BlackRock Bumps Up Entain Control Despite Share Price Slump

BlackRock has bumped up its control of Entain, crossing the 5% threshold once again. The move comes less than two months after the investment giant had previously trimmed its stake in the troubled gambling group that owns Ladbrokes and Coral.

A notification of major holdings to the London Stock Exchange (LSE) stipulated that BlackRock acquired another 0.95% of voting rights in the gaming multinational, increasing its stake to 5.01%. Despite re-upping its stake, no reason was disclosed for BlackRock’s latest purchase.

Entain share price worries

Although Entain holds a unique position as the only gambling company listed in the FTSE 100 index following Flutter Entertainment’s recent departure, fears have abounded over its share price. Over the past five years, Entain’s share price has dropped by more than 70% from £13.75 to £5.54, despite having a market cap of £2.55 billion.

Added to that, Entain’s share price was further dented by the recent release of BetMGM’s Q2 financial results — an operator in which it holds a 50% stake. BetMGM revealed full-year revenue and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at the lower end of the guidance ranges, which will have done little to alleviate Entain investor concerns.

An arduous time for operators

Unsurprisingly, stricter regulatory and tax regimes have made things more arduous for operators and ultimately hurt their bottom lines. From the start of April, remote gaming duty paid on online casino bets soared from 21% of gross gambling yield (GGY) to 40%, while in April 2027, general duty paid on online sports bets will jump from 15% to 25%, with horseracing exempt.

In the wake of the draconian changes announced by then UK Chancellor Rachel Reeves, many companies, including Flutter, which owns Sky Bet and Betfair, were weighing up restructures to their marketing operations to mitigate the impact. William Hill’s owner Evoke had suggested that costs would rise to £135 million per year once the tax changes were implemented, and no firm is immune.

Entain went a bit deeper last month after confirming that it would be making 500 redundancies, and the cuts enforced equate to 2% of its global workforce. Although Entain denied the cuts were directly linked to the increased tax rates, they have had to pull back on some of its commitments.

A cost-cutting programme, which was initiated by Chief Financial Officer Michael Snape, saw Entain retreat from central and eastern Europe by selling a 20% stake in its joint venture to existing partner EMMA Capital for £366 million. Meanwhile, other changes will be made to ensure operating efficiencies, including optimising bonuses.

Does BlackRock have renewed optimism?

While banking giant JP Morgan performed a dramatic U-turn in May by dumping the bulk of its shares in Entain to below the 3% stake mark, BlackRock arguably sees things differently, and perhaps it has renewed its faith in the troubled company.

Indeed, BlackRock, which has a colossal portfolio with over £11 trillion of assets under its management, will be casting a close eye on Entain’s Q2 financial results, which will be released next week. While it remains to be seen what impact the 2026 World Cup had on Entain’s revenue, BlackRock could see long-term value in investing.

Whether Entain’s share price rebounds in the months ahead remains to be seen. The main focus from an investor perspective will be on whether Entain can turn things around and combat the challenges it currently faces.