EXCLUSIVE: UK Gambling Analyst Clarifies Entain’s Downgraded Rating

Entain’s downgraded rating wasn’t due to the way the UK handles treatment of gambling as a public health issue, betting.co.uk can exclusively reveal.

Reports emerged earlier this week that Entain’s target share price dropped from £11 to £8.50, while the recommendation moved from Buy to Add.

While it was originally claimed that gambling as a public health matter was the driving factor behind the decision, we discovered the real reason behind the revised rating. This information was disclosed by a top gambling analyst.

Buy rating can’t be ‘justified’

A Buy recommendation suggests a stock will perform strongly and exceed expectations. In the case of Entain, the rating was adjusted because Add is more reflective of its current standing.

Ivor Jones, a gambling analyst for leading UK investment bank Peel Hunt, told betting.co.uk:

“I've been playing catch-up with the information released by Entain on November 27.

"At the moment, there is not enough upside to justify a buy rating, but we can expect to find out more info in the coming weeks with the results.”

Setting the record straight on problem gambling

The United Kingdom Gambling Commission (UKGC) has been trying to get to grips with problem gambling, and there is a raft of incoming measures on the way. There have been calls for greater restrictions on gambling advertising, given betting companies spent more than £2 billion on marketing activities in 2024.

While there are more people reaching out to charities, such as GamCare, to address gambling habits, Jones is adamant the landscape has changed. However, he admitted that Peel Hunt only echoed public opinion on the matter rather than influencing discourse on the subject.

Jones explained:

“Peel Hunt assesses the way in which the opinions of policymakers have changed.

“Gambling was perceived as a mainstream leisure activity 20 years ago, but, increasingly, policymakers focus on the harm which impacts a small minority of participants and treat the regulation of the whole industry as a matter of public health policy.”

Gambling taxes thrust into the spotlight again

The debate surrounding the UK budget on gambling taxes doesn’t seem to be disappearing anytime soon, and Peel Hunt recognises the importance of it. Moreover, the effect the revised tax rates will have on retail betting has been widely discussed, with suggestions Paddy Power and Betfred could be forced into mass closures of their shops.

Recently, Reform leader Nigel Farage expressed his fears over the betting industry. He suggested most bookmakers will be gone due to the increased gambling levies, such as Remote Gaming Duty (RGD) on online casino betting, which will rise from 21% to 40% in April.

But Jones doesn’t seem too perturbed, adding:

“There is no reason to expect that this will be the case. However, the changes in Remote Gaming Duty (RGD) that will come into effect in April will impact the profits of groups which own UK betting shops. There is always a ‘tail’ of shops that are not profitable, and the need to mitigate the profit impact of increased RGD may accelerate the closure of that tail.

"It will be a while before the impact of the changes becomes clear, and it might be more difficult for small online casino operators, which we expect to exit the market."

Key things to watch

Entain is poised to release its full 2025 financial results on March 5th, while BetMGM will disclose its 2025 results a month earlier on February 4th. We will be paying close attention to these, as they could give an idea of where they are at, and how things might pan out for them this year.