustments.) As shown, these adjustments led to a formulaic outcome for this metric of 48% of maximum.
The safer betting and gaming metric comprised of two equally weighted parts of 7.5% each (15% in total). In summary:
UK market – based on the usage of our active account management tools amongst risk assessed online customers. Through our 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.
Markets outside the UK – the deployment of ARC™’s advanced models and technologies tailored to each country’s regulatory
requirements, culture and maturity, gives an opportunity to offer the same targeted interactions and overall experiences to a large
number of our players around the globe.
In addition, a minimum level of completion of safer betting and gaming and other relevant training modules had to be achieved.
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 the recommendation to the Committee that the stretch target had been
achieved and so a full payout of this metric was appropriate. More detail on can be found in the safer betting and gaming section on
page 43.
A customer metric was included in the annual bonus for the first time in 2022. This was based on the achievement of a Net Promoter
Score (“NPS”) target across our core brands. A three-month rolling average NPS at December 2022 of 8.0 was achieved which met the
stretch target, resulting in maximum payout for this metric.
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 2022, 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 operational and financial progress during the year, as set out in the 2022 Group performance highlights
in the Chair’s letter on page 117.
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.
Entain plc | Annual Report 2022 148
Annual Report on Remuneration continued
The table below sets out the final outcome and annual bonus payable to each Executive Director for 2022.
Bonus opportunity (% of salary)
Salary eligible for 2022 bonus
Outcome:
– As % of maximum bonus
– As % of salary
– As £ amount
J Nygaard-Andersen
250%
£820,000
48.8%
122.0%
£1,000,400
R Wood
200%
£538,125
48.8%
97.6%
£525,210
R Hoskin
200%
£410,000
48.8%
97.6%
£400,160
Half of the total bonus is paid in cash following the year-end, while half is deferred into shares under the Annual and Deferred Bonus Plan.
These shares will vest after three years, subject to continued employment.
2020 Long-Term Incentive Plan
The Long-Term Incentive Plan values shown in the single figure table for 2022 relate to the vesting of LTIP awards made in 2020.
The targets attached to the 2020 LTIP awards and the performance outcome against these are set out below.
Metric
Relative TSR vs. FTSE 51-150
Weighting
One-third
Relative TSR vs. bespoke peer group1
One-third
Cumulative adjusted EPS
One-third
Discretionary adjustment – see detail below
Threshold
(25% vesting)
Maximum
(100% vesting)
Entain
performance
Vesting as a % of
maximum for
each metric
Vesting
Median:
-5.1%
Median:
37.2%
267p
Upper quartile:
20.7%
Upper quartile:
84.1%
295p
57.3%
100%
33.3%
57.3%
301.1p
57.1%
19.1%
100%
33.3%
(5.0)%
Total as a % of maximum opportunity
80.7%
1. The bespoke peer group comprises the following companies: 888 Holdings, Betsson, Evolution Gaming Group, Flutter Entertainment, Gamesys, International Game Technology,
Kindred Group, Playtech, Rank Group, TabCorp Holdings, The Stars Group and William Hill.
In considering the outcome of the EPS element of the 2020 LTIP, the Committee reviewed several items that impacted EPS, both positive
and negative, during the performance period. The benefit of furlough payments received during 2020 and 2021 has been excluded, as
have the net benefit of acquisitions and the impact of changes in regulation in Germany, the Netherlands and the UK. None of these items
were reflected in the original EPS targets and a de minimis limit was applied to ensure that only material unbudgeted headwinds were
considered. The EPS outcome after adjusting for these items (as shown in the table above) results in a vesting of 100% of maximum for
this metric.
As an additional check, the Committee assessed whether Entain’s overall performance over the three years justified the formulaic
vesting level of 85.7%. 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 growth into new markets, for example, with the completion of the acquisition of SuperSport Group and the
establishment of Entain CEE to drive our expansion in Central and Eastern Europe.
100% of our revenue is now derived from regulated or regulating markets, and the ARC programme has now been rolled out in
22 markets.
BetMGM, our joint venture in the US, is now live in 26 jurisdictions, and is on track to deliver positive EBITDA in H2 of 2023.
Entain’s share price had increased by 44% from 1 January 2020 to 31 December 2022.
Nevertheless, the Committee acknowledged the settlement that was reached with the UK Gambling Commission in August 2022, and
that this related to a period of time covered by the performance period of the 2020 LTIP. As a consequence, the Committee felt it was
appropriate to exercise discretion over the level of vesting of the LTIP and so reduced the formulaic outcome by five percentage points.
Finally, the Committee considered whether participants could be considered to have benefited from a windfall gain from the vesting of
the 2020 award. When making grants in 2020, the Committee was mindful of the significant fall in share price that Entain experienced
in March 2020 (when awards would typically be made) as a result of the Covid-19 pandemic – a low of £3.29 was reached on 19 March
2020 compared to an average share price of £8.79 between 1 January and 5 March 2020 (when our 2019 results were announced).
The decision was therefore taken to delay the LTIP award in 2020 until the share price had largely recovered. The 2020 awards were
made on 10 June 2020, when the share price had returned to c.90% of the value before the impact of Covid-19 (the awards were made
based on a share price of £7.86). Given this, the Committee does not consider that participants in the 2020 LTIP award are benefiting
from a windfall gain.
Taking all of these factors into account gave the Committee comfort that a vesting outcome of 80.7% of maximum was fair and
reasonable, and appropriately reflected Entain’s performance and value delivered to shareholders over the period.
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The LTIP awards granted in 2020 are due to vest on 10 June 2023 (three years from the date of grant). Therefore, the reported value
has been based on the average share price in the last three months of the financial year, which was 1,289p. 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
are set out below.
Name
R Wood
R Hoskin
LTIP shares
under award
Maximum value of
award achievable
136,803
119,160
£1,763,391
£1,535,972
% vesting
80.7%
80.7%
1. Based on dividends paid in the period since the date of grant to 31 December 2022.
2022 Share plan awards
Share awards granted during 2022 (audited)
LTIP shares
vesting
Value of
shares
vesting
Value of
dividend
equivalents
due1
Total value
of LTIP
(single figure)
Value
attributable
to share price
movement
110,400 £1,423,056
£9,165
£1,432,221
£371,998
96.162 £1,239,528
£7,979
£1,247,507
£324,017
The table below sets out share awards granted to the Executive Directors during 2022 under the LTIP and Annual and Deferred Bonus
Plan (“ADBP”).
Name
Award type
Grant date
Face value of
award
Shares
awarded1,2
% vesting
at threshold
performance
% vesting at
maximum
performance
J Nygaard-Andersen
LTIP 18 March 2022
£2,460,000
149,090
ADBP 18 March 2022
£884,616
R Wood
LTIP 18 March 2022
£1,345,313
ADBP 18 March 2022
£519,641
R Hoskin
LTIP 18 March 2022
£1,025,000
ADBP 18 March 2022
£400,000
46,805
81,534
27,494
62,121
21,164
25%
n/a
25%
n/a
25%
n/a
100%
n/a
100%
n/a
100%
n/a
Performance
conditions
See below
None
See below
None
See below
None
1. The LTIP awards were calculated, in line with the Plan rules, based on a share price of 1,650p (the closing share price on the day prior to grant).
2. Consistent with the Directors’ Remuneration Policy, 50% of an Executive Director’s annual bonus is deferred into shares under the ADBP. The awards shown above were granted
in respect of annual bonuses for the 2021 financial year. These awards will normally vest on 18 March 2025, the third anniversary of the grant, subject to continued employment.
The number of shares granted was calculated, in line with the plan rules, based on a share price of 1,890p (the average price over the period 1 October to 31 December 2021).
For the 2022 LTIP, the Committee considered the difficulty in setting appropriately stretching but incentivising EPS targets, given the
fast-changing external environment in which we operate. The Committee concluded that this could 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.
50% of the LTIP awards are based on TSR performance relative to the FTSE 100 and 50% on performance relative to an industry peer
group. Performance for these awards will be measured over the period 1 January 2022 to 31 December 2024. The target ranges are set
out below.
Metric
Weighting
Threshold (25% vesting)
Maximum (100% vesting)
Relative TSR vs. FTSE 100
Relative TSR vs. bespoke peer group1
50%
50%
Median
Upper quartile
Straight-line vesting between threshold and maximum
1. The bespoke peer group for the 2022 awards comprises the following companies: 888 Holdings, Aristocrat, Betsson, Caesars Entertainment, DraftKings, Evolution Gaming
Group, Flutter Entertainment, International Game Technology, Kindred Group, MGM Resorts, Playtech, PointsBet, Rank Group, Rush Street Interactive and Sands LV.
The terms of the 2022 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 formulaic outturn is
not appropriate.
Shareholdings and share interests
Shareholding guidelines
Executive Directors are required to maintain a shareholding as determined by the Committee and retain this for a period following
cessation of employment. 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.
Entain plc | Annual Report 2022 150
Annual Report on Remuneration continued
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.
Share interests (audited)
As at 31 December 2022, the value of Jette Nygaard-Andersen, Rob Wood and Robert Hoskin’s shareholdings were £0.5m,
£2.4m and £3.7m respectively. Following her appointment to the Board in 2021, Jette Nygaard-Andersen continues to build up her
holdings in Entain shares.
Executive Directors’ share interests as at 31 December 2022 are set out below.
Share interests
subject to
performance
conditions2
Share interests not
subject to
performance
conditions3
Name
Number of
beneficially
owned shares1
Share
awards
Share
options
Share
awards
Share
options
Total interests
at 31 December
2022
Value of shares
held as % of
base salary4
Shareholding
requirement
met?
J Nygaard-Andersen
9,900
296,630
144,675
304,402
–
–
46,805
66,561
–
–
256,160
–
246,854
–
21,164
R Wood
R Hoskin
353,335
515,638
524,178
56%
442%
894%
N
Y
Y
1. Beneficially owned shares include shares held directly or indirectly by connected persons. There were no changes in the number of beneficially owned shares for any Executive
Director between 31 December 2022 and the date this report was signed.
2. Share interests subject to performance conditions are those made under the LTIP. Awards to Jette Nygaard-Andersen and Rob Wood are granted in the form of conditional
awards and those to Robert Hoskin are granted as nil-cost options.
3. Share interests not subject to performance conditions are those made under the ADBP. Awards to Jette Nygaard-Andersen and Rob Wood are granted in the form of conditional
awards and those to Robert Hoskin are granted as nil-cost options.
4. 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 ADBP. The values of £0.5m, £2.4m and £3.7m for Jette Nygaard-Andersen, Rob Wood and Robert Hoskin respectively are based on the closing share price at 30
December 2022 (1,321.5p).
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 2022 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)
No payments for loss of office were made during the year.
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. This requirement expired on 17 July 2022. The table below sets out details of the ABDP and LTIP awards, made
in 2019, which were both released on the ordinary vesting date of 26 March 2022. The 2019 LTIP award was pro-rated for time served
during the performance period as well as the outcome of the performance conditions. Dividend equivalents were also received on all of
the vested shares.
Award
2019 LTIP
2019 ADBP
End of performance period
Number of shares
31 December 2021
26 March 2022
143,471
109,293
Governance Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
151
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 Gibson
Pierre Bouchut2
Stella David
Mark Gregory3
Peter Isola4
Vicky Jarman3
Virginia McDowell
David Satz5
Rahul Welde6
Former Non-Executive
Directors7
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Fees1
£000
Benefits
£000
Annual
bonus
£000
Long-term
incentives
£000
Pension
£000
Total
£000
Total fixed
remuneration
Total variable
remuneration
450
450
106
108
155
128
106
88
42
85
85
70
106
106
95
85
42
_
_
35
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
450
450
106
108
155
128
106
88
42
85
85
70
106
106
95
85
42
–
–
35
450
450
106
108
155
128
106
88
42
85
85
70
106
106
95
85
42
–
–
35
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1. Non-Executive Directors receive fees only and do not receive any additional benefits or participate in any incentive arrangements.
2. Pierre Bouchut’s fees are denominated in Euros. The change in fee received in 2022 compared to 2021 reflects foreign exchange rate movements.
3. Mark Gregory and Vicky Jarman resigned from the Board on 17 February 2023.
4. Peter Isola resigned from the Board on 21 March 2022. His fees for 2022 include payment of three months in lieu of notice.
5. David Satz’s fees are denominated in US Dollars. The change in fee received in 2022 compared to 2021 reflects foreign exchange rate movements.
6. Rahul Welde joined the Board on 1 July 2022.
7. Fees totalling £35,000 were paid to Non-Executive Directors in 2021 who either stood down from the Board during that year or, in the case of Jette Nygaard-Andersen,
became an Executive Director, and received no Non-Executive Director fees in relation to 2022.
Entain plc | Annual Report 2022 152
Annual Report on Remuneration continued
Fee structure
The table below sets out the fee structure for 2023 for the Non-Executive Directors and the Chairman of the Board. These are unchanged
from those in 2022. 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 2023
£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
V McDowell
D Satz
R Welde
Date appointed
4 November 2019
13 September 2018
4 March 2021
6 June 2018
22 October 2020
1 July 2022
Arrangement
Notice period
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
Share interests (audited)
Non-Executive Directors’ share interests as at 31 December 2022 are set out below. With the exception of Vicky Jarman who joined the
Board in March 2021 and Rahul Welde who joined the Board in July 2022, all Non-Executive Directors held shares with a value in excess
of 75% of their annual fee at 31 December 2022.
Director
B Gibson
P Bouchut
S David
M Gregory2
P Isola3
V Jarman2
V McDowell
D Satz
R Welde
Number of beneficially
owned shares1
68,437
38,500
8,873
7,446
43,035
1,700
15,000
7,500
–
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 2022 and the date this report was signed.
2. Mark Gregory and Vicky Jarman resigned from the Board on 17 February 2023.
3. Peter Isola resigned from the Board on 21 March 2022. The beneficially owned shares shown for him reflect the position on that date.
Stella David
Chair of the Remuneration Committee
9 March 2023
Governance Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
153
Directors’ Report
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.
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.
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 page 91.
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 Code, all Directors
will seek reappointment at the 2023 AGM, as they did in 2022.
Directors’ remuneration
The 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 152.
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.
Directors’ interests
This is reported in the Directors’ Remuneration Report on pages
150 and 152 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 2022.
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 8 to 89. 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 35.
Dividends
On 11 August 2022 the Group announced that it would implement
a new dividend policy. The Board recognises the importance
of dividends to shareholders, the strength of the operational
performance of the business and our future prospects and is
proposing a progressive dividend, starting with a total dividend
of £100m for the Financial Year to 31 December 2022, to be paid
to shareholders in equal instalments in respect of the Interim
and Full Year results.
Corporate Governance
The Directors recognise the importance of corporate governance
and their associated report is set out on pages 90 to 154.
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.
Engagement with Employee Statements
This is discussed in the s172 Statement on page 62 and
on pages 98 to 99 and page 131.
Engagement with Stakeholder Statements
This is discussed in the s172 Statement on pages 62 to 65
and on pages 98 to 99.
Research and development
The Group’s research and development is focused on the
development and maintenance of the Entain platform,
the production of its product portfolio, including ARC™,
and the Group’s ongoing investment in its New Opportunities
segment. The Group will continue to invest in research and
development to ensure it remains well positioned to deliver
sustainable growth.
For further details on the Group’s strategic priorities,
see the Strategic Report.
Entain plc | Annual Report 2022 154
Directors’ 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 1 March 2023, 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 2022 (2021: 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 25 April
2023 at etc. venues, 200 Aldersgate, London, EC1A 4HD.
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
BlackRock Inc.
Dodge & Cox
Sands Capital
Management
Janus Henderson
Group plc
The Vanguard
Group, Inc
Number of
Shares
101,635,351
41,289,971
34,944,958
27,861,650
25,039,202
24,647,166
% of Issued Share
Capital & Total
Voting rights1
J M Barry Gibson
Chairman
17.26%
9 March 2023
7.01%
5.93%
4.73%
4.25%
4.19%
1. The Company had 588,850,427 ordinary shares in issue on 1 March 2023.
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 2022 Governance Overview
Strategic report
Governance
Financial statements
155
Financial
statements
Financial statements
157
172
173
174
175
176
177
226
227
228
229
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
234 Glossary
235
236
Shareholder information
Corporate information
Entain plc | Annual Report 2022 156
Entain plc | Annual Report 2022 Financial Statements Overview
Strategic report
Governance
Financial statements
157
KPMG LLP’s Independent Auditor’s Report
To the members of Entain plc
1. Our opinion is unmodified
In our opinion:
¥ the financial statements of Entain plc give a true and fair view of the state of the Group’s and of the Parent Company’s affairs
as at 31 December 2022, and of the Group’s and of the Company’s profit for the year then ended;
¥ the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in 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 Group and Parent Company financial statements have been prepared in accordance with the requirements of the Isle of Man
Companies Act 2006.
What our opinion covers
We have audited the Group and Parent Company financial statements of Entain plc (“the Company”) for the year ended 31 December 2022
(FY22) included in the Annual Report, which comprise:
Group
Parent Company (Entain plc)
¥ Consolidated income statement
¥ Company income statement
¥ Consolidated statement of comprehensive income
¥ Company balance sheet
¥ Consolidated balance sheet
¥ Company statement of changes in equity
¥ Consolidated statement of changes in equity
¥ Consolidated statement of cash flows
Notes 1 to 36 to the Group financial statements,
including the accounting policies in note 4.
Basis for opinion
Notes 1 to 18 to the Parent Company financial statements,
including the accounting policies in note 3.
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis
for our opinion. Our audit opinion and matters included in this report are consistent with those discussed and included in our reporting
to the Audit Committee (“AC”).
We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements
including the FRC Ethical Standard as applied to listed public interest entities.
2. Overview of our audit
Factors driving our
view of risks
Having taken due consideration of the current economic
environment, we have identified the same key audit
matters for Entain plc as in prior year. We consider the
level of risk relating to revenue recognition from online
operations has increased compared to FY21 due to
high revenue growth in overseas markets.
The Group’s reliance on complex IT systems for
the processing of revenue transactions relating to
online operations could result in incorrect reporting of
revenue from aggregated systematic calculation errors.
In addition, we identified a fraud risk related to possible
manipulation of revenue by manual journals.
Recoverability of investments in subsidiaries and
receivables due from Group entities remains our biggest
focus in the audit of the parent Company, Entain plc,
due to their materiality in the context of the parent
Company financial statements.
Key Audit Matters
Revenue recognition from
online operations
Recoverability of parent
Company’s investments in
subsidiaries and receivables
due from Group entities
Vs
FY21
Item
é
4.1
çè 4.2
Entain plc | Annual Report 2022 158
Independent Auditor’s report continued
Audit committee
interaction
Recoverability of investments in subsidiaries and receivables due from Group entities remains our biggest focus
in the audit of the parent Company, Entain plc, due to their materiality in the context of the parent Company
financial statements.
The matters included in the Audit Committee Chair’s report on page 107 are materially consistent with our
observations of those meetings.
Total audit fee
Audit related fees
(including interim review)
Other services
Non-audit fee as a % of total
audit and audit related fee %
£3.2m
£0.4m
£0.1m
2.8%
Date first appointed
6 June 2018
Uninterrupted audit tenure
5 years
Next financial period
which requires a tender
Tenure of Group
engagement partner
Average tenure of
component signing partners
2028
2 years
1.6 years
Our independence
We have fulfilled our ethical responsibilities and remain
independent of the Group in accordance with UK ethical
requirements, including the FRC Ethical Standard as
applied to listed public interest entities.
Apart from the matters noted below, we have not
performed any non-audit services during the year ended
31 December 2022 or subsequently which are prohibited
by the FRC Ethical Standard.
During 2023, we identified that a KPMG member firm
had assisted with the preparation of local GAAP financial
statements over the period 2019 to 2022 to entities which
were part of residual components and therefore not in
scope for the group audit. The services, which have been
terminated, were administrative in nature and did not
involve any management decision-making or bookkeeping.
The work was undertaken after the group audit opinion
was signed by KPMG LLP for each of the impacted
financial years and had no direct or indirect effect on
Entain plc’s consolidated financial statements.
In our professional judgment, we confirm that based on
our assessment of the breach, our integrity and objectivity
as auditor has not been compromised and we believe that
an objective, reasonable and informed third party would
conclude that the provision of this service would not impair
our integrity or objectivity for any of the impacted financial
years. The audit committee have concurred with this view.
We were first appointed as auditor by the shareholders
for the year ended 31 December 2018. The period of total
uninterrupted engagement is for the 5 financial years
ended 31 December 2022. These are the second set of the
Group’s financial statements signed by Mark Flanagan.
Previously Mark was a Key Partner involved in the
engagement, and therefore, he is required to rotate off after
7 years of his involvement in the engagement. Therefore,
Mark will be required to rotate off after the FY24 audit.
The average tenure of partners responsible for component
audits as set out in section 7 below is 1.6 years, with the
shortest being 1 and the longest being 2.
Materiality
(item 6 below)
The scope of our work is influenced by our view of
materiality and our assessed risk of material misstatement.
Group
We have determined overall materiality for the Group
financial statements as a whole at £40m (FY21: £35m)
and for the Parent Company financial statements as a
whole at £20m (FY21: £17.5m).
Consistent with FY21, we determined that revenue
remains the benchmark for the Group as Group revenue
provides a more stable measure year on year than Group
profit before tax. As such, we based our Group materiality
on revenue, of which it represents 0.9% (FY21: 0.9%).
Materiality for the Parent Company financial statements
was determined with reference to a benchmark of
Parent Company total assets of which it represents 0.4%
(FY21: 0.3%).
GPM
HCM
PLC
LCM
40
35
26
30
30
31
20
20
17
17
AMPT
2.0
1.8
FY22 £m
FY21 £m
Group Group Materiality
GPM
HCM
PLC
LCM
AMPT Audit Misstatement Posting Threshold
Group Performance Materiality
Highest Component Materiality
Parent Company Materiality
Lowest Component Materiality
Entain plc | Annual Report 2022 Financial Statements
Overview
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Governance
Financial statements
159
Group scope
(item 7 below)
We have performed risk assessment and planning
procedures to determine which of the Group’s components
are likely to include risks of material misstatement to
the Group financial statements, the type of procedures
to be performed at these components and the extent
of involvement required from our component auditors
around the world.
Of the group’s eleven (FY21: ten) reporting components,
we subjected five (FY21: three) to full scope audits
for group purposes and none (FY21: one) to specified
risk-focused audit procedures. We have subjected two
additional components to full scope audits in the current
year – one due to being considered financially significant
as a result of the component’s contribution to revenue
increasing in the financial year as a proportion of the
whole Group performance, and another due to being
considered significant due to risk.
The group operates a centralised IT function that supports
IT processes for certain components. The IT function is
geographically spread across Hyderabad (India), Gibraltar,
Stratford (UK) and Vienna (Austria). The transactions
processed by these IT systems are included in the financial
information of the reporting components it services
and therefore it is not a separate reporting component.
This service centre is subject to specified risk-focused
audit procedures, predominantly the testing of the relevant
general IT control environment (“GITCs”) and automated
IT application controls.
The components within the scope of our work accounted
for the percentages illustrated opposite.
In addition, we have performed Group level analysis on
the remaining components to determine whether further
risks of material misstatement exist in those components.
We consider the scope of our audit, as communicated
to the Audit Committee, to be an appropriate basis for
our audit opinion.
2021 Full scope audits
2021 Specified risk-focused audit procedures
2021 Remaining components
2022 Full scope audits
2022 Remaining components
19%
16%
9%
75%
81%
Total profits and losses that made
up group profit before tax
2%
1%
99%
98%
Net assets
17%
24%
76%
83%
Revenue
15%
30%
70%
85%
The impact of climate
change on our audit
(1) Calculated by adding the Group’s share of revenue from its joint ventures
to the Group’s revenue figure.
Revenue including share of
revenue from joint ventures1
We have considered the potential impacts of climate change on the financial statements as part of our planning
of the audit. The Group has set out its commitment to the carbon net zero by 2035 including a reduction in
scope 1, 2 and 3 emissions by 2027. The Group’s business model does not include high polluting activities that
significantly contribute to climate change and further information about the Group’s identified climate risks is
provided in the “Task Force for Climate-related Financial Disclosure Statement”.
As part of our risk assessment, KPMG have inquired with the Group’s head of ESG to understand the climate
change risks to the Group and what they have assessed the impact of these are on the financial statements.
We have also read meeting minutes of the Group’s ESG committee and applied our knowledge of the Group
and sector in which it operates to understand the extent of the potential impact of climate change risks on the
Group’s financial statements. Considering the nature of the Group’s assets and liabilities, and taking account
of the headroom on goodwill and indefinite life intangibles impairment testing, there was no significant impact
on our key audit matters or other key areas of our audit.
We have read the Group’s Task Force for Climate-Related Financial Disclosures in the front half of the annual
report and considered consistency with the financial statements and our audit knowledge.
Entain plc | Annual Report 2022 160
Independent Auditor’s report continued
3. Going concern, viability and principal risks and uncertainties
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the
Parent Company or to cease their operations, and as they have concluded that the Group’s and the Parent 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”).
Our conclusions
¥ 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 Parent Company’s ability to continue as a
going concern for the going concern period;
¥ We have nothing material to add or draw
attention to in relation to the directors’
statement in note 2 to the consolidated
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 Parent Company’s use
of that basis for the going concern period,
and we found the going concern disclosure
in note 2 to be acceptable; and
Going concern
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/or metrics relevant to debt
covenants over this period were:
¥ The impact of a significant change in the Group’s gaming
tax profile, including changes in key geographies;
¥ The impact of significant changes in the regulatory
environment affecting the Group’s ability to operate
in certain territories; and
¥ The impact of a cyber security failings affecting the
Group’s operating systems for a significant portion
of the going concern period.
We also considered less predictable but realistic second
order impacts, such as the impact of the political or tax
policy changes, which could result in a rapid reduction
of available financial resources
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 assessed the completeness and accuracy of the going
concern disclosure.
Accordingly, based on those procedures, we found the
directors’ use of the going concern basis of accounting
without any material uncertainty for the Group and Parent
Company 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 Parent Company will continue in operation.
Entain plc | Annual Report 2022 Financial Statements Overview
Strategic report
Governance
Financial statements
161
Disclosures of
emerging and
principal risks and
longer-term viability
Our responsibility
Our reporting
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.
We have nothing material to add or draw
attention to in relation to these disclosures.
We have concluded that these disclosures
are materially consistent with 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 89 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 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.
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 Parent Company’s
longer-term viability.
Entain plc | Annual Report 2022 162
Independent Auditor’s report continued
4. Key audit matters
What we mean
Key audit matters are those matters that, in our professional judgment, 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 include below the Key Audit Matters in decreasing order of audit significance 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, for the
purpose of our audit of the financial statements as a whole. We do not provide a separate opinion on these matters.
4.1 Revenue from
online operations
(group)
Financial Statement Elements
Our assessment of risk vs FY21
Our findings
FY22
FY21
£2,995.5m
£3,010.2m
Revenue
from online
operations
é
We consider the level
of risk relating to revenue
from online operations
has increased compared
to FY21 due to the to
the high revenue growth
in overseas markets.
FY22: Our testing identified no
errors in the recording of revenue
transactions from Online operations
FY21: No errors identified
Entain plc | Annual Report 2022 Financial Statements Overview
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163
4.1 Revenue from
online operations
(group)
continued
Description of the
Key Audit Matter
Risk of data
processing error
Revenue streams are computed
and recorded on highly complex
IT systems that process a high
volume of low value transactions,
with the gaming and betting
platforms and customer wallets
(together “platform”) being the key
elements. Aggregated systematic
errors in calculations could result
in incorrect reporting of revenue
from online operations.
Risk of fraud
We have identified a fraud
risk that revenue from online
operations could be manipulated
through manual journals in
order to inflate results or reach
bonus incentives.
Our response to the risk
As a result of our risk assessment, we increased the number
of components where we performed full scope audits.
Our procedures included:
Controls: For the Group’s in-house systems we utilised our own IT
auditors to assess the relevant IT systems and controls by:
¥ Understanding 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 operating effectiveness of relevant general IT controls
(“GITCs”) including access to programs and data and program change
– specifically evaluating account set-up and termination of users,
password restrictions, users with privileged access and program
change controls;
¥ Assessing the impact of GITCs deficiencies and performing additional
audit procedures as needed, for example where unauthorised users
were identified, we tested whether those users had inappropriately
accessed the system;
¥ Testing automated controls around wallet deposits/withdrawals,
placing and settlement of bets, and calculation of revenue through
placing test bets.
Tests of details (tracing and vouching): We assessed the
appropriateness of revenue recognised by:
¥ To address the identified risks, including the fraud risk, comparing
the cash movements in the customer wallets in aggregate to revenue
recognised from online operations throughout the period. As part of
this comparison, for the cash movements relating to the Payment
Service Provider receivable, we obtained a summary of movements
for the year and agreed a sample of non-customer cash movements to
external documentation, for example funding, settlements and charges
to either PSP or bank statements. For other material reconciling items
between the cash movements and the revenue recognised, we critically
assessed the appropriateness of these items and, where relevant,
obtained supporting documentation.
¥ Comparing the amounts of revenue from online operations recorded
in the accounting records against the amounts reported in the platform
or by third parties, as applicable.
Communications with the Entain plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
¥ Our approach to the audit of revenue from Online operations including details of our planned
substantive procedures and the extent of our control reliance;
¥ The increase in our scope in the current year to extend the key audit matter to additional
in-scope components;
¥ Discussions on the effectiveness of the general IT environment.
Areas of particular auditor judgement
We did not identify any areas of particular auditor judgement in relation to this key audit matter.
Our findings
We assessed the impact of identified control deficiencies and considered the effect on our substantive
testing. Based on this assessment, we were not required to significantly expand the extent of our planned
detailed testing. Our testing identified no errors in the recording of revenue transactions for the revenues
from online operations (FY21: No errors identified).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 107 for details on how the Audit
Committee considered the revenue from online operations.
Entain plc | Annual Report 2022 164
Independent Auditor’s report continued
4.2 Recoverability
of parent company’s
investments in
subsidiaries and
receivables due
from group entities
(parent company)
Financial Statement Elements
Our assessment of risk vs FY21
Our findings
FY22
FY21
Investments
in subsidiaries
£4,845.6m
£4,372.1m
Receivables
due from
Group
entities
£770.3m
£742.6m
çè
We have not identified
any significant changes
to our assessment of the
level of risk relating to
recoverability of parent
company’s investments in
subsidiaries and receivables
due from Group entities
compared to FY21.
FY22: Balanced
FY21: Balanced
Description of the Key Audit Matter
Our response to the risk
Low risk, high value
The carrying amount of the parent Company’s
investments in subsidiaries and of the receivables
due from group entities together represents 99%
(FY21: 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 balances is such that we would
expect to obtain audit evidence primarily through
the detailed procedures described.
Our procedures included:
¥ Historical comparisons: We assessed the
reasonableness of the budgets by considering
the historical accuracy of the previous forecasts.
¥ Comparing valuations: We compared the carrying
value of the parent Company’s investments in
subsidiaries and receivables due from Group entities
to the value in use calculations for the relevant CGUs
and to the market capitalisation of the Group.
Communications with the Entain plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
¥ Our approach to the audit of investments in subsidiaries and receivables due from group entities, including
details of our planned substantive procedures, and that we would not seek to place reliance on controls.
¥ Our conclusion on the recoverability of the investments in subsidiaries and receivables due from
Group entities with an indication of where the Group’s estimated recoverable amount lay within our
reasonable range.
Areas of particular auditor judgement
We did not identify any areas of particular auditor judgement in relation to this key audit matter.
Our findings
We found the company’s conclusion that there is no impairment of investments in subsidiaries and receivables
due from group entities to be balanced. (FY21: balanced).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 107 for details on how the Audit
Committee considered the recoverability of parent company’s investments in subsidiaries and receivables due from group entities.
Entain plc | Annual Report 2022 Financial Statements
Overview
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165
5. Our ability to detect irregularities, and our response
Fraud – identifying and responding to risks of material misstatement due to fraud
Fraud risk
assessment
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:
¥ Enquiring of directors, the audit committee, 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.
¥ 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.
¥ Our forensic specialists assisted us in identifying key fraud risks. This included holding a discussion with
the engagement partner and team and assisting with designing relevant audit procedures to respond to
the identified fraud risks.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of
fraud throughout the audit. This included communication from the Group audit team to full scope component
audit teams of relevant fraud risks identified at the Group level and request to full scope component audit teams
to report to the Group audit team any instances of fraud that could give rise to a material misstatement at the
Group level.
As required by auditing standards, and taking into account possible pressures to meet profit targets and bonus
incentives, 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 at risk
of being overstated due to manual manipulation, 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 impairment and pension assumptions.
We did not identify any additional fraud risks.
Risk
communications
Fraud risks
Link to KAMS
Further detail in respect of online revenue recognition is set out in the key audit matter disclosure in section 4.1
of this report.
Procedures to
address fraud risks
We also performed procedures including:
¥ Identifying journal entries and other adjustments to test for all full scope components based on high
risk criteria for each component and comparing the identified entries to supporting documentation.
These included: unusual revenue pairings and unusual journals with a credit or debit to entry to cash.
¥ Evaluated the business purpose of significant unusual transactions.
¥ Assessing whether significant accounting estimates are indicative of a potential bias.
Entain plc | Annual Report 2022 166
Independent Auditor’s report continued
Laws and regulations – identifying and responding to risks of material misstatement relating to compliance
with laws and regulations
Laws and regulations
risk assessment
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, inspection of industry publications
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.
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.
Risk
communications
We communicated identified laws and regulations throughout our team and remained alert to any indications
of non-compliance throughout the audit. This included communication from the Group audit team to full-scope
component audit teams of relevant laws and regulations identified at the Group level, and a request for full
scope component auditors to report to the Group audit team any instances of non-compliance with laws and
regulations that could give rise to a material misstatement at the Group level.
Direct laws context
and link to audit
The potential effect of these laws and regulations on the financial statements varies considerably.
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
Most significant
indirect law/
regulation areas
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, betting and gaming regulation and responsible gaming legislation across all of the territories
where the Group generates material revenues.
For the matters discussed in note 33 we assessed disclosures against our understanding from inspection
of correspondence received by the entity and inquiries with external legal counsel.
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
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 fraud 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.
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167
6. Our determination of materiality
The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative
considerations to help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating
the effect of misstatements, both individually and in the aggregate, on the financial statements as a whole.
£40m
(FY21: £35m)
Materiality for
the group financial
statements as
a whole
What we mean
A quantitative reference for the purpose of planning and performing our audit.
Basis for determining materiality and judgements applied
Materiality for the Group financial statements as a whole was set at £40m (FY21: £35m). This was determined
with reference to a benchmark of Group revenue.
Consistent with FY21, we determined that Group revenue remains the main benchmark for the Group as Group
revenue provides a more stable measure year on year than Group profit before tax from continuing operations.
Our Group materiality of £40m was determined by applying a percentage to the Group revenue. When using a
benchmark of revenue to determine overall materiality, KPMG’s approach for listed entities considers a guideline
range 0.5% – 1.0 % of the measure. In setting overall Group materiality, we applied a percentage of 0.9%
(FY21: 0.9%) to the benchmark.
Materiality for the Parent Company financial statements as a whole was set at £20m (FY21: £17.5m), determined
with reference to a benchmark of Parent Company total assets, of which it represents 0.4% (FY21: 0.3%).
£30m
(FY21: £26.25m)
Performance
materiality
What we mean
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.
£2.0m
(FY21: £1.8m)
Audit misstatement
posting threshold
Basis for determining performance materiality and judgements applied
We have considered performance materiality at a level of 75% (FY21: 75%) of materiality for Entain plc Group
financial statements as a whole to be appropriate.
The Parent Company performance materiality was set at £15m (FY21: £13m), which equates to 75%
(FY21: 75%) of materiality for the Parent Company financial statements as a whole.
We applied this percentage in our determination of performance materiality because we did not identify
any factors indicating an elevated level of risk.
What we mean
This is the amount below which identified misstatements are considered to be clearly trivial from a quantitative
point of view. We may become aware of misstatements below this threshold which could alter the nature,
timing and scope of our audit procedures, for example if we identify smaller misstatements which are indicators
of fraud.
This is also the amount above which all misstatements identified are communicated to Entain plc’s
Audit Committee.
Basis for determining the audit misstatement posting threshold and judgements applied
We set our audit misstatement posting threshold at 5% (FY21: 5%) of our materiality for the Group financial
statements. We also report to the Audit Committee any other identified misstatements that warrant reporting
on qualitative grounds.
The overall materiality for the Group financial statements of £40m (FY21: £35m) compares to the below amounts as follows:
Total Group Revenue
Group profit before tax
Total Group Assets
FY22
FY21
FY22
FY21
FY22
FY21
Amount
£4,296.9m
£3,830.0m
£102.9m
£393.2m
£8,739.9m
£7,252.0m
Group Materiality as %
of amount
0.9%
0.9%
38.9%
8.9%
0.5%
0.5%
Entain plc | Annual Report 2022 168
Independent Auditor’s report continued
7. The scope of our audit
Group scope
What we mean
How the Group audit team determined the procedures to be performed across the Group.
Of the group’s eleven (FY21: ten) reporting components, we subjected five (FY21: three) to full scope audits
for group purposes and none (FY21: one) to specified risk-focused audit procedures. In order to determine the
work performed at the reporting component level, we identified those components which we considered to be
of individual financial significance, those which were significant due to risk and those remaining components
on which we required procedures to be performed to provide us with the evidence we required in order to
conclude on the group financial statements as a whole.
We determined individually financially significant components as those contributing at least 10% (2021: 10%)
of total profits and losses that made up group profit before tax from continuing operations or group
revenue. We selected profit before tax from continuing operations and revenue because these are the most
representative of the relative size of the components. We identified 4 (2021: 3) components as individually
financially significant components and performed full scope audits on these components. The increase in the
current year in such components is due to one component’s contribution to revenue increasing in the financial
year as a proportion of the whole Group performance.
We have also considered 1 component, which is a joint venture, to be significant due to significant risk
of material misstatement affecting the group financial statements and performed a full scope audit of this
component (2021: specific risk-focussed audit procedures). Whilst it does not contribute to the Group’s revenue
metrics, its revenues are considered to be of significant importance to the Group therefore we considered it
to be significant due to significant risk of material misstatement in the current year.
The group operates a centralised IT function that supports IT processes for certain components. The IT
function is geographically spread across Hyderabad (India), Gibraltar, Stratford (UK) and Vienna (Austria).
The transactions processed by these IT system are included in the financial information of the reporting
components it services and therefore it is not a separate reporting component. This service centre is subject
to specified risk-focused audit procedures, predominantly the testing of the relevant general IT control
environment (“GITCs”) and automated IT application controls.
Scope
Full scope audit
Number of
components
Range of materiality applied
5 (2021: 3)
£20m – £30m (2021: £17m – £31m)
Specified audit procedures over revenue, costs of sales
and compliance with laws and regulations
0 (2021: 1)
Not applicable
(2021: £17m)
The components within the scope of our work accounted for the following percentages of the group’s results:
83% group revenue (FY21: 76%), 85% Revenue including share of revenue from joint ventures (FY21: 75%),
81% total profits and losses that made up group profit before tax from continuing operations (FY21: 84%)
and 98% group net assets (FY21: 97%).
The Group team instructed component auditors on the scope of their work including specifying minimum
procedures to perform in their audit of revenue and management override of controls. The Group team approved
the component materialities, as detailed in the table above, having regard to the mix of size and risk profile of
the Group across the components.
For the residual 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 Group audit team has also performed audit procedures on the following areas of behalf of the components:
¥ Items excluded from underlying Group PBTCO;
¥ Direct tax for UK and Gibraltar;
¥ Right of use assets and liabilities;
¥ Share based payments; and
¥ Defined benefit pension schemes.
These items were audited by the Group team because they are managed centrally by the Group finance team.
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 parent company audit was completed by the Group audit team. All of the other components subject to a
full scope audit were completed by component audit teams.
Entain plc | Annual Report 2022 Financial Statements Overview
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169
Group audit team
oversight
What we mean
The extent of the Group audit team’s involvement in component audits.
In working with component auditors, we:
¥ Held planning calls with component audit teams to discuss the significant areas of the audit relevant
to the components, including the key audit matter in respect of revenue from online operations.
¥ Issued group audit instructions to component auditors on the scope of their work, including specifying
the minimum procedures to perform in their audit of revenue and management override of controls.
¥ Visited five components in-person as the audit progressed to understand and challenge the audit approach
and organised video conferences with the partners and directors of the Group and component audit teams
throughout the key audit stages. At these visits and video conferences, the findings reported to the Group
team were discussed in more detail, and any further work required by the Group team was then performed
by the component audit teams.
¥ Inspected component audit teams’ key workpapers, with a particular focus on the component’s work on
revenue from online operations and risk of management override of controls to ensure appropriateness
of documentation and conclusions reached.
Entain plc | Annual Report 2022 170
Independent Auditor’s report continued
8. 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.
All other information
Our responsibility
Our reporting
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 or
inconsistencies in the other information.
Directors’ remuneration report
Our responsibility
Our reporting
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.
Under the terms of our engagement, we are also required to report to you if, in our opinion,
the part of the Directors’ Remuneration Report which we were engaged to audit is not in
agreement with the accounting records and returns.
We have nothing to report in
these respects.
Corporate governance disclosures
Our responsibility
We are required to perform procedures to identify whether there is a material inconsistency
between the financial statements and our audit knowledge, and:
¥ 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.
Our reporting
Based on those procedures, we have
concluded that each of these disclosures
is materially consistent with the financial
statements and our audit knowledge.
We are also 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.
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171
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 81, 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.
The Company is required to include these financial statements in an annual financial report prepared using the single electronic
reporting format specified in the TD ESEF Regulation. This auditor’s report provides no assurance over whether the annual financial
report has been prepared in accordance with that format.
10. 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
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants and Recognised Auditors
EastWest
Tollhouse Hill
Nottingham
NG1 5FS
9 March 2023
Entain plc | Annual Report 2022 172
Consolidated income statement
for the year ended 31 December 2022
2022
2021
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
4,348.9
(52.0)
4,296.9
(1,582.2)
2,714.7
(1,978.8)
2,128.9
(1,393.0)
735.9
(194.1)
541.8
(89.0)
4.3
(23.1)
(112.2)
321.8
(97.9)
223.9
–
223.9
225.6
(1.7)
223.9
60.9p1
60.9p1
60.5p1
60.5p1
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
(Losses)/gains arising from change in fair value
of financial instruments
(Losses)/gains 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)
–
–
–
–
–
(213.2)
–
(213.2)
(213.2)
–
(213.2)
(5.7)
–
–
–
(218.9)
27.9
(191.0)
(13.4)
(204.4)
(201.4)
(3.0)
(204.4)
4,348.9
(52.0)
4,296.9
(1,582.2)
2,714.7
(2,192.0)
2,128.9
(1,606.2)
522.7
(194.1)
328.6
(94.7)
4.3
3,886.3
(56.3)
3,830.0
(1,394.2)
2,435.8
(1,789.2)
1,851.5
(1,204.9)
646.6
(162.5)
484.1
(77.1)
2.1
(23.1)
62.0
(112.2)
102.9
(70.0)
32.9
56.2
527.3
(90.1)
437.2
–
–
–
–
–
(128.3)
–
(128.3)
(128.3)
–
(128.3)
(5.8)
–
–
–
(134.1)
(27.5)
(161.6)
(13.4)
19.5
(5.6)
(9.3)
431.6
(170.9)
24.2
(4.7)
19.5
6.4p
4.1p
6.3p
4.1p
919.2
(15.3)
903.9
(19.2)
(362.0)
(194.1)
328.6
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
(170.9)
–
(170.9)
19.2
–
19.2
–
(147.5)
–
(128.3)
Total
£m
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
62.0
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
1,008.5
(15.3)
993.2
(19.2)
(238.1)
(194.1)
541.8
(89.3)
–
(89.3)
–
(123.9)
–
(213.2)
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 71 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 177 to 225 form an integral part of these consolidated financial statements.
Financial statements Entain plc | Annual Report 2022
Overview
Strategic report
Governance
Financial statements
173
Consolidated statement of comprehensive income
for the year ended 31 December 2022
Profit for the year
Other comprehensive income/(expense):
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
Deficit on revaluation of other investment
Total items that will not be reclassified to profit or loss
Other comprehensive income/(expense) 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 177 to 225 form an integral part of these consolidated financial statements.
Notes
2022
£m
19.5
2021
£m
260.7
30
10
17
182.9
182.9
(128.3)
(128.3)
(24.7)
8.6
(2.6)
(18.7)
164.2
183.7
182.3
1.4
31.2
(10.9)
–
20.3
(108.0)
152.7
141.3
11.4
Entain plc | Annual Report 2022 174
Consolidated balance sheet
At 31 December 2022
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
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
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
2022
£m
2021
£m
13
13
15
16
17
18
26
10
30
18
26
19
20
27
22
23
24
26
26
23
22
10
24
26
28
35
3,979.2
2,677.7
507.2
–
53.5
38.6
0.2
157.3
63.8
7,477.5
500.3
30.7
72.9
658.5
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
1,262.4
1,107.4
8,739.9
7,252.0
(719.8)
(200.5)
(65.1)
(424.9)
(45.3)
(20.6)
(79.2)
(208.8)
(695.8)
(205.9)
(78.2)
(121.1)
(59.1)
(43.5)
–
(36.1)
(1,764.2)
(1,239.7)
(2,689.1)
(215.8)
(495.4)
(5.4)
(253.4)
(3,659.1)
(2,161.3)
(215.5)
(408.0)
(6.4)
(52.6)
(2,843.8)
(5,423.3)
(4,083.5)
3,316.6
3,168.5
4.8
1,207.3
2,527.4
240.2
(846.9)
3,132.8
183.8
3,316.6
4.8
1,207.3
2,527.4
63.4
(635.8)
3,167.1
1.4
3,168.5
The financial statements on pages 172 to 225 were approved by the Board of Directors on 9 March 2023 and signed on its behalf by
J Nygaard-Andersen
Chief Executive Officer
R Wood
Deputy Chief Executive Officer/Chief Financial Officer
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
175
Consolidated statement of changes in equity
for the year ended 31 December 2022
Issued
share
capital
£m
Share
premium
£m
Merger
Reserve
£m
Translation
reserve1
£m
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
–
–
–
–
–
–
–
–
–
–
–
–
At 31 December 2021
4.8
1,207.3
2,527.4
At 1 January 2022
4.8
1,207.3
2,527.4
Profit for the year
Other comprehensive income
Total comprehensive income
Share-based payments charge
Business combinations (note 32)
Recognition of put liability
Purchase of non-controlling
interests (note 35)
Equity dividends (note 11)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
At 31 December 2022
4.8
1,207.3
2,527.4
191.7
–
(128.3)
(128.3)
–
–
–
–
–
63.4
63.4
–
176.8
176.8
–
–
–
–
–
240.2
Retained
earnings
£m
Equity
shareholders’
funds
£m
(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
–
–
(635.8)
3,167.1
(635.8)
3,167.1
24.2
158.1
182.3
18.3
–
(181.2)
(3.7)
24.2
(18.7)
5.5
18.3
–
(181.2)
(3.7)
(50.0)
(846.9)
Non-
controlling
Interests
(note 35)
£m
52.3
11.4
–
11.4
–
–
14.2
(52.0)
(24.5)
1.4
1.4
(4.7)
6.1
1.4
–
178.9
–
2.1
Total
Shareholders’
equity
£m
3,081.5
260.7
(108.0)
152.7
0.7
6.9
(35.8)
(13.0)
(24.5)
3,168.5
3,168.5
19.5
164.2
183.7
18.3
178.9
(181.2)
(1.6)
(50.0)
3,132.8
–
(50.0)
183.8
3,316.6
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 177 to 225 form an integral part of these consolidated financial statements.
Entain plc | Annual Report 2022
176
Consolidated statement of cash flows
for the year ended 31 December 2022
Cash generated by operations
Income taxes paid
Net finance expense paid
Net cash generated from operating activities
Cash flows from investing activities:
Acquisitions1
Cash acquired on business combinations
Cash disposed on sale of business
Dividends received from associates
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
Repayment of borrowings on acquisition
Subscription of funds from non-controlling interests
Settlement of derivative financial instruments
Settlement of other financial liabilities
Payment of lease liabilities
Dividend paid to shareholders
Dividend paid to non-controlling interests
Net cash used in financing activities
Net increase/(decrease) 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
2022
£m
846.9
(106.1)
(100.6)
640.2
(738.6)
29.9
–
3.6
(129.9)
(82.1)
–
–
(175.1)
(1,092.2)
–
838.4
(109.0)
(162.8)
174.3
41.6
(32.9)
(83.0)
(50.0)
–
616.6
164.6
6.8
487.1
658.5
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)
–
–
(19.1)
(130.7)
(87.9)
–
(24.5)
(30.4)
(247.9)
(14.8)
749.8
487.1
1. Included within cash flows from acquisitions is £1.7m (2021: £nil) relating to the purchase of minority holdings in Scout Gaming AB and Global Gaming Limited.
The notes on pages 177 to 225 form an integral part of these consolidated financial statements.
Financial statements Entain plc | Annual Report 2022 Overview
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Governance
Financial statements
177
Notes to the consolidated financial statements
for the year ended 31 December 2022
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 2022 were authorised for issue in accordance
with a resolution of the directors on 9 March 2023.
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
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, the post balance sheet events disclosed in note 35 and the principal risks and
uncertainties. 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, which have been run individually and in combination, and include
but are not limited to legislation changes impacting the Group’s Online business and severe data privacy and cyber security breaches.
These forecasts are not reliant on any refinancing occurring in the going concern assessment period.
Despite the net current liability position, given the level of the Company and Group’s available cash of £0.3bn post Bet City acquisition,
available financing facilities (including an undrawn revolving credit facility of £0.5bn) 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 Company and Group will have adequate financial resources to continue
in operational existence for twelve months from the date of signing this report 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 2022 the Group has applied, for the first time, certain standards, interpretations and amendments. The adoption
of the following standards and amendments to standards did not have a material impact on the current period or any prior period
upon transition:
– IAS 15 Property, Plant and Equipment; amendments to the definition of sales proceeds and related costs;
– IAS 37 Provisions, Contingent Liabilities and Contingent Assets; amendments to the definition of costs to fulfil an onerous contract;
– IAS 41 Agriculture: amendments to the measurement techniques for biological assets;
– IFRS 3 Business Combinations; updating a reference to the Conceptual Framework.
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.
Entain plc | Annual Report 2022 178
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
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:
– separately disclosed items (note 6).
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 2022 the Group separately disclosed a net charge on continuing operations of £218.9m including £116.9m 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.
4.3 Other accounting policies
Estimates
Included within the financial statements are a number of areas where estimation is required.
Management believes that the area where this is most notable within the financial statements is the accounting for business
combinations (note 32).
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. The area of most notable
estimation within the fair value exercise relates to separately identifiable intangible assets including brands, customer lists, and licences.
These estimates also require inputs and assumptions to be applied within the relief from royalty calculation of fair values with the more
significant assumptions relating to 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.
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. On the current year acquisitions, any
non-controlling interests where put options are in place are recognised using the present access method where the Group assesses
that the non-controlling shareholder has present access to the returns associated with their equity interests.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
179
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
‘Put’ options over the equity of subsidiary companies
The potential cash payments related to put options issued by the Group over the equity of subsidiary companies are accounted for as
financial liabilities. The amounts that may become payable under the option on exercise are initially recognised at the present value of the
expected gross obligation with the corresponding entry being recognised in retained earnings. Such options are subsequently measured
at amortised cost, using the effective interest rate method, in order to accrete the liability up to the amount payable under the option
at the date at which it first becomes exercisable. The present value of the expected gross obligation is reassessed at the end of each
reporting period and any changes are recorded in the income statement. In the event that an option expires unexercised, the liability
is derecognised with a corresponding adjustment to retained earnings.
Intangible assets
Intangible assets acquired separately are capitalised at cost and those acquired as part of a business combination are capitalised
separately from goodwill. 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. Indefinite lived assets are not amortised and
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.
A summary of the policies applied to the Group’s intangible assets is as follows:
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 plan holds assets separately from the Group. The pension cost relating to the plan is 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 plan, 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 there are no substantive restrictions on the
return of residual plan assets in the event of a winding up of the plan after all member obligations have been met.
The Group’s contributions to defined contribution scheme 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 this plan, such estimates are subject to
uncertainty. See note 30 for details on sensitivity analysis performed around these estimates.
The Gala Coral Pension Plan has 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.
The Ladbrokes Pension Plan was bought-out in 2021. Further details are given in note 30.
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.
Entain plc | Annual Report 2022 180
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
Impairment (continued)
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 cash flow and profit projections as well as industry observed multiples and publicly observed share prices
for similar betting and gaming 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 Licenced 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, being
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.
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.
Financial statements Entain plc | Annual Report 2022 Overview
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Governance
Financial statements
181
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
Property, plant and equipment (continued)
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 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 derecognised. 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 (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 are matched by an equal and opposite amount within cash and cash equivalents.
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.
Entain plc | Annual Report 2022 182
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
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$).
At the reporting date, the assets and liabilities of non-sterling subsidiaries are translated into Pounds Sterling (£) at the rate of exchange
ruling at the balance sheet date and their cash flows are translated at the weighted average exchange rates for the year. The post-tax
exchange differences arising on the retranslation are taken directly to other comprehensive income.
Transactions in foreign currencies are initially recorded in the subsidiary’s functional currency and translated at the foreign currency rate
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the foreign
currency rate of exchange ruling at the balance sheet date.
All foreign currency translation differences are taken to the consolidated income statement. Non-monetary items that are measured
at historical cost in a foreign currency are translated using the exchange rate at the date of the initial transaction. Non-monetary items
measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined.
On disposal of a foreign entity, the deferred cumulative retranslation differences previously recognised in equity relating to that particular
foreign entity are recognised in the consolidated income statement as part of the profit or loss on disposal.
The following exchange rates were used in 2022 and 2021:
Currency
Euro (€)
US Dollar ($)
Australian Dollar (A$)
Income tax
2022
2021
Average
Year end
Average
Year end
1.175
1.245
1.788
1.128
1.208
1.775
1.159
1.375
1.832
1.190
1.354
1.862
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.
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Governance
Financial statements
183
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
Income tax (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 or loss except to the extent that they relate to items recognised in other comprehensive
income or directly in equity, in which case they are 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.
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 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 2022 judgement has been applied in the Group’s accounting for Greek tax and further disclosure
is given in note 33.
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 sporting event or casino gaming machine roulette or slots spin. 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, which are not significant in the context of Group 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
broadcasting rights, and 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.
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).
Entain plc | Annual Report 2022 184
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
4 Summary of significant accounting policies (continued)
4.3 Other accounting policies (continued)
Share-based payment transactions (continued)
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).
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 Presentation of Financial Statements and IFRS Practice Statement 2
1 January 2023
IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors
IAS 12 Income Taxes
Definition of Accounting Estimates
Deferred Tax related to assets and liabilities arising from
a single transaction
IFRS 17 Insurance Contracts
Original issue
IFRS 16 Leases
Lease liability in a sale and leaseback transaction
IAS 1 Presentation of Financial Statements Classification of liabilities as current or non-current
IFRS 10 Consolidated Financial Statements
IAS 28 Investments in Associates and Joint
Ventures
Non-current liabilities regarding long-term debt with covenants
Sale or contribution of assets between an investor and its associate
or joint venture
Sale or contribution of assets between an investor and its associate
or joint venture
1 January 2023
1 January 2023
1 January 2023
1 January 2024
1 January 2024
Date deferred
Date deferred
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.
– Online: comprises betting and gaming activities from online and mobile operations. Sports Brands include bwin, Coral, Crystalbet,
Eurobet, Ladbrokes, Sportingbet, SuperSport, and Sport Interaction; 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, Italy, and Croatia;
– 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.
Financial statements Entain plc | Annual Report 2022 Overview
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Governance
Financial statements
185
5 Segment information (continued)
The Executive Management Team of the Group has chosen to assess the performance of operating segments based on a measure
of net NGR, EBITDAR, EBITDA, and operating profit with finance costs and taxation considered for the Group as a whole. See page 71
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.
The segment results for the year ended 31 December were as follows:
2022
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 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
3,050.5
(52.0)
2,998.5
1,829.6
1,254.2
Retail
£m
1,277.8
–
1,277.8
860.0
852.1
All other
segments
£m
New
opportunities
£m
Corporate
£m
25.1
–
25.1
25.1
25.0
–
–
–
–
(2.4)
–
–
–
–
–
(425.0)
(558.4)
(20.0)
(26.5)
(90.5)
829.2
(1.0)
828.2
(7.8)
(118.3)
293.7
(13.5)
280.2
(2.3)
(112.4)
(0.2)
–
701.9
(114.0)
587.9
165.5
(57.4)
108.1
5.0
(0.1)
4.9
–
(2.7)
0.4
2.6
(0.7)
1.9
(28.9)
(0.2)
(29.1)
(0.3)
(4.5)
(90.5)
(0.5)
(91.0)
(8.8)
(0.2)
(0.4)
(193.9)
(34.3)
–
(34.3)
(293.9)
(41.1)
(335.0)
Elimination
of internal
revenue
£m
(4.5)
–
(4.5)
–
–
–
–
–
–
–
–
–
–
–
–
Total
Group
£m
4,348.9
(52.0)
4,296.9
2,714.7
2,128.9
(1,120.4)
1,008.5
(15.3)
993.2
(19.2)
(238.1)
(194.1)
541.8
(213.2)
328.6
(225.7)
102.9
(70.0)
32.9
(13.4)
19.5
1. Included within NGR are amounts of £65.6m (2021: £82.6m) in relation to online poker services and £25.1m (2021: £20.5m) 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.
Entain plc | Annual Report 2022 186
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
5 Segment information (continued)
2021
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 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
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)
Elimination
of internal
revenue
£m
(4.1)
–
(4.1)
–
–
–
–
–
–
–
–
–
–
–
–
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. 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 and Canada.
3. Non-current assets excluding other financial assets, deferred tax assets and retirement benefit assets.
2022
2021
Revenue
£m
2,032.7
463.0
472.6
968.7
359.9
4,296.9
Non-current
assets3
£m
3,022.3
528.8
523.3
2,922.3
259.5
7,256.2
Revenue
£m
1,754.5
416.7
392.4
1,006.3
260.1
3,830.0
Non-current
assets3
£m
3,007.2
507.0
483.0
1,807.0
103.6
5,907.8
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
187
6 Separately disclosed items
Amortisation of acquired intangibles1
Furlough2
Corporate transaction costs3
Restructuring costs4
Legal and onerous contract provisions5
Impairment loss6
Bridging loan fees/issue costs write-off7
Loss/(profit) on disposal of property, plant and equipment8
Movement in fair value of contingent consideration9
Integration costs10
Tax litigation/one-off legislative impacts11
Other one-off items12
Change of deferred tax rate in intangible assets
Separately disclosed items for the year from continuing operations
Separately disclosed items for the year from discontinued operations (note 21)
Total before tax
Separately disclosed items for the year after discontinued operations
2022
Tax Impact
£m
(16.5)
(8.6)
(0.6)
(1.4)
(0.8)
–
–
–
–
–
–
–
–
(27.9)
–
(27.9)
£m
116.9
45.5
23.9
11.8
8.1
7.0
5.7
1.0
(1.0)
–
–
–
–
218.9
13.4
232.3
204.4
2021
Tax Impact
£m
(24.6)
–
(0.1)
–
(2.1)
–
(1.0)
1.0
–
(1.9)
7.8
1.3
47.1
27.5
–
27.5
£m
144.2
–
9.4
–
26.2
3.3
5.8
(1.9)
6.1
17.3
(80.2)
3.9
–
134.1
9.3
143.4
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, Neds, Enlabs, Avid, and SuperSport.
2. Voluntary repayment of certain amounts received by the Group under the Government Coronavirus Job Retention Scheme (“Furlough Scheme”).
3. Transaction costs associated with the M&A activity including the acquisition of SuperSport, Avid and Klondaika (see note 32).
4. Costs associated with the Group’s restructuring program Evolve.
5. Relates primarily to costs associated with certain litigation and legal claims and regulatory settlements involving the Entain Group.
6. Non-cash impairment charge against closed shops in its retail estates.
7. Fees incurred in respect of acquisition bridging loan which was subsequently refinanced. Prior year relates to issue costs written off on the refinancing of term loans
and the Group’s revolving credit facility.
Income reflecting a change in the estimated likely payments under contingent consideration arrangements net of discount unwind.
8. Loss on the disposal of certain assets and subsidiaries.
9.
10. During the prior year, the Group incurred final costs associated with the integration of the Ladbrokes Coral Group and the legacy Entain businesses.
11. During the prior year, the Group recognised a credit in respect of the 2010/11 Greek tax case following a ruling by the Athens Administrative Court of Appeal in favour
of the Group (see note 33 for more details).
12. During the prior year, the Group incurred a number of one-off costs associated with Covid-19.
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).
Entain plc | Annual Report 2022 188
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
7 Administrative costs
Profit before tax, net finance expense and separately disclosed items has been arrived at after charging:
Betting and gaming taxes and duties
Revenue share arrangements (including content providers)
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
2022
£m
909.8
555.6
113.3
3.5
2021
£m
837.3
440.3
116.1
0.5
1,582.2
1,394.2
652.0
80.0
176.6
585.8
173.1
65.0
246.3
575.4
63.1
137.5
584.3
169.0
53.8
206.1
1,978.8
1,789.2
213.2
3,774.2
128.3
3,311.7
During 2021 the Group benefited from £48.7m 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. No government support was received in 2022.
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
Interest on term loans, bonds and bank facilities
Interest on lease liabilities1
Bridging loan fees/issue costs write off (note 6)
Total finance expense
Interest receivable
(Losses)/gains arising on financial derivatives
(Losses)/gains arising on foreign exchange on debt instruments
Net finance (expense)/income
1. Interest on lease liabilities of £12.8m (2021: £13.8) is net of £0.2m of sub-let interest receivable (2021: £0.2m).
2022
£m
2021
£m
0.6
2.6
0.5
3.7
2022
£m
(76.2)
(12.8)
(5.7)
(94.7)
4.3
(23.1)
(112.2)
(225.7)
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
Financial statements Entain plc | Annual Report 2022 Overview
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Governance
Financial statements
189
9 Employee staff costs
The average monthly number of employees (including executive directors) was:
Online
Retail
Other
Corporate
The number of people employed by the Group at 31 December 2022 was 28,940 (2021: 25,554).
Wages and salaries
Redundancy costs1
Social security costs
Other pension costs (note 30)2
Share-based payments (note 31)
2022
Number
2021
Number
11,868
14,184
390
1,012
27,454
8,929
14,363
428
918
24,638
2022
£m
560.6
6.2
49.9
18.6
19.2
654.5
2021
£m
503.1
6.0
41.6
16.3
12.3
579.3
1. Included within redundancy costs are £2.5m (2021: £3.4m) which are included within separately disclosed items.
2. Included within other pension costs are £nil (2021: £0.5m) 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.
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 for 2021 are stated net of furlough receipts as discussed in note 7.
10 Income tax
Analysis of expense for the year:
Current income tax:
– current tax charge
– 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 (credited)/charged directly to other comprehensive income
2022
£m
91.4
(7.9)
(17.5)
4.0
70.0
70.0
–
70.0
(8.6)
2021
£m
97.4
(6.8)
32.3
(5.3)
117.6
117.6
–
117.6
10.9
Entain plc | Annual Report 2022 190
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
10 Income tax (continued)
A reconciliation of income tax expense applicable to profit (2021: profit) before tax at the UK statutory income tax rate to the income tax
expense for the years ended 31 December 2022 and 31 December 2021 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:
– Higher/(lower) effective tax rates on
overseas earnings
– Non-deductible expenses
– Fair value adjustment to contingent consideration
– Impact of additional 50% deduction for marketing
expenditure in Gibraltar
– Increase in unrecognised tax losses relating to US
joint venture
– Increase/(decrease) in other unrecognised tax losses
– Increase/(decrease) 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
– Current tax
Underlying
£m
321.8
–
321.8
Separately
disclosed
(note 6)
£m
(218.9)
(13.4)
(232.3)
61.1
(44.1)
4.6
25.9
–
(20.3)
40.7
(12.1)
0.4
–
0.7
4.8
(7.9)
6.8
9.3
(0.6)
–
–
1.0
–
–
0.5
(0.8)
–
102.9
(13.4)
89.5
17.0
11.4
35.2
(0.6)
(20.3)
40.7
(11.1)
0.4
–
1.2
4.0
(7.9)
Income tax expense
97.9
(27.9)
70.0
Deferred tax
Deferred tax at 31 December relates to the following:
2022
Total
£m
Underlying
£m
527.3
(5.6)
521.7
Separately
disclosed
(note 6)
£m
(134.1)
(9.3)
(143.4)
2021
Total
£m
393.2
(14.9)
378.3
99.1
(27.2)
71.9
(13.3)
2.5
–
(18.4)
34.0
16.1
(0.4)
(18.8)
0.4
(4.3)
(6.8)
(6.8)
2.6
4.5
1.2
–
–
0.4
–
47.1
(0.1)
(1.0)
–
(10.7)
7.0
1.2
(18.4)
34.0
16.5
(0.4)
28.3
0.3
(5.3)
(6.8)
27.5
117.6
Property, plant and equipment
Intangible assets
Retirement benefit assets
Losses
Other temporary difference1
Deferred tax liabilities/(assets)2
Deferred tax
liabilities
Deferred tax
assets
2022
£m
–
410.6
22.3
–
62.5
495.4
2021
£m
–
333.0
33.3
–
41.7
408.0
2022
£m
(45.1)
(25.1)
–
(56.9)
(30.2)
2021
£m
(62.3)
(27.3)
–
(27.0)
(24.8)
(157.3)
(141.4)
1. The deferred tax liability comprises a provision for tax on unremitted earnings from overseas subsidiaries of £61.8m (2021: £40.8m) and other temporary differences of £0.7m
(2021: £0.9m). The deferred tax asset comprises deferred interest relief of £22.9m (2021: £20.9m) and other temporary differences of £7.3m (2021: 3.9m).
2. Deferred tax assets and liabilities have been offset only where there is a legally enforceable right to do so, and the assets and liabilities relate to the same taxable entity
or tax grouping.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
191
10 Income tax (continued)
Movements in deferred tax during the year ended 31 December 2022 were recognised as follows:
Net deferred tax liabilities/(assets)
At 31 December 2020
Income statement
Other comprehensive income
Arising on business combinations (note 32)
Exchange adjustment
At 31 December 2021
Income statement
Other comprehensive income
Arising on business combinations (note 32)
Settlement of tax on pension asset
Exchange adjustment
At 31 December 2022
Amounts presented on the consolidated balance sheet:
Deferred tax liabilities
Deferred tax assets
Net deferred tax liability
Property,
plant and
equipment
£m
Intangible
assets
£m
Retirement
benefit assets
£m
(56.2)
(6.9)
–
–
0.8
(62.3)
17.7
–
–
–
(0.5)
(45.1)
262.5
24.2
–
25.0
(6.0)
305.7
(14.5)
–
85.4
–
8.9
385.5
22.6
(0.2)
10.9
–
–
33.3
0.1
(8.6)
–
(2.5)
–
22.3
Losses
£m
(27.2)
(0.9)
–
–
1.1
(27.0)
(28.7)
–
–
–
(1.2)
(56.9)
Other
temporary
differences
£m
0.2
10.8
–
7.2
(1.3)
16.9
11.9
–
0.5
–
3.0
32.3
2022
£m
495.4
(157.3)
338.1
Total
£m
201.9
27.0
10.9
32.2
(5.4)
266.6
(13.5)
(8.6)
85.9
(2.5)
10.2
338.1
2021
£m
408.0
(141.4)
266.6
The standard rate of UK corporation tax throughout the period was 19.0%.
The deferred tax assets and liabilities are measured at the tax rates of the respective territories which are expected to apply in 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 assets have been recognised based on the ability of future offset against deferred tax liabilities
or against future taxable profits, to the extent they relate to the same taxable entity. The assessment of future taxable profits is based
on forecasts and assumptions consistent with those used for impairment testing as set out in note 14.
As at 31 December 2022, the Group had £1,764.6m (2021: £1,621.6m) of gross unrecognised deferred tax assets. This unrecognised
deferred tax asset consists of £213.3m of capital losses (2021: £213.3m), £1,538.3m of income losses (2021: £1,408.7m), £13.0m of
deferred interest relief (2021: £nil) and no amount of other deferred tax assets (2021: £0.4m). These assets arise in entities that do not
have deferred tax liabilities they can be set against, and where there are either no forecast future taxable profits, or the potential future
profits are not sufficiently certain to support the deferred tax asset recognition.
There are no significant unrecognised taxable temporary differences associated with investments in subsidiaries.
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. The 25% rate has therefore been used in
measuring the UK deferred tax items at the date of this Report. Deferred tax on retirement benefit assets is provided at 35%, which is
the rate applicable to refunds.
In the Gibraltar Budget on 20 July 2021, the Chief Minister announced a temporary enhanced tax deduction for qualifying business
marketing and promotion costs, which applied for the years ended 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 £20.3m (2021: credit of £18.4m) to the tax
charge. In a subsequent Gibraltar Budget on 28 June 2022, the Chief Minister unexpectedly announced the retrospective removal of this
enhanced deduction, except in very limited circumstances. This change had not been substantively enacted by the balance sheet date
and so is not reflected in the tax charge for the year.
The Group’s future tax charge, and effective tax rate, could be affected by a number of factors including the geographic mix of profits,
changes to statutory corporate tax rates and the impact of continuing global tax reforms.
The Group continues to monitor the ongoing work of the OECD on the taxation of the digital economy and specifically the minimum level
of taxation for multinational groups (“Pillar Two”). Each country is at a different stage in their process for adopting these rules. The UK has
issued initial legislation in draft form and the EU adopted a Pillar Two Directive on 22 December 2022, which is expected to be transposed
into legislation by each of the member states during 2023. Once implemented, we anticipate the rules will apply to the Group from the
year ended 31 December 2024. The Group expects this to increase in the future Effective Tax Rate on Underlying items, the extent of
which will depend on how the rules are ultimately implemented.
Entain plc | Annual Report 2022
192
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
11 Dividends
Pence per share
Interim dividend paid
2022
pence
8.5
2021
pence
–
2022
Shares in
issue
number
588.8
2021
Shares in
issue
number
n/a
A second interim dividend of 8.5 pence (2021: nil pence) per share, amounting to £50.0m (2021: £nil) in respect of the year ended
31 December 2022 was proposed by the Directors on 9 March 2023. The estimated total amount payable in respect of the final
dividend is based on the expected number of shares in issue on 9 March 2023. There are no income tax implications for the Group
and Company arising from the proposed second interim dividend. The 2022 interim dividend of 8.5 pence per share (£50.0m)
was paid on 16 September 2022.
No dividends were paid out to non-controlling interests (2021: £24.5m).
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 £24.2m
(2021: £249.3m) by the weighted average number of shares in issue during the year of 588.2m (2021: 585.7m).
At 31 December 2022, there were 588.2m €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
Losses/(gains) arising from financial instruments
Losses/(gains) 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
2022
588.2
4.5
592.7
2022
£m
24.2
37.6
(13.4)
23.1
112.2
(2.4)
201.4
358.5
358.5
–
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)
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
2022
2021
2022
2021
6.4
(2.3)
4.1
6.3
(2.2)
4.1
45.1
(2.5)
42.6
44.7
(2.5)
42.2
60.9
–
60.9
60.5
–
60.5
54.3
(1.0)
53.3
53.8
(1.0)
52.8
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 93.9p (2021: 81.9p) and a diluted adjusted earnings
per share of 93.2p (2021: 81.1p) from continuing operations.
Financial statements Entain plc | Annual Report 2022 Overview
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Governance
Financial statements
193
13 Goodwill and intangible assets
Cost
At 1 January 2021
Exchange adjustment
Additions
Additions from business combinations
Disposals
Reclassification
At 31 December 2021
Exchange adjustment
Additions
Additions from business combinations (note 32)
Disposals
Reclassification
At 31 December 2022
Accumulated amortisation and impairment
At 1 January 2021
Exchange adjustment
Amortisation charge
Impairment charge
Disposals
At 31 December 2021
Exchange adjustment
Amortisation charge
Impairment charge
Disposals
At 31 December 2022
Net book value
At 31 December 2021
At 31 December 2022
Goodwill
£m
Licences
£m
Software
£m
Customer
relationships
£m
Trade-marks &
brand names
£m
3,352.2
(132.8)
–
273.1
–
–
3,492.5
153.6
–
622.3
–
–
4,268.4
291.1
(15.6)
–
–
–
275.5
13.7
–
–
–
289.2
15.7
(0.3)
12.8
22.3
(0.8)
–
49.7
7.1
–
147.6
(0.5)
–
203.9
7.4
(0.1)
6.8
–
(0.8)
13.3
0.3
12.7
0.5
(0.5)
26.3
539.3
(28.0)
96.7
21.1
(8.2)
1.1
622.0
28.3
129.9
7.4
(13.9)
(1.0)
772.7
332.0
(22.3)
102.7
1.6
(8.2)
405.8
19.8
109.1
–
(13.9)
520.8
948.6
(22.5)
–
78.9
–
–
1,005.0
34.1
–
205.9
–
–
1,954.0
(32.7)
–
96.2
–
–
2,017.5
44.9
–
206.0
–
–
1,245.0
2,268.4
871.6
(19.4)
89.8
–
–
942.0
23.6
52.4
–
–
141.2
(8.6)
48.0
–
–
180.6
11.7
54.9
–
–
Total
£m
6,809.8
(216.3)
109.5
491.6
(9.0)
1.1
7,186.7
268.0
129.9
1,189.2
(14.4)
(1.0)
8,758.4
1,643.3
(66.0)
247.3
1.6
(9.0)
1,817.2
69.1
229.1
0.5
(14.4)
1,018.0
247.2
2,101.5
3,217.0
3,979.2
36.4
177.6
216.2
251.9
63.0
227.0
1,836.9
2,021.2
5,369.5
6,656.9
At 31 December 2022, the Group had not entered into contractual commitments for the acquisition of any intangible assets (2021: £nil).
Included within trade-marks and brand names are £1,398.4m (2021: £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 and online licences.
Software relates to the cost of acquired software, through purchase or business combination, and the capitalisation of internally
developed software. Additions of £128.8m (2021: £96.7m) include £58.0m of internally capitalised costs (2021: £46.0m).
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, Enlabs, Sport Interaction
and SuperSport businesses.
Entain plc | Annual Report 2022 194
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
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 Licenced 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% (2021: between 0% and 2%) 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 eight-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. 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, which have increased year-on-year due to increasing interest rates, and the associated carrying value
of goodwill by CGU is as follows:
Goodwill
Digital
UK Retail
Australia
European Retail
European Digital
Enlabs
Avid
SuperSport
All other segments
2022
%
2021
%
2022
£m
2021
£m
12.6
12.6
13.5
9.5 – 13.3
9.5 – 13.3
11.8
12.9
11.8
12.4
10.9
10.9
11.7
9.3 – 11.5
10.9 – 11.5
12.7
n/a
n/a
10.9
2,146.5
76.4
347.5
161.5
350.4
209.6
84.2
536.7
66.4
3,979.2
2,121.5
76.4
331.2
153.0
332.0
187.7
n/a
n/a
15.2
3,217.0
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 £7.0m (2021: £3.3m) primarily on closed retail shops.
Sensitivity analysis
A reduction to 0% for the terminal growth rate applied to the cash flows (with other assumptions remaining constant) would not result
in a material impairment to any CGU.
A 5% decrease in all cash flows, which could be represented by an increase in the cost base from changing behaviour and the impact
of group commitment around ESG amongst others, used in the discounted cash flow model for the value in use calculation (with other
assumptions remaining constant) would not result in a material 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 not result in a material impairment to any CGU.
No other reasonably possible change in assumptions to the CGUs would cause any additional impairment.
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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
Combined
Digital/
UK Retail
Impairment
review
Eurobet
Impairment
review
Belgium
Impairment
review
UK 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
Avid
ROI Impairment review
Eurobet Digital Impairment review
Eurobet Retail Impairment review
Belgium Digital Impairment review
Belgium Retail Impairment review
Australia Impairment review
Enlabs Impairment review
Avid Impairment review
SuperSport
SuperSport Impairment review
Entain plc | Annual Report 2022 196
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
15 Property, plant and equipment
Cost
At 1 January 2021
Exchange adjustment
Additions
Additions from business combinations
Disposals
Reclassification
At 31 December 2021
Exchange adjustment
Additions
Additions from business combinations (note 32)
Disposals
Reclassification
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Exchange adjustment
Depreciation charge
Impairment
Disposals
At 31 December 2021
Exchange adjustment
Depreciation charge
Impairment
Disposals
Reclassification
At 31 December 2022
Net book value
At 31 December 2021
At 31 December 2022
Land and
buildings
£m
Plant and
equipment
£m
Fixtures
and fittings
£m
Leased
assets
£m
26.5
(0.6)
14.9
0.2
(14.2)
–
26.8
0.7
24.9
0.2
(10.4)
(1.6)
40.6
14.5
(0.6)
11.6
–
(14.2)
11.3
0.5
11.4
–
(10.3)
–
12.9
89.4
(2.7)
16.8
2.0
(1.9)
(1.1)
102.5
3.2
50.6
3.2
(20.2)
1.9
141.2
25.4
(2.1)
16.9
–
(1.9)
38.3
2.7
23.5
0.1
(20.0)
–
44.6
181.8
(12.0)
38.1
0.2
(19.8)
–
188.3
7.0
11.1
4.4
(16.1)
42.9
237.6
53.9
(10.6)
28.7
–
(19.8)
52.2
2.0
26.0
1.9
(16.1)
21.7
87.7
Total
£m
827.2
(20.9)
121.8
3.3
(40.4)
(1.1)
889.9
16.1
148.4
17.3
(50.2)
1.0
529.5
(5.6)
52.0
0.9
(4.5)
–
572.3
5.2
61.8
9.5
(3.5)
(42.2)
603.1
1,022.5
263.2
(2.0)
62.5
1.7
(4.5)
320.9
4.2
65.0
4.5
(2.8)
(21.7)
370.1
357.0
(15.3)
119.7
1.7
(40.4)
422.7
9.4
125.9
6.5
(49.2)
–
515.3
15.5
27.7
64.2
96.6
136.1
149.9
251.4
233.0
467.2
507.2
At 31 December 2022, the Group had not entered into contractual commitments for the acquisition of any property, plant and equipment
(2021: £nil).
Included within fixtures, fittings and equipment are assets in the course of construction which are not being depreciated of £10.6m
(2021: £8.3m), relating predominantly to self-service betting terminals and the new point of sale system in UK Retail.
An impairment charge of £6.5m (2021: £1.7m) has been made against closed retail shops and office buildings included within leased
assets in the year. See notes 6 and 14 for further details.
During the year, the Group reclassified certain leased assets following their outright purchase.
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197
15 Property, plant and equipment (continued)
Analysis of leased assets:
Cost
At 1 January 2021
Exchange adjustment
Additions
Additions from business combinations
Disposals
At 31 December 2021
Exchange adjustment
Additions
Additions from business combinations
Disposals
Reclassification
At 31 December 2022
Accumulated depreciation
At 1 January 2021
Exchange adjustment
Depreciation charge
Impairment
Disposals
At 31 December 2021
Exchange adjustment
Depreciation charge
Impairment
Disposals
Reclassification
At 31 December 2022
Net book value
At 31 December 2021
At 31 December 2022
16 Interest in joint venture
Cost
At 1 January 2021
Additions
Exchange adjustment
Share of loss after tax
At 31 December 2021
Additions
Exchange adjustment
Share of loss after tax
Share of other comprehensive loss
Contributions to be made
At 31 December 2022
Land and
buildings
£m
Plant and
equipment
£m
476.2
(5.5)
51.1
0.9
(2.0)
520.7
5.0
60.0
9.5
(2.0)
–
593.2
249.8
(1.9)
52.2
1.7
(2.0)
299.8
4.1
55.1
4.5
(2.0)
–
361.5
53.3
(0.1)
0.9
–
(2.5)
51.6
0.2
1.8
–
(1.5)
(42.2)
9.9
13.4
(0.1)
10.3
–
(2.5)
21.1
0.1
9.9
–
(0.8)
(21.7)
8.6
Total
£m
529.5
(5.6)
52.0
0.9
(4.5)
572.3
5.2
61.8
9.5
(3.5)
(42.2)
603.1
263.2
(2.0)
62.5
1.7
(4.5)
320.9
4.2
65.0
4.5
(2.8)
(21.7)
370.1
220.9
231.7
30.5
1.3
251.4
233.0
Share of joint
venture’s net
assets
£m
6.2
164.4
1.0
(161.9)
9.7
175.1
3.7
(193.9)
(0.4)
5.8
–
The joint venture represents the Group’s investment in BetMGM set up in the US in which a 50% stake is held.
Entain plc | Annual Report 2022 198
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
16 Interest in joint venture (continued)
The Group has committed to further investment in BetMGM over the course of 2023, with $75,0m additional contributions expected
($150.0m split between both joint venture partners). This will take the Group’s total investment to $630.0m ($1.26bn across both joint
venture partners).
Given the net liability position of the joint venture, the Group has recorded £5.8m of these future contributions as a liability at the year end.
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 (liabilities)/assets
Group’s share of net (liabilities)/assets
Summarised statement of comprehensive income
Revenue
Depreciation and amortisation
Other operating expenses
Income tax
Loss for the year
Group’s share of loss
2022
£m
148.6
308.7
92.4
401.1
(234.4)
(310.0)
(544.4)
(17.0)
(11.7)
(5.8)
2022
£m
1,174.8
(28.5)
(1,534.1)
–
(387.8)
(193.9)
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)
There are no contingent liabilities relating to the Group’s interest in the joint venture (2021: £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.
17 Interest in associates and other investments
Cost
At 1 January 2021
Revaluation loss
Arising on business combinations (note 32)
Additions
Share of loss after tax
Foreign exchange
At 31 December 2021
Revaluation loss
Arising on business combinations (note 32)
Dividends received
Share of loss after tax
Foreign exchange
At 31 December 2022
Share of
associates’
net assets
£m
Other
investments
£m
19.3
–
–
25.6
(0.6)
(0.1)
44.2
–
–
(3.6)
(0.2)
(0.9)
39.5
10.1
(2.3)
2.9
3.8
–
(0.3)
14.2
(5.1)
4.9
–
–
–
14.0
Total
£m
29.4
(2.3)
2.9
29.4
(0.6)
(0.4)
58.4
(5.1)
4.9
(3.6)
(0.2)
(0.9)
53.5
Revaluation loss includes £2.6m (2021: £nil) recognised through other comprehensive income with the remaining loss of £2.5m
(2021: £2.3m) recognised through profit or loss.
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199
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
Non-current liabilities
Current liabilities
Net assets
Group’s share of net assets
Revenue for the year
Profit for the year
Other comprehensive expense
Total comprehensive income/(expense)
Group’s share of total comprehensive expense
Further details of the Group’s associates are listed in note 34.
2022
£m
52.0
132.4
(2.5)
(90.1)
91.8
39.5
2021
£m
43.3
132.9
–
(72.7)
103.5
44.2
337.1
193.5
0.1
–
0.1
(0.2)
0.3
(1.2)
(0.9)
(0.6)
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 2022.
In 2021 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 prices available for their shares.
The risks associated with associate investments are 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 £14.0m (2021: £14.2m) 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
2022
£m
34.1
430.8
3.5
70.5
538.9
2022
£m
500.3
38.6
538.9
2021
£m
22.5
461.6
4.1
54.6
542.8
2021
£m
539.8
3.0
542.8
Trade and other receivables are non-interest bearing and are generally on 30-90 day terms. Trade and other 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 €34.9m (2021: €227.5m), amounts receivable from payment
service providers of £149.8m (2021: £130.8m), and other smaller items such as regulatory deposits, security deposits, rent deposits
and balances due from affiliates and partners. The Group does not perceive there to be a material credit risk against these items.
Entain plc | Annual Report 2022 200
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
19 Cash and cash equivalents
Cash and short-term deposits
2022
£m
658.5
2021
£m
487.1
Cash and cash equivalents in the consolidated statement of cash flows comprises cash at bank, overdrafts net of short-term investments
and includes £52.1m (2021: £69.4m) restricted in respect of customers.
20 Trade and other payables
Current trade and other payables comprise:
Trade payables
Other payables
Social security and other taxes
Accruals
21 Discontinued operations
2022
£m
64.4
135.2
181.0
339.2
719.8
2021
£m
66.7
112.7
208.1
308.3
695.8
During 2021, the Group disposed of its interest in its spread betting business recognising a further loss on disposal of £13.4m in 2022.
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 (charge)/credit
Loss for the year from discontinued operations after tax
2022
£m
–
–
–
–
–
(13.4)
(13.4)
–
(13.4)
2021
£m
11.0
(6.9)
4.1
(9.7)
(5.6)
(9.3)
(14.9)
–
(14.9)
Separately disclosed items consist of £13.4m (2021: provision of £9.3m) relate to ongoing costs of disposal of the Intertrader business
and the settlement of various associated legal matters.
22 Lease liabilities
Current
Lease liabilities
Non-current
Lease liabilities
Total lease liabilities
2022
£m
2021
£m
65.1
78.2
215.8
280.9
215.5
293.7
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 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.
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22 Lease liabilities (continued)
The maturity analysis of lease liabilities at 31 December 2022 is as follows:
2022
Net present value
2021
Net present value
Within
1 year
£m
65.1
78.2
Minimum lease payments due
1-2 years
£m
2-5 years
£m
> 5 years
£m
Total
£m
56.2
106.5
53.1
280.9
52.4
103.6
59.5
293.7
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.
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 (2021: £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:
2022
£m
1.0
2.5
2021
£m
1.1
3.0
2022
Lease payments receivable
Interest
Present value of lease payments receivable
2021
Lease payments receivable
Interest
Present value of lease payments receivable
Operating lease commitments – Group as lessor
Within
1 year
£m
1.1
(0.1)
1.0
1.2
(0.1)
1.1
Minimum lease payments due
1-2 years
£m
2-5 years
£m
> 5 years
£m
Total
£m
0.9
(0.1)
0.8
1.7
(0.2)
1.5
1.1
(0.2)
0.9
0.7
(0.1)
0.6
0.9
(0.1)
0.8
1.1
(0.2)
0.9
4.0
(0.5)
3.5
4.7
(0.6)
4.1
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 six 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
2022
£m
0.6
1.0
0.1
1.7
2021
£m
0.5
0.7
0.1
1.3
Entain plc | Annual Report 2022 202
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
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
2022
£m
2021
£m
0.9
17.7
406.3
424.9
994.7
1,694.4
–
2,689.1
7.2
8.1
105.8
121.1
945.1
810.7
405.5
2,161.3
As at 31 December 2022 there were £515.0m (2021: £515.0m) of committed bank facilities of which £nil (2021: £nil) were drawn down
and £52.1m (2021: £75.0m) of facilities which have been utilised for letters of credit.
On 31 October 2022 the Group entered into a new $1,000m term loan which has a maturity date in October 2029. Following the issuance
of the new debt the Group entered into hedging transactions to swap the USD debt position into EUR. This new term loan replaced the
bridging loan agreement which was put in place to fund the Group’s acquisition of SuperSport (which completed in November 2022)
and financed the acquisition of BetCity in January 2023.
The Group’s senior facilities agreement contains a single financial covenant: a springing leverage covenant (subject to customary
cure rights) and solely for the benefit of the lenders under the revolving credit facility (RCF). The financial covenant is tested only in respect
of a quarter-end date where the aggregate outstanding principal amount of all loans under the RCF (excluding utilisations of the RCF
by way of letters of credit or bank guarantees) exceeds 40 per cent of the total RCF commitments as at that date. The financial covenant
requires that leverage (as defined in the senior facilities agreement) does not exceed 6.0 for quarters ending before July 2023, then 5.5
for quarters ending before July 2025, then 5.0 thereafter.
24 Provisions
At 1 January 2021
Provided
Utilised
Released
Exchange adjustment
Reclassification
At 31 December 2021
Provided
Utilised
Released
Reclassification
At 31 December 2022
Property
provisions1
£m
Restructuring
provisions2
£m
Litigation and
regulation
provisions3
£m
14.8
8.0
(9.4)
(4.7)
–
0.4
9.1
10.1
(7.5)
(4.5)
–
7.2
3.3
3.7
(6.2)
–
–
–
0.8
1.8
(2.0)
(0.6)
–
–
50.8
32.5
(34.3)
(8.1)
(3.2)
2.3
40.0
33.6
(35.9)
(1.9)
(17.0)
18.8
Total
£m
68.9
44.2
(49.9)
(12.8)
(3.2)
2.7
49.9
45.5
(45.4)
(7.0)
(17.0)
26.0
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 3.5%. The periods of vacant property commitments range from 1 to 13 years (2021: 1 to 14 years). 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.
Of the total provisions at 31 December 2022, £20.6m (2021: £43.5m) is current and £5.4m (2021: £6.4m) is non-current.
Provisions expected to be settled in greater than one year are discounted at the risk free rate.
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203
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 term loans, bank facilities, 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 in preceding years 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 uses derivative financial instruments such as interest rate swaps and caps to hedge its interest rate risk. At 31 December
2022, 50% (2021: 34%) of the Group’s post-swap debt (excluding leases) was at fixed interest rates. Following the completion of the
refinancing of the Group’s €1,125m term loans on 10/11 January 2023 and associated hedging, this proportion increased to 82%
(70% excluding the £400m bonds which are due to be repaid in September 2023).
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.
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
100 basis points increase
Profit before tax
2022
4.1
16.3
2021
3.8
15.2
At 31 December 2022, the Group had a number of financial instruments which would have been affected by the expected cessation of
USD LIBOR on 30 June 2023. The Group has taken proactive steps to eliminate any exposure to the reform of interest rate benchmarks.
In early March 2023, the Group successfully obtained consent from its lenders to change the reference rate for loans denominated in
USD – under the revolving credit facility and under the term loan facility issued in July 2021 – from USD LIBOR to a Term SOFR benchmark
rate. The Group also has one interest rate cap for which the reference rate is USD LIBOR – under the fallback protocol the reference rate
will change to a SOFR benchmark rate. These changes are not expected to have a significant impact on the Group’s interest charge
going forward compared to the position if the benchmark transition had not been required.
Foreign currency risk
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 cash flows, 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, 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 is partially offset by
the opposite exposure on the Group’s 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 cash flows of the business.
Entain plc | Annual Report 2022 204
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
25 Financial risk management objectives and policies (continued)
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 swap contracts 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 £27.7m (2021: £29.5m) and net assets by £0.8m (2021: £3.1m)
when applied to the results of year in question.
A 5% weakening in the Australian Dollar would reduce Group operating profit by £4.6m (2021: £5.6m) and net assets by £19.0m
(2021: £27.9m) 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 primary 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 2022, there were undrawn committed borrowing facilities of £515.0m
(2021: £515.0m). Total committed facilities had an average maturity of 3.7 years (2021: 3.2 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.
2022
Interest bearing loans and borrowings
Other financial liabilities
Trade and other payables
Lease liabilities
Total
2021
Interest bearing loans and borrowings
Other financial liabilities
Trade and other payables
Lease liabilities
Total
On demand
or within
1 year
£m
548.4
210.7
538.8
72.4
1,370.3
On demand
or within
1 year
£m
1-2 years
£m
2-5 years
£m
> 5 years
£m
1,310.6
56.5
–
61.6
1,428.7
1,131.2
205.5
–
116.6
1,453.3
914.5
1.7
–
59.8
976.0
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
3,904.7
474.4
538.8
310.4
5,228.3
Total
£m
2,539.4
130.3
487.7
330.5
3,487.9
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 an adjusted net debt to underlying EBITDA ratio. The ratio at 31 December 2022 was 2.8 times
(2021: 2.4 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.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
205
26 Financial instruments and fair value disclosures
The table below analyses the Group’s financial instruments into their relevant categories:
31 December 2022
Assets
Non-current:
Other investments (note 17)
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 borrowings1
Trade and other payables
Derivative financial instruments
Other financial liabilities2
Lease liabilities (note 22)
Non-current:
Interest bearing loans and borrowings
Other financial liabilities2
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
1.3
0.2
464.9
–
658.5
1,124.9
(200.5)
(424.9)
(538.8)
–
–
(65.1)
(2,689.1)
(183.3)
(215.8)
(4,317.5)
(3,192.6)
6.6
–
–
72.9
–
79.5
–
–
–
(79.2)
(208.8)
–
–
(70.1)
–
(358.1)
(278.6)
Total
£m
14.0
0.2
464.9
72.9
658.5
6.1
–
–
–
–
6.1
1,210.5
–
–
–
–
–
–
–
–
–
–
6.1
(200.5)
(424.9)
(538.8)
(79.2)
(208.8)
(65.1)
(2,689.1)
(253.4)
(215.8)
(4,675.6)
(3,465.1)
Entain plc | Annual Report 2022 206
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
26 Financial instruments and fair value disclosures (continued)
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 borrowings1
Trade and other payables
Other financial liabilities2
Lease liabilities (note 22)
Non-current:
Interest bearing loans and borrowings
Other financial liabilities2
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)
1. The fair value of interest bearing loans and borrowings at 31 December 2022 and 31 December 2021 is not materially different to their original costs.
2. Other financial liabilities include £261.7m deferred and contingent consideration (2021: £70.8m), a put liability of £180.4m (2021: £nil), £2.9m of financial guarantees
(2021: £2.6m) and £17.2m of ante-post liabilities (2021: £15.3m).
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 2022
and 31 December 2021:
Assets measured at fair value
Derivative financial instruments
Other investments
Liabilities measured at fair value
Derivative financial instruments
Other financial liabilities
Net assets/(liabilities) measured at fair value
Level 1
£m
Level 2
£m
Level 3
£m
–
5.5
5.5
–
–
–
5.5
72.9
1.8
74.7
(79.2)
–
(79.2)
(4.5)
–
5.4
5.4
–
(278.9)
(278.9)
(273.5)
2022
Total
£m
72.9
12.7
85.6
(79.2)
(278.9)
(358.1)
(272.5)
Financial statements Entain plc | Annual Report 2022 207
2021
Total
£m
57.4
12.2
69.6
Overview
Strategic report
Governance
Financial statements
26 Financial instruments and fair value disclosures (continued)
Level 1
£m
Level 2
£m
Level 3
£m
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
–
–
–
–
–
57.4
2.2
59.6
–
10.0
10.0
–
(86.1)
(86.1)
59.6
(76.1)
(16.5)
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 £72.9m (2021: asset of £57.4m) and a liability of £79.2m (2021: £nil), investments in Hui
10 and R&S Technology, designated as fair value through other comprehensive income, of £5.1m (2021: £5.1m), £1.0m (2021: £3.8m)
respectively, an investment in Scout Gaming of £0.3m (2021: £1.1m), a convertible equity instrument with Visa Inc. for £1.8m
(2021: £2.2m) and an investment fund of £4.9m (2021: £nil), all designated as fair value through profit and loss. The fair value of the
investments at 31 December 2022 and 31 December 2021 is 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 2022 contingent
consideration included within other financial liabilities was £254.9m (2021: £70.8m) arising from the Group’s in-year acquisitions of
SuperSport and Totolotek, and the historical transactions involving the Group’s operations in Africa. Included in contingent consideration
is £223.4m relating to the SuperSport acquisition, payments which are contingent on future financial performance through to 2024.
The valuation of the contingent consideration is subject to estimation uncertainty as the amount payable is based on future profitability.
Based on the current profit forecast and reasonable upside and downside sensitivities, the range of potential valuations is not expected
to be materially different from that provided for in the financial statements.
Put option liability
The amortised costs of the put option liability recognised is not materially different to fair value.
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.
Entain plc | Annual Report 2022 208
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
27 Net debt
The components of the Group’s adjusted 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 (liability)/asset)
Deposits
Balances held with payment service providers
Sub-total
Lease liabilities
Adjusted net debt including lease liabilities
2022
£m
2021
£m
658.5
487.1
(424.9)
(121.1)
(2,689.1)
(2,455.5)
(2,161.3)
(1,795.3)
(200.5)
(6.5)
43.8
149.8
(205.9)
57.4
20.3
130.8
(2,468.9)
(1,792.7)
(280.9)
(293.7)
(2,749.8)
(2,086.4)
Cash held on behalf of customers represents the outstanding balance due to customers in respect of their online gaming wallets.
28 Share capital
Authorised:
At 31 December 2021 and 31 December 2022
Issued and fully paid:
At 1 January 2021
Exercise of share options
At 31 December 2021
Exercise of share options
At 31 December 2022
Number of
€0.01
ordinary
shares
773,000,000
585,077,647
1,472,572
586,550,219
2,296,623
588,846,842
Total
€m
Total
£m
7.7
5.9
–
5.9
–
5.9
6.4
4.8
–
4.8
–
4.8
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.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
209
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 expense/(income)
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 on disposal
Depreciation of property, plant and equipment
Amortisation of intangible assets
Share based payments charge
Decrease/(increase) in trade and other receivables
Increase in other financial liabilities
(Decrease)/increase in trade and other payables
Decrease in provisions
Share of results from joint venture and associate
Pension settlement
Other
Cash generated by operations
29.2 Cash flows arising from discontinued operations:
Cash used in operating activities
Cash used in investing activities1
Net cash outflow arising from discontinued operations
1. Prior year included within cash used in investing activities is £23.3m of cash disposed with business.
2022
£m
102.9
225.7
328.6
(13.4)
315.2
7.0
1.0
125.9
229.1
19.2
44.7
2.2
(85.9)
(6.9)
194.1
7.0
(5.7)
846.9
2022
£m
(13.4)
_
(13.4)
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)
Entain plc | Annual Report 2022 210
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
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
2,282.4
293.7
2,576.1
2,099.8
338.0
2,437.8
Other
loans and
borrowings
£m
Lease
liabilities
£m
2022
Total
£m
Other
loans and
borrowings
£m
Lease
liabilities
£m
2021
Total
£m
Changes from financing cash flows
Proceeds from borrowings, net of issue costs
Repayment of borrowings
Repayment of borrowings on acquisition
Repayment of lease liabilities1
Total changes from financing cash flows
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
838.4
(109.0)
(162.8)
–
566.6
76.2
(91.9)
–
5.7
–
(10.0)
162.8
112.2
–
–
–
(83.0)
(83.0)
13.0
(13.0)
61.8
–
(5.0)
56.8
9.5
3.9
838.4
(109.0)
(162.8)
(83.0)
483.6
89.2
(104.9)
61.8
5.7
(5.0)
46.8
172.3
116.1
797.2
(566.1)
–
231.1
63.3
(61.4)
–
5.8
–
7.7
–
(56.2)
–
–
797.2
(566.1)
(88.1)
(88.1)
14.0
(14.0)
52.0
–
(5.5)
46.5
0.9
(3.6)
(88.1)
143.0
77.3
(75.4)
52.0
5.8
(5.5)
54.2
0.9
(59.8)
Balance at 31 December
3,114.0
280.9
3,394.9
2,282.4
293.7
2,576.1
1. In addition to the above, the Group received £0.2m (2021: £0.2m) in respect of lease receivables resulting in a net repayment of finance leases of £82.8m (2021: £87.9m).
2. In addition to the above, the Group received £4.3m (2021: £2.1m) of interest income resulting in a net finance expense paid of £100.6m (2021: £73.3m).
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 £18.9m of contributions (2021: £16.0m) 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
are recognised in the consolidated balance sheet.
Following the buy-out of the Ladbrokes Pension Plan, the Group now only has one pension scheme, 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 earnings’ for the Gala Coral Pension Plan. The weighted average
duration of the expected benefit payments from the Plan is around 15 years (2021: 18 years).
The Plan’s assets are held separately from this of the Group. The Plan is approved by HMRC for tax purposes, and is managed by
independent Trustees. The Plan is 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 is paying the 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 2022 for the Gala Coral Pension Plan was updated to 31 December 2022
by an independent qualified actuary in accordance with IAS 19 (Revised) Employee Benefits. The value of the defined benefit obligation
and current service cost has 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.
In 2021, 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
were recorded at 31 December 2021. These assets were subsequently refunded to the Group in 2022.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
211
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
2022
(Coral)
2022
(Ladbrokes)
£m
(259.4)
323.2
63.8
63.8
£m
–
–
–
–
2022
Total
£m
(259.4)
323.2
63.8
2021
(Coral)
£m
(430.5)
518.6
88.1
63.8
88.1
2021
(Ladbrokes)
£m
–
7.0
7.0
7.0
2021
Total
£m
(430.5)
525.6
95.1
95.1
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 plan means that any surplus that exists once all liabilities have been settled is 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
2022
(Coral)
2022
(Ladbrokes)
£m
£m
–
1.3
(1.6)
(0.3)
–
–
–
–
2022
Total
£m
–
1.3
(1.6)
(0.3)
2021
(Coral)
£m
2021
(Ladbrokes)
£m
–
0.6
(0.7)
(0.1)
0.5
–
(0.1)
0.4
The actual return on plan assets including interest over the year was a £183.4m loss (2021: gain of £23.1m).
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
2022
(Coral)
2022
(Ladbrokes)
£m
(192.6)
6.0
175.0
(13.0)
£m
(0.1)
–
–
–
2022
Total
£m
(192.7)
6.0
175.0
(13.0)
2021
(Coral)
£m
21.4
2021
(Ladbrokes)
£m
(7.0)
–
6.1
0.9
–
(24.6)
(0.1)
(24.7)
31.2
2021
Total
£m
0.5
0.6
(0.8)
0.3
2021
Total
£m
14.4
–
21.5
(4.7)
31.2
Changes in the present value of the defined benefit obligation are as follows:
At 1 January
Interest on obligation
Actuarial gains due to changes in demographic
assumptions
Actuarial gains due to changes in financial
assumptions
Experience adjustments on obligations
Scheme buy-out
Benefits paid
At 31 December
2022
(Coral)
2022
(Ladbrokes)
£m
(430.5)
(7.7)
6.0
175.0
(13.0)
–
10.8
(259.4)
£m
–
–
–
–
–
–
–
–
2022
Total
£m
(430.5)
(7.7)
6.0
175.0
(13.0)
–
10.8
2021
(Coral)
£m
(450.1)
(5.3)
2021
(Ladbrokes)
£m
(385.1)
(2.6)
2021
Total
£m
(835.2)
(7.9)
–
–
6.1
0.9
368.4
12.3
–
21.5
(4.7)
368.4
27.4
(430.5)
(259.4)
(430.5)
–
15.4
(5.6)
–
15.4
(5.6)
–
15.1
Entain plc | Annual Report 2022 212
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
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
2022
(Coral)
2022
(Ladbrokes)
£m
518.6
9.3
(1.3)
(192.6)
–
(10.8)
323.2
£m
7.0
–
–
(0.1)
(6.9)
–
–
2022
Total
£m
525.6
9.3
(1.3)
(192.7)
(6.9)
(10.8)
323.2
2021
(Coral)
£m
506.9
6.0
(0.6)
21.4
–
(15.1)
518.6
2021
(Ladbrokes)
£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
The Group does not expect to contribute to the plan in 2023. 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
Diversified growth funds
Liability driven investment
Multi-asset credit
Corporate bonds
Private credit
Cash and cash equivalents
2022
(Coral)
%
6.0
16.0
36.0
12.0
22.0
8.0
–
100.0
2022
(Ladbrokes)
%
2021
(Coral)
%
2021
(Ladbrokes)
%
–
–
–
–
–
–
–
–
14.0
11.2
38.3
10.0
21.0
5.1
0.4
100.0
–
–
–
–
–
–
100.0
100.0
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. At 31 December 2022 these represented c8.0% (2021: c.5.1%) 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 2022 these represented
less than 0.1% (2021: 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.
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)
2022
(Coral)
% p.a.
2022
(Ladbrokes)
% p.a.
2021
(Coral)
% p.a.
2021
(Ladbrokes)
% p.a.
4.8
2.2
3.2
3.1
2.1
n/a
n/a
n/a
n/a
n/a
1.8
2.3
3.3
3.2
2.2
n/a
n/a
n/a
n/a
n/a
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 45 for year ended
Female aged 45 for year ended
Male aged 65 for year ended
Female aged 65 for year ended
2022
(Coral)
2022
(Ladbrokes)
2021
(Coral)
2021
(Ladbrokes)
87.4
89.9
86.2
88.5
n/a
n/a
n/a
n/a
87.9
90.1
86.5
88.6
n/a
n/a
n/a
n/a
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
213
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 2022:
– 0.5% p.a. decrease in the discount rate
– 0.5% p.a. increase in price inflation
– One year increase in life expectancy
2022
(Coral)
2022
(Ladbrokes)
%
7.4
5.0
3.3
%
_
_
_
2021
(Coral)
%
2021
(Ladbrokes)
%
9.8
6.9
4.6
–
–
–
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:
Existing at
31 December
2022
Exercisable at
31 December
2022
Date of grant
Exercise price
16 Dec 2016
28 Dec 2017
19 Sep 2018
26 Mar 2019
10 Jun 2020
24 Mar 2021
04 May 2021
18 Mar 2022
26 Apr 2022
28 Jun 2022
422p
0p
0p
0p
0p
0p
1264p
0p
1333p
0p
Existing at
1 January
2022
454,138
25,817
39,944
2,056,720
1,511,185
1,122,325
957,613
–
–
–
Granted
in the year
–
–
–
–
–
–
–
1,293,110
678,029
496,980
Cancelled
or forfeited
in the year
–
–
–
(97,194)
(267,628)
(213,395)
(290,382)
(84,596)
(49,666)
(13,948)
Exercised
in the year
(102,800)
(22,425)
(39,944)
(1,892,338)
–
–
–
–
–
–
351,338
3,392
–
67,188
1,243,557
908,930
667,231
1,208,514
628,363
483,032
Total Schemes
6,167,742
2,468,119
(1,016,809)
(2,057,507)
5,561,545
351,338
3,392
–
67,188
–
–
–
–
–
–
421,918
Vesting
criteria
Note a
Note b
Note c
Note d
Note e
Note f
Note g
Note h
Note i
Note j
Note a: 2016 MIP Plan – 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 Plan – 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 Plan – 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 Plan – 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 Plan – 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 Plan – 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 Plan – During 2021 the Group set up an Employee Sharesave plan. Under this plan employees of the Group are able to subscribe up to a maximum
of £100 a month to invest in share purchases a price representing a discount of 20% from the share price at the commencement of the plan. The vesting period is three years.
The shares will vest conditional upon continued employment at the end of the three years.
Note h: 2022 LTIP Plan – 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 certain TSR performance conditions being met.
Note i: 2022 Employee Sharesave Plan – During 2022 the Group set up an Employee Sharesave plan. Under this plan employees of the Group are able to subscribe to a maximum of
£100 a month to invest in share purchases at a price representing a discount of 20% from the share price at the commencement of the plan. The vesting period is three years.
The shares will vest conditional upon continued employment at the end of the three years.
Note j: 2022 Employee Free Share Plan – During 2022 the Group set up an Employee Free Share plan. Under this plan each employee of the Group has been granted 22 free shares
for a vesting period of two years. The shares will vest conditional upon continued employment at the end of the two years.
The charge to share-based payments within the consolidated income statement in respect of these options in 2022 was £19.2m
(2021: £12.3m) which related entirely to equity settled options.
Entain plc | Annual Report 2022 214
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
31 Share-based payments (continued)
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
2022
31p
366p
21p
426p
329p
351p
Number
of options
31 December
2022
6,167,742
2,468,119
(2,057,507)
(1,016,809)
5,561,545
421,918
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
The options outstanding at 31 December 2022 have a weighted average contractual life of 1.4 years (31 December 2021: 1.2 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:
Share price at
date of grant
Exercise price
Date of grant
Dec 16
Dec 17
Sep 18
Mar 19
Jun 20
Mar 21
May 21
Mar 22
Apr 22
Jun 22
(£)
6.48
9.34
9.14
4.96
7.86
15.25
16.46
16.66
14.74
13.04
(£)
4.22
–
–
–
–
–
12.64
–
13.33
–
Expected
volatility
%
28%-30%
26.6%
33.7%
31.5%
33.2%
52.8%
51.3%
51.5%
50.1%
n/a
Exercise
multiple
Expected
dividend yield
n/a
n/a
n/a
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%
1.2%
1.3%
n/a
Risk free rate
%
–
0.40%
1.00%
0.70%
0.30%
0.01%
0.02%
1.4%
1.6%
n/a
Fair value at
measurement
date
(£)
1.43 – 1.94
7.39 – 9.34
4.58 – 9.14
1.90 – 4.96
3.54 – 7.86
10.03 – 11.27
6.75
10.77 – 12.35
5.66
13.04
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 estimation. We engaged independent third parties, including
Kroll, to assist with the identification and valuation process. 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:
SuperSport
During the year, the Group set up a new subsidiary Entain Holdings (CEE) Limited which the Group holds 75% of the equity in.
On 22 November 2022, Entain Holdings (CEE) Limited acquired 100% of EMMA GAMMA Adriatic d.o.o. EMMA GAMMA owns SuperSport,
a leading online and retail sports betting and gaming brand in Croatia, which provides the Group access to the Central and Eastern
Europe (CEE) region.
Entain Holdings (CEE) Limited paid €623.7m including working capital adjustments, with further amounts payable in 2023 representing
a multiple of 2022 EBITDA and contingent payments in 2024 and 2025 based on future financial performance.
Given the proximity of the acquisition to the period end and as permitted by IFRS 3 ‘Business Combinations’, the fair value of the acquired
identifiable assets and liabilities has been presented on a provisional basis. Fair values were determined on the basis of an initial
assessment performed by an independent professional expert.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
215
32 Business combinations (continued)
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Intangible assets (excluding goodwill)
Property, plant and equipment
Trade and other receivables
Cash and cash equivalents
Deferred tax liability
Loans and borrowings
Trade and other payables
Lease liabilities
Total
Net assets acquired
Goodwill1
Total net assets acquired
Consideration:
Cash
Contingent consideration
Total consideration
Provisional
fair value
£m
465.6
10.1
18.2
11.8
(83.7)
(162.8)
(24.2)
(6.6)
228.4
228.4
518.8
747.2
534.4
212.8
747.2
As part of the incorporation of Entain Holdings (CEE) Limited and the acquisition of SuperSport, the Group recognised £174.3m of
non-controlling interest in Entain Holdings (CEE) Limited representing the subscription of funds by the non-controlling entity in Entain
Holdings (CEE) Limited as their share of the cash consideration and their contribution to the repayment of SuperSport external debt.
The share purchase agreement provides the Group with the opportunity to purchase (and the non-controlling interest to sell (a put option))
the 25% of the share capital of Entain Holdings (CEE) Limited currently owned by the non-controlling interset, from 22 November 2025.
Within the Group balance sheet as at 31 December 2022 is €202.4m of net assets is associated with the non-controlling interests in
Entain Holdings (CEE) Limited.
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.
Avid
On 7 February, the Group acquired 100% of the share capital of Avid International Ltd. Avid owns Sports Interaction, a leading online
sports betting brand in Canada, which provides the Group with access to Canada’s highly attractive and fast growing sports betting
and gaming. In accordance with IFRS 3, as control has been obtained, the business has been consolidated from the point of acquisition.
Consideration amounted to €211.3m.
Klondaika
On 31 January, the Group acquired 100% of the share capital of SIA Klondaika, a largely online betting and gaming operator in Latvia.
In accordance with IFRS 3, as control has been obtained, the business has been consolidated from this point forward. Consideration
amounted to €24.6m, including €1.6m in relation to working capital on acquisition. Of the €24.6m consideration €4.6m is deferred.
Totolotek
On 16 May, the Group acquired 100% of Totolotek S.A. (renamed to bwin Poland S.A.), an online sports betting operator in
Poland. In accordance with IFRS 3, as control has been obtained, the business has been consolidated from this point forward.
Consideration amounted to €6.1m, including €1.1m in relation of working capital on acquisition.
Full House Group
On 16 September 2022, the Group acquired 33% of the share capital of Full House Group Pty Limited (“FHG”) in Australia for AUD $4.0m.
Whilst the group only owns 33% of the issued equity, it controls the board through its voting rights and therefore controls FHG. In line
with IFRS 3, as the group controls the acquired entity, it is to be consolidated from the date of acquisition. Given the acquisition of the
33% share reflected an open market transaction, consideration for the purposes of IFRS 3 is deemed to be AUD £$12.0m.
Entain plc | Annual Report 2022 216
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
32 Business combinations (continued)
M3
In July 2022, the Group purchased a small number of shops in Italy via the acquisition of 100% of shares in Agenzia M3 S.r.l.
The acquisition enabled the Group to develop its franchisee network in the Puglia region.
Details of the purchase consideration, the net assets acquired and goodwill of all other business combinations are as follows:
Intangible assets (excluding goodwill)
Property, plant and equipment
Investments
Trade and other receivables
Cash and cash equivalents
Deferred tax liability
Trade and other payables
Lease liabilities
Total
Net assets acquired
Goodwill1
Total net assets acquired
Consideration:
Cash
Non-controlling interests
Deferred consideration
Total consideration
Fair value
£m
101.3
7.2
4.9
6.0
18.1
(2.2)
(24.9)
(2.9)
107.5
107.5
103.5
211.0
202.5
4.6
3.9
211.0
1. Goodwill acquired on business combinations is not tax deductible.
All of the acquired businesses contributed revenues of £46.9m and profit before tax of £13.9m.
Had the acquisitions occurred on the first day of the financial year the revenue for the group would have been £4,497.9m with a profit
before tax of £189.0m.
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 £400.0m (31 December 2021: £500.0m).
HMRC investigation
On 28 November 2019, one of our UK subsidiaries, Entain 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 betting and gaming 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 betting and gaming 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.
Greek tax
In November 2021, the Athens Administrative Court of Appeal ruled in favour of the Group’s appeal against the tax assessment raised
by the Greek tax authorities in respect of 2010 and 2011. In February 2022, the Greek tax authorities appealed against the judgements
to the Greek Supreme Administrative Court. While 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 could become liable for the
full 2010-2011 assessment plus interest, an estimated total of €267m at 31 December 2022.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
217
33 Commitments and contingencies (continued)
In addition to the items discussed above, the Group is subject to a number of other potential litigation claims that arise as part of
the normal course of business and continue to arise throughout 2023. Provision has not been made against these claims as they are
not considered likely to result in an economic outflow. Consistent with any claims of this nature there can be uncertainty with the
final outcome.
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
2022
£m
2021
£m
175.1
164.4
(55.5)
(59.3)
1. Equity investment in BetMGM.
2. Payments in the normal course of business made to Sports Information Services (Holdings) Limited, bwin eK Neugersdorf, Gran Casino Dinant SA, Infiniti Casino Oostende NV,
and Leaderbet NV.
Details of related party outstanding balances
Other amounts outstanding
– Joint venture receivable
– Associates receivables
– Associates payables
2022
£m
87.8
4.4
(0.3)
2021
£m
22.1
–
(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 2022 are unsecured and settlement occurs in cash. For the year ended 31 December 2022, the Group has not raised
any provision (2021: £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 146 to 152 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 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
Pension-related costs
Share-based payments
Total compensation paid to key management personnel
2022
£m
7.9
0.1
7.6
15.6
2021
£m
9.7
–
5.2
14.9
Peter Isola, who was a non-executive director of Entain plc until 21 March 2022, is a director of Europort (International) Holdings Limited,
a property firm in Gibraltar which charged rental expenses of £0.5m to the Group during the year (2021: £2.6m).
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.
Entain plc | Annual Report 2022 218
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
34 Related party disclosures (continued)
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) Limited5
Bartletts Limited5
Birchgree Limited4
Bloxhams Bookmakers Limited5
Brickagent Limited5
Cashcade Limited
CE Acquisition 1 Limited4,6
Chas Kendall (Turf Accountant) Limited5
Choicebet Limited5
C L Jennings (1995) Limited5
Competition Management Services Co. Limited5
Coral (Holdings) Limited4,6
Coral (Stoke) Limited5
Coral Estates Limited6
Coral Eurobet Limited6
Coral Eurobet Holdings Limited4,6
Coral Group Limited4,6
Coral Group Trading Limited4,6
Coral Limited4,6
Coral Racing Limited6
Coral Stadia Limited4,5
E.F. Politt & Son Limited5
Electraworks Maple Limited5
Entain Holdings (UK) Limited1,2,4
Entain Marketing (UK) Limited4
Entain Services Limited5
Entain Wave Limited5
Forster’s (Bookmakers) Limited5
Gable House Estates Limited5
Ganton House Investments Limited6
Greatmark Limited5
Hillford Estates Limited5
Hindwain Limited6
Impala Digital Limited3
Interactive Sports Limited5
J G Leisure Limited5
J. Ward Hill & Company5
Jack Brown (Bookmaker) Limited5
Jerusalem Development (Mamilla) Co. Limited5
Jerusalem Development Corporation (Holdings) Limited4,5
Joe Jennings (1995) Limited5
Joe Jennings Limited5
Krullind Limited5
Ladbroke & Co., Limited5
Ladbroke (Rentals) Limited5
Ladbroke City & County Land Company Limited5
Ladbroke Dormant Holding Company Limited4,5
Ladbroke Entertainments Limited6
Ladbroke Group4,5
Ladbroke Group Homes Limited5
Ladbroke Group International5
2022
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
100.0
100.0
100.0
100.0
100.0
100.0
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
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
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
219
34 Related party disclosures (continued)
Registered address
Company
Ladbroke Group Properties Limited4,5
Ladbroke Land Limited5
Ladbroke Leasing (South East) Limited5
Ladbroke Racing (South East) Limited5
Ladbroke US Investments Limited4,5
Ladbrokes (CLJEA) Limited5
Ladbrokes (CLJHC) Limited5
Ladbrokes (CLJSW) Limited5
Ladbrokes Betting & Gaming Limited2,3,4
Ladbrokes Contact Centre Limited5
Ladbrokes Coral Corporate Director Limited5
Ladbrokes Coral Corporate Secretaries Limited5
Ladbrokes Coral Group Life Benefits Trustee Limited5
Ladbrokes Coral Group Limited2,4
Ladbrokes Coral Group Pension Trustee Limited
Ladbrokes CPCB Limited5
Ladbrokes E-Gaming Limited6
Ladbrokes Group Finance plc2
Ladbrokes Investments Holdings Limited4,5
Ladbrokes IT & Shared Services Limited6
Ladbrokes PT Limited5
Ladbrokes Trustee Company Limited5
Lightworld Limited4,5
London & Leeds Estates Limited5
Margolis and Ridley Limited5
New Angel Court Limited5
Paddington Casino Limited5
Reg.Boyle Limited5
Reuben Page Limited4,5
Romford Stadium Limited5
Rousset Capital Limited6
Sabrinet Limited5
Sponsio Limited5,6
Sporting Odds Limited2,3
Sportingbet (IT Services) Limited5
Sportingbet (Management Services) Limited5
Sportingbet Holdings Limited4,6
Sportingbet Limited4,6
Sports (Bookmakers) Limited5
Techno Land Improvements Limited5
Town and County Factors Limited
Travel Document Service4,5
Vegas Betting Limited5
Ventmear Limited5
Techno Limited
Ladbrokes (Northern Ireland) (Holdings) Limited4,6
Ladbrokes (Northern Ireland) Limited5
North West Bookmakers Limited2,3
1 Bartholomew Lane,
London, United Kingdom
EC2N 2AX
77A Andersonstown Road,
Belfast, United Kingdom
BT11 9AH
% equity interest
2022
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
84.0
100.0
100.0
100.0
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
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
84.0
100.0
100.0
100.0
Entain plc | Annual Report 2022 220
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
34 Related party disclosures (continued)
Subsidiaries based overseas
Registered address
East Tower, Level 2,
25 Montpelier Road,
Bowen Hills,
QLD 4006
Australia
17 Atlantic Dr, Keysborough,
VIC 3173 Australia
Marxergasse 1b,
1030 Vienna,
Austria
Chaussée de Wavre 1100 Box 3,
1160 Auderghem,
Belgium
Company
Ennovate Investments Pty Limited
Ennovate Labs Pty Limited
Entain Group Pty Limited2,3
Esports Australia Pty Limited
Gaming Investments Pty Limited4
Ladbrokes Racing Club Pty Limited
LB Australia Holdings Pty Limited4
Neds.com.au Pty Limited
Neds International Pty Limited2,3
Full House Group Pty Limited
Innquizitive Pty Limited
Entain Services Australia GmbH
Ladbroke Belgium SA4
Pari Mutuel Management Services S.A.
N.V. Derby S.A.
Redsports.be SRL/BV
Tiercé Ladbroke S.A.3
Tilt SRL/BV
29 Avenue Lavoisier, 1300 Wavre, Belgium Professional Gaming Services Sprl
Creative Trend Limited5
CTL Holdings International Limited5
SRL Holdings International Limited5
Sunrise Resources Limited5
Westman Holdings Limited
Belmont Chambers,
Road Town,
Tortola,
British Virgin Islands
Jayla Place, Wickhams Cay 1, Road Town,
Tortola, British Virgin Islands
Sea Meadow House, Blackbourne Highway,
P.O Box 116, Road Town, Tortola,
British Virgin Islands
55 Nikola Vaptsarov Blvd, Office Park Expo
2000, Building Phase 4, Floor 3, Lozenets
Area, Sofia 1407, Bulgaria
1565 Carling Avenue, Suite 400, Ottawa,
Ontario K1Z 8R1, Canada
100-2006 Old Malone Road, Kahnawake,
Quebec J0L1B0, Canada
5B, First Floor, St Anne’s House, Victoria
Street, Alderney, GY9 3UY, Channel Islands
13/F, Gloucester Tower, The Landmark,
15 Queen’s Road, Central Hong Kong, China
CR 15 # 106 32 Of P H 3, BOGOTA D.C.,
Colombia
Krcka Ulica 18d 10000
Zagreb, Croatia
Emma Gamma Adriatic d.o.o
Puni Broj d.o.o
SuperSport d.o.o
SuperSport marketing d.o.o
Ulica Josipa Marohnića 1/1, Zagreb, Croatia Minus5 d.o.o
Emancipatie Boulevard Dominico F. “Don”
Martina 29, Curaçao
GVC Services BV
Heelsumstraat 51 E-Commerce Park Curaçao
P.O Box 422
Best Global N.V
Wavecrest Providers Limited5
100.0
100.0
Entain Services (Bulgaria) EOOD
100.0
100.0
6996825 Canada Limited
100.0
100.0
Kahnawake Management Services Inc
100.0
–
Interactive Sports (C.I.) Limited
100.0
100.0
GVC Technology Consulting (Asia) Co Limited
100.0
100.0
Bwin Latam S.A.S.
100.0
100.0
% equity interest
2022
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
33.3
33.3
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
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
75.0
75.0
75.0
75.0
75.0
–
–
–
–
–
100.0
100.0
100.0
100.0
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
221
34 Related party disclosures (continued)
Registered address
Kaya Richard J. Beajon Z/N Landhuls
Joonchi II, Curaçao P.O Box 6248
Company
Elec Games N.V
15 Agion Omologiton, Nicosia, 1080 Cyprus Bellingrath Enterprises Limited
Fruebjergvej 3, Copenhagen, 2100, Denmark
Lootsa tn 1a, Lasnamae Linnaosa,
11415 Estonia
Interactive Sports (Denmark) ApS
Ninja Global OU5
Optiwin OU3
Unioninkatu 24, Helsinki, 00130 Finland
Finnplay Technologies Oy
19 Boulevard Malesherbes, 75008,
Paris, France
B.E.S. S.A.S
Senefelderstrasse 22, 10437 Berlin, Germany Entain (Germany) GmbH
Apt. 48, N19, Vake District, Kavtaradze Str.,
Tbilisi, Georgia
Entain Georgia LLC
Vake District, Kavtaradze Str., No 5,
Entrance 2, Floor 2, Office Space No 2,
Tbilisi, Georgia
MARS LLC2,3
Suite 6 Atlantic Suites,
Europort Avenue,
Gibraltar
7th Floor, Madison building, Midtown,
Queensway, GX11 1AA, Gibraltar
Balltree (International) Limited5
Bingo Marketing Limited
bwin.party holdings Limited
bwin.party services (Gibraltar) Limited
Coral Interactive (Gibraltar) Limited5
ElectraGames Limited
ElectraWorks Limited2,3
Entain Holdings Limited5
Gala Coral Interactive (Gibraltar) Limited4,5
Gala Interactive (Gibraltar) Limited4,5
Greyjoy Limited
Entain Corporate Services Limited
Entain Holdings (Gibraltar) Limited1
Entain Operations Limited
EntainTrustees Limited
Fusionex Limited
IGM Domain Name Services Limited
ISG (Gibraltar) Limited
Ladbrokes Sportsbook LP
LC International Limited2,3,4
PartyGaming IA Limited5
The Entain Foundation
Inchalla, Alderney, GY9 3UL, Guernsey
ElectraWorks (Alderney) Limited
Quay House, South Esplanade St,
Peter Port, Guernsey GY1 4EJ
PO Box 132
1st Floor Otter House,
Naas Road,
Dublin 22 Ireland
3 Dublin Landings, North Wall Quay,
D01 C4EO Ireland
5th Floor, Divyasree Omega Block – B,
Hitec City Road, Kondapur, Hyderabad
Andhra Pradesh, 500081 India
Longfrie Limited
Avid Ecom Solutions Limited
Avid Studios Limited
Ladbroke (Ireland) Limited2,3,4
Fort Anne Limited1
M.L.B. Limited
IVY Comptech Private Limited
% equity interest
2022
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
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
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 2022 222
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
34 Related party disclosures (continued)
Registered address
Company
6th Floor Divyashree Omega Block-B
Plot No 13/E, Survey no.13(part),
Kondapur, Hyderabad, Andhra Pradesh
500081 India
Plot No.250, VI Phase, KPHB Colony
Hyderabad, Rangareddi Telangana India
IVY Foundation Limited
IVY Global Shared Services Private Limited
IVY Software Development Services Privarte Limited
Ivy Mobitech Services Private Limited
32 Athol Street, Douglas, IM1 1JB Isle of Man
Entain (IOM) Limited1
Menahem Begin Road 121 & 125,
Tel Aviv, Jaffa, Israel
Via Lungotevere Arnaldo da Brescia 12,
00196 Rome, Italy
Via Gaetano Previati 9,
20149 Milan, Italy
1st Floor Liberation House, Castle Street,
St Helier, JE1 1GL Jersey
Block 3 The Forum, Grenville Street,
St Helier, JE1 1ST Jersey
IFC 5,
St Helier, JE1 1ST Jersey
ALN House Eldama Ravine Close,
Off Eldama Ravine Road, Westlands,
Nairobi, PO Box 200, Kenya
Setekles iela,
Riga LV-1050
Latvia
Zalgurio g. 96-101
Vilnius Lithuania
Unit 6 ST Business Centre,
120 The Strand,
Gzira GZR 1027
Malta
Gala Interactive (Services) Limited
GVC Impala R&D Limited
Ladbrokes Israel Limited2
Agenzia M3 S.R.L
Eurobet Holding S.R.L4
Eurobet Italia S.R.L2,3
bwin European Markets Holding SpA
bwin Italia S.R.L3
Ladbroke (Channel Islands) Limited3
Avid International Limited
GVC Finance Limited
Maple Court Investments (Jersey) Limited5
PartyGaming Finance Limited
Wave Operations (Kenya) Limited
Wave Online (Kenya) Limited
SIA Klondaika
SIA Klondaika Café
SIA Laimz3
SIA Optibet3
UAB Baltic Bet3
UAB Party Casino3
bwin (Deutschland) Limited
bwin.gr Limited2
bwin Holdings (Malta) Limited1
bwin.party services (Malta) Limited
bwin.party holding Malta Limited
bwin.party International Malta Limited
Deis Limited
ElectraWorks (France) Limited
ElectraWorks (Kiel) Limited
ElectraWorks (Svenska) Limited
ElectraWorks Europe Limited
Entain Holdings (Malta) Limited
Entain (Romania) Limited1
Entertainments Technologies Group Limited4
Gamebookers (Deutschland) Limited
Gaming VC Corporation Limited
Ladbrokes (Deutschland) Limited
Martingale Europe Limited
Martingale Malta 2 Limited
Sportingbet (Deutschland) Limited
Scandic Bookmakers Limited
Spread your Wings Bravo Limited
VistaBet Limited2
% equity interest
2022
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
100.0
100.0
100.0
2021
100.0
100.0
100.0
100.0
100.0
100.0
51.0
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
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
223
34 Related party disclosures (continued)
% equity interest
Registered address
120 The Strand, Unit 6,
Trig Ix-Xatt,
Gzira GZR 1027
Malta
Level G (Office 1/0813), Quantum House,
75 Abate Rigord Street,
TaXbiex XBX 1120, Malta
11, L-Ufficcji – Ground Floor, Misrah 28 TA
FRAR 1883, Birkirkara, BKR 1501 Malta
San Francisco 1005, Dolonia Del Valle,
Alcaldía Benito Juárez, Mexico City,
C.P. 03100 Mexico
Johan Cruijff Boulevard 61, Amsterdam
1101Dl Netherlands
6F Tower 3 Double Dragon Plaza EDSA
Ext. cor. Macapagal Avenue, Pasay City
Philippines
Company
BestBet Limited3
Elec Games C1 Limited3
Elec Games Holdings Limited4
Elec Games Limited3
Evora International Limited
Future Domain Lead Generation Limited
Future Lead Generation Limited4
Lifland Holdings Limited4
Ninja Global Limited3
West African Gaming Limited5
Entain Holdings (CEE) Limited
Luaspay Limited
Bwin Operations Mexico, S.A. de C.V.
Entain Mexico, S.A. de C.V.
Entain Holdings (Netherlands) B.V.
InteractiveSports Asia Limited Inc.
NCH Customer Support Services, Inc
UI. Taneczna 18A, 02-829 Warsaw Poland
bwin Poland S.A.
Lagoas Park, Edificio 11, Piso 0 Sul,
2740-244, Porto Salvo, Portugal
Avenida D. João II, nº 46, 4º A
District Lisbon Municipality, Lisbon Parish,
Parque das Nações 1990 095 Lisbon
Portugal
Infield – Servicos de Consultoria Marketing Unipessoal LDA.
Gobet Entretenimento SA3
Entain Operations Portugal SA
1 Harbourfront Avenue, Keppel Bay Tower
14-03/07, 098632 Singapore
Cozy Games Pte Limited
Florent Pte Limited
bwin Interactive Marketing Espana S.L.
2022
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
75.0
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
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
Javari Marketing Consultancy Services S.L.
100.0
100.0
Castello 82 4 IZQ, 28006 Madrid Spain
Ladbrokes Betting and Gaming Spain, S.A.
Calle Real Numero 74, 51001 Ceuta Spain
Electraworks (Ceuta) S.A.
Winners Apuestas SA
100.0
100.0
100.0
100.0
–
100.0
Sportinbet Spain S.A.
100.0
100.0
SBT Software Operations (SA) (Pty)
100.0
100.0
Ladbrokes (SA) (Pty) Limited
60.0
60.0
Enlabs AB4
Entraction AB
Kama Net AB3
Score24 AB3
Scout Gaming AB3
100.0
97.0
100.0
100.0
100.0
100.0
97.0
100.0
100.0
100.0
Box 3095, 35033 Växjö Sweden
Webdollar Sweden AB
100.0
100.0
Calle Amador de los Ríos n°1, 6 planta
28010 Madrid Spain
Calle Josep Plá, número 2, planta 5ªD
Edificio Torre Diagonal Litoral, 08019
Barcelona Spain
Avenida de Fuencarral 44, Edificio Tribeca 1
Modulo B, CP 28108 Alcobendas Madrid
Spain
Cl Conde de Aranda 20, 28001
Madrid Spain
Suite 4 Constantia House, Steenbert Office
Park, Constantia, 7800 South Africa
24A 18th Street, Menlo Park, Pretoria
0081 South Africa
Stora Gatan 46, Sigtuna
Kommun, 19330, Sweden
Royal Park Serviced Office,
Frosundaviks alle 15, 15903 Solna Sweden
Entain plc | Annual Report 2022 224
Notes to the consolidated financial statements continued
for the year ended 31 December 2022
34 Related party disclosures (continued)
Registered address
Almvägen 1A 635 06, Eskilstuna
Södermanland Sweden
Company
NLI AB
c/o The Corporation Trust Company,
1209 Orange Street, Country of New Castle,
Wilmington DE 19891 United States
7251 Amigo Strees, Suite 100, Las Vegas
NV 89119 United States
GVC Finance LLC1
GVC Holdings (USA) Inc
Ladbrokes Holdco. Inc.4
Stadium Technology Group, LLC3
701 S.Carson Street, Suite 200,
Carson City, NV 90801
United States
c/o Saiber LLC, 18 Columbia Turnpike,
Suite 200, Florham Park, New Jersey
United States
2 Mykoly Solovtsova St, Office 38/1
01014 Kyiv Ukraine
Office 13, 39 Dzhona Makkeina,
Steer 01042 Kyiv Ukraine
Dr Luis Bonavita, 1294, Torre 2 WTC
Free Zone, Oficina 631, Montevideo
Uruguay
34972 Longacres, Lusaka
Lusaka Province, Zambia
bwin.party (USA) Inc
bwin.party entertainment (NJ) LLC
bwin.party services (NJ) Inc
Ladbrokes Subco LLC
The Entain Foundation US, Inc
Entain (Ukraine) LLC
LLC Bwin
Gomifer S.A.
% equity interest
2022
100.0
100.0
100.0
100.0
100.0
100.0
90.0
100.0
100.0
100.0
2021
100.0
100.0
100.0
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
Wave Digital Zambia Limited
100.0
100.0
1. Company that is directly owned by Entain plc.
2. Company that forms part of the Group as at 31 December 2022 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, United States
Associates
Company
BetMGM, LLC
Country of incorporation
Company
China
Germany
Belgium
United Kingdom
1. Subsidiary of Asia Gaming Technologies Limited.
Asia Gaming Technologies (Beijing) Co., Ltd1
Asia Gaming Technologies (Tianjin) Co., Ltd1
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
Sports Information Services (Holdings) Limited
% equity interest
2022
50.0
2021
50.0
% equity interest
2022
49.0
49.0
49.0
50.0
20.0
20.0
20.0
40.0
36.3
23.4
2021
49.0
49.0
49.0
50.0
20.0
20.0
20.0
40.0
36.3
23.4
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
225
35 Non-controlling interests
The principal non-controlling interests at 31 December 2022 held investments in Entain Holdings (CEE) Limited (25.0%) and Full House
Group Pty Limited (67.0%). Details of the business combinations resulting in the recognition of these non-controlling interests are set out
in note 32.
The total assets relating to subsidiaries with a non-controlling interest were £1,237.9m (20201: £54.5m) of which there were related
liabilities of £512.5m (2021: £37.1m).
The loss attributable to non-controlling interests was £4.7m (2021: profit of £11.4m).
The balance attributable to non-controlling interest is disclosed in the table below:
As at January 2021
Profit attributable to non-controlling interests
Business combinations
Purchase of non-controlling interests
Payment of dividends
As at January 2021
Loss attributable to non-controlling interests
Business combinations
Purchase of non-controlling interests
Foreign exchange
As at 31 December 2022
36 Subsequent events
Total
£m
52.3
11.4
14.2
(52.0)
(24.5)
1.4
(4.7)
178.9
2.1
6.1
183.8
On 14 June 2022, the Group announced the acquisition of 100% of the issued share capital of BetEnt B.V. which trades under the BetCity.
nl name for an initial €300m plus further contingent amounts subject to future trading performance; these are capped at €550m.
On 12 January 2023, the Group completed on the acquisition. The Group are yet to assess the accounting values to be attributed to
this acquisition.
On 11 January 2023, the Group completed the refinancing of the €1,125m term loan B through the issuance of a new €800m loan which
matures in June 2028, priced at EURIBOR plus a margin of 375 bps, and a $375m loan which matures in October 2029, priced at SOFR
plus a credit adjustment spread of 10 bps plus margin of 350 bps. The Euro loan was allocated at an originally issued discount of 97.5
with the USD loan allocated at an original issue discount of 98.75.
Entain plc | Annual Report 2022 226
Company income statement
for the year ended 31 December 2022
Other operating income
Dividends received
Operating expense
Operating profit before separately disclosed items
Administrative costs – separately disclosed items
Profit before tax and net finance expense
Finance expense
Finance income
Gains arising from change in fair value of financial instruments
Losses arising from foreign exchange on debt instruments
Profit before tax
Income tax
Profit for the year
All items included above relate to continuing operations.
There were no other items of comprehensive income in the year.
Note
6
7
8
8
8
8
9
2022
£m
18.7
150.0
(17.3)
151.4
(13.1)
138.3
(104.1)
12.2
86.7
(1.6)
131.5
(0.2)
131.3
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
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
227
Company balance sheet
at 31 December 2022
Assets
Non-current assets
Investments
Trade and other receivables
Interest bearing loans and borrowings
Current assets
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Derivative financial liability
Net current liabilities
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
(Company number 4685V)
Note
2022
£m
2021
£m
11
12
14
12
13
13
16
4,845.6
633.3
5.0
5,483.9
145.3
96.2
0.1
241.6
4,372.1
650.9
6.8
5,029.8
97.5
57.3
0.3
155.1
5,725.5
5,184.9
(1,135.5)
–
(1,135.5)
(744.3)
(7.5)
(751.8)
(893.9)
(596.7)
(651.3)
(651.3)
(594.0)
(594.0)
3,938.7
3,839.1
4.8
1,207.3
2,527.4
199.2
3,938.7
4.8
1,207.3
2,527.4
99.6
3,839.1
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 229 to 233 are an integral part of these financial statements.
The financial statements on pages 226 to 233 were approved by the Board of Directors on 9 March 2023 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 2022 228
Company statement of changes in equity
for the year ended 31 December 2022
At January 2021
Profit for the year
Total comprehensive expense
Share options exercised
Share-based payments charge
At 31 December 2021
Profit for the year
Total comprehensive expense
Share options exercised
Share-based payments charge
Equity dividends
At 31 December 2022
Called
up share
capital
£m
Share
premium
account
£m
Merger
Reserve
account
£m
Retained
earnings
£m
Total
£m
4.8
1,206.6
2,527.4
(174.6)
3,564.2
–
–
–
–
–
–
0.7
–
–
–
–
–
4.8
1,207.3
2,527.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4.8
1,207.3
2,527.4
267.3
267.3
–
6.9
99.6
131.3
131.3
–
18.3
(50.0)
199.2
267.3
267.3
0.7
6.9
3,839.1
131.3
131.3
–
18.3
(50.0)
3,938.7
The notes on pages 229 to 233 form an integral part of these financial statements.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
229
Notes to the Company financial statements
for the year ended 31 December 2022
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 2022 were authorised for issue in accordance with a resolution
of the directors on 9 March 2023.
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 2022 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 2022 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.
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 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.
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 the income statement.
Subsequently, the fair values are remeasured and gains and losses from changes therein are recognised in the income statement.
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.
Entain plc | Annual Report 2022 230
Notes to the Company financial statements continued
for the year ended 31 December 2022
3 Summary of significant accounting policies (continued)
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 when 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 tax’s 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.
Equity instruments
Equity instruments issued by the Company are recorded as the proceeds received net of direct issue costs.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
231
3 Summary of significant accounting policies (continued)
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).
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 there are no significant estimations within the Company.
5 Future accounting developments
The standards and interpretations that are issued, but not yet effective, excluding those relating to annual improvements are not
expected to have a material impact on the Parent Company financial statements. The Company intends to adopt these standards,
if applicable, when they become effective as set out in the Group 2022 Annual Report note 4.4.
6 Operating profit before separately disclosed items
This is stated after crediting/(charging):
Management fees
Audit fees
7 Separately disclosed items
Legal and onerous contract provisions
Movement in fair value of contingent consideration
Issue costs write-off
8 Finance expense and income
Loan interest income
Intercompany interest (expense)/income
Intercompany foreign exchange (expense)/income
Loan interest expense
Gains arising from change in fair value of financial instruments
Losses arising from foreign exchange on debt instruments
Net finance (expense)/income
2022
£m
18.7
(0.6)
2022
£m
0.6
12.5
–
13.1
2022
£m
12.2
(3.5)
(98.4)
(2.2)
86.7
(1.6)
(6.8)
2021
£m
14.6
(0.6)
2021
£m
4.5
2.3
5.3
12.1
2021
£m
5.9
7.6
0.9
(3.5)
77.4
(0.1)
88.2
Entain plc | Annual Report 2022 232
Notes to the Company financial statements continued
for the year ended 31 December 2022
8 Finance expense and income (continued)
The Group manages currency exposure through a number of derivative financial instruments, some of which are taken out in name of
Entain plc as well as other group companies. The financial instruments taken out in the name of Entain plc are used to swap the foreign
exchange risk on intercompany loans, which are back-to-back with the Group’s external debt held in other group companies. The net
change in fair value of financial instruments during the year was £86.7m (2021: £77.4m).
9 Income tax
The tax charge for the year presented is £0.2m (2021: tax credit of £0.6m).
A reconciliation of income tax applicable to profit (2021: profit) before tax at the UK statutory income tax rate to the income tax for the
years ended 31 December 2022 and 31 December 2021 is as follows:
Profit before tax
Corporate tax credit thereon at 19.00%
Adjusted for the effects of:
– Non-taxable income
– Non-deductible expenses
– Group relief claimed
– Overseas tax charge/(credit)
Income tax charge/(credit)
There is no deferred tax present on the balance sheet for either periods presented.
10 Dividends
Please see note 11 of the consolidated financial statements.
11 Investments
Cost and net book value
At 1 January 2021
Additions
At 31 December 2021
Cost and net book value
At 1 January 2022
Additions
At 31 December 2022
2022
£m
131.5
25.0
(28.5)
5.2
(1.7)
0.2
0.2
2021
£m
266.7
50.7
(36.6)
1.5
(15.6)
(0.6)
(0.6)
Total
£m
4,008.6
363.5
4,372.1
4,372.1
473.5
4,845.6
Subsidiaries and other related entities are listed in note 34 of the consolidated financial statements.
Additions in the year predominantly relate to additional equity subscribed for in subsidiary companies.
No reasonable changes to the assumptions used in assessing the recoverable amount of investments would lead to an impairment.
12 Trade and other receivables
Amounts due from Group companies
Other debtors
Prepayments
2022
£m
770.3
5.6
2.7
778.6
2021
£m
742.6
3.3
2.5
748.4
Amounts of £633.3m (2021: £650.9m) 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.
The expected credit losses arising from receivables are not considered to be significant.
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
233
13 Trade and other payables
Current
Amounts due to Group companies
Other payables
Non-current
Amounts due to Group companies
2022
£m
2021
£m
1,131.0
4.5
1,135.5
739.5
4.8
744.3
651.3
594.0
Amounts owed to certain 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.
14 Interest bearing loans and borrowings
The company has prepaid costs of £5.0m (2021: £6.8m) in respect of committed bank facilities.
As at 31 December 2022 there were £515.0m (2021: £515.0m) of committed bank facilities of which £nil (2021: £nil) were drawn down
and £52.1m (2021: £75.0m) of facilities which have been utilised for letters of credit. Fees in the year relating to the undrawn facility were
£5.0m (2021: £6.8m).
15 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.
16 Called up share capital
Details of the share capital of the Company are given in note 28 of the consolidated financial statements.
17 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.
18 Subsequent events
For details of subsequent events affecting the Company, see note 36 of the consolidated financial statements.
Entain plc | Annual Report 2022 234
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
Profit before exceptional items, amortisation associated with acquisition, dividends from previously
sold businesses
AR
ARC™
B2B
B2C
BI
CAGR
CGUs
CMS
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
Financial statements Entain plc | Annual Report 2022 Overview
Strategic report
Governance
Financial statements
235
Shareholder information
Annual General Meeting
The Company’s 2023 AGM will be held on Tuesday 25 April at 10:00 at etc. venues, 200 Aldersgate, London EC1A 4HD. 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 2023 AGM will be available on the Company’s website
at www.entaingroup.com shortly after the meeting.
Communications
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.
Share fraud warning
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).
Entain plc | Annual Report 2022 236
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 Corporate Office
25 Charterhouse Square
London
EC1M 6AE
Registrars
Link Asset Services
Central Square
29 Wellington Street
Leeds
LS1 4DL
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
EastWest
Tollhouse Hill
Nottingham
NG1 5FS
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
18 April
10 August
Q1 trading update
Interim results
Financial statements Entain plc | Annual Report 2022 Incorporated in the Isle of Man under number 4685V
www.entaingroup.com
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