Entain Considers Exit from Central and Eastern Europe Markets

According to a report by Reuters, Entain is reviewing strategic options for its Central and Eastern Europe (CEE) operations, potentially marking a significant shift in the gambling operator’s regional strategy. The CEE business was established in 2022 following the Croatian SuperSport acquisition and subsequently expanded through the purchase of Polish betting company STS for approximately £750 million in 2023. Despite generating solid earnings of £183.7 million in 2025, up from £170 million the previous year, the division faces mounting pressures. Recent UK gambling tax increases are expected to add around £200 million in annual costs, prompting management to reassess the unit’s future. The strategic review examines various options, including a potential sale to existing stakeholder EMMA Capital.

Entain Explores Sale of CEE Stake to EMMA Capital

The joint venture structure between Entain and EMMA Capital originated following the Croatian SuperSport acquisition, with the transaction valued at €920 million. EMMA Capital sold a 75% stake in SuperSport to Entain in 2022, subsequently contributing its remaining shares to form Entain CEE while retaining a 25% stake in the new entity. The partnership structure shifted in 2023 when Entain CEE acquired STS, Poland’s largest bookmaker. The Juroszek family, previous majority shareholders of STS, subscribed for 10% of Entain CEE shares, reducing EMMA Capital’s stake to 22.5%.

The venture includes contractual options permitting either partner to alter the ownership structure after the third anniversary of the original transaction. One scenario under consideration involves selling Entain’s majority stake to EMMA Capital, though discussions remain at an early stage and no agreement has been reached. EMMA Capital previously demonstrated financial capability when funding its share of the STS purchase price, approximately EUR 160 million, from its own resources.

SuperSport itself was founded in 2000 and developed into Croatia’s largest gaming company. STS, established in 1997, offers sports betting through both branch networks and internet platforms, with its product portfolio including live card and virtual sports games.

Why Is Entain Reconsidering Its Eastern European Strategy?

Multiple factors converged to prompt the strategic reassessment. The CEE division experienced a sharp performance decline in Q1 2026, with net gaming revenue falling 6%. Online revenue dropped 1% whilst retail plummeted 30%. Poland showed positive momentum following its migration to the CEE SuperSport platform, yet Croatia encountered difficulties when customer-friendly sports results produced a sports margin decline of 7.1 percentage points year-over-year due to a football-heavy sports mix.

This Q1 2026 underperformance contrasts sharply with the division’s 2025 full-year results, when CEE net gaming revenue grew 5% on a constant currency basis, driven by 6% online growth. Croatia’s SuperSport delivered particularly strong 2025 performance with net gaming revenue up 7%.

The UK tax burden intensified pressure on Entain’s overall portfolio. Management took an impairment charge of £487.7 million against the UK business related to gambling tax increases. The company expects to mitigate approximately 25% of the incremental UK tax impact in 2026 through group-wide optimization initiatives. From 2027, expectations upgraded to offsetting over 50% of the UK tax burden. With these optimization pressures mounting and CEE’s recent underperformance, the region’s strategic value faces renewed scrutiny.

How Has the CEE Business Performed Financially?

Entain posted better-than-expected annual profit of £1.16 billion for 2025, yet the financial picture carries complications. Adjusted net debt stood at £3.64 billion at the end of 2025. The UK tax burden adds approximately £200 million annually to the cost base, even after mitigation efforts. When debt rivals stock market value, shareholders hold a more leveraged claim, with debt paid first and equity absorbing swings in cash flow assumptions and refinancing terms. A recurring UK tax hit shrinks the free-cash-flow buffer supporting that leverage.

The STS acquisition, completed in 2023, brought specific financial contributions. STS generated net gaming revenue of PLN 663 million (£121 million) in FY22, marking 17% year-over-year growth. Adjusted EBITDA reached PLN 273 million (£50 million). The company delivered 24% net gaming revenue compound annual growth since 2020, with adjusted EBITDA growing 34% annually. Management expected the acquisition to prove earnings accretive in its first full year of ownership, supported by over £10 million in run-rate synergies.