BetMGM parent Entain hit by CEO departure
Jette Nygaard-Andersen calls time on spell in charge following conclusion of historical UK HMRC investigation and reported discontent among investors
BetMGM parent company Entain has confirmed its CEO, Jette Nygaard-Andersen, has stepped down from her role with immediate effect.
The Dane replaced former CEO Shay Segev in the summer of 2021 after he moved to streaming giant DAZN just six months into the top job at Entain.
Nygaard-Andersen, who did not previously have industry experience other than as a non-executive director with Entain since 2019, had reportedly come under pressure in recent weeks from activist investors who had expressed concerns over the group’s M&A activity and recent strategic decisions.
In addition, the firm’s shares have dropped by almost 40% this year, wiping billions of dollars off the value of the business.
The departure of Nygaard-Andersen and the London-listed operator’s current travails stand in stark contrast to the performance of its joint venture business, BetMGM, which it operates on a 50/50 basis with MGM Resorts.
At a recent business update event, BetMGM confirmed it was on track for its full-year 2023 financial target of between $1.8bn and $2bn in revenue, with H2 2023 expected to be EBITDA positive.
BetMGM has also committed to a target EBITDA of $500m by 2026, as it looks to further cement its third-place US market spot behind FanDuel and DraftKings.
Entain’s partner in BetMGM, MGM Resorts, has long been linked with a move to buy Entain, having previously bid to acquire the firm in 2021, overtures which were ultimately rebuffed.
Nygaard-Andersen’s exit as CEO and the firm’s share woes will undoubtedly throw up those questions again, despite repeated statements from MGM Resorts CEO Bill Hornbuckle and, more recently, BetMGM CEO Adam Greenblatt, to the contrary.
At a recent business update event, Greenblatt talked up the relationship between the two businesses, suggesting there was a “mutual respect” between MGM and Entain, something which would continue in the future.
“Whereas at the beginning, BetMGM was this plucky startup with mixed views on its potential to take a meaningful position, today that’s not the case,” Greenblatt told investors earlier this month.
“Today, BetMGM represents a strategic limb of both MGM Resorts and Entain and the support and engagement from each of those organizations reflect that,” he added.
The operator confirmed Nygaard-Andersen would be replaced in the interim by Stella David as CEO. David, currently a non-executive director with Entain, will step up this week and remain in the post until a permanent replacement has been found.
David, who also has no frontline experience of the gambling industry, previously served as CEO of whisky distiller William Grant & Sons as well as chief marketing officer for drinks company Bacardi, before moving into a series of non-executive director roles with pizza group Domino’s and Norwegian Cruise Line Holdings.
Nygaard-Andersen’s departure comes after the conclusion of the HMRC investigation into alleged bribery connected to Entain’s previously owned Turkey-facing business activities between 2011 and 2017.
As part of its court approved settlement, Entain will pay £585m, along with a £20m charitable donation and £10m in legal costs, following the conclusion of the case.
Speaking on her decision to step down, Nygaard-Andersen said: “The past three years have been rewarding and challenging in equal measure.
“The resolution of the HMRC investigation into the legacy business, which was sold by a former management team in 2017, offers a clean inflection point for me and for Entain. The group is now safe, stable, and sustainable and I believe that this is the right time to move on to other business and career opportunities.”
Entain chairman Barry Gibson commented: “Under Jette’s leadership, Entain has executed a fundamental strategic shift towards regulated or regulating markets, overhauled its governance, transformed its operations, and significantly improved its customer offering.
“We are all indebted to Jette for her dedication to steering the company through such a difficult time. “She has also led the executive team in devising a new commercial strategy that I am confident will lead to stronger organic growth and a more profitable Entain. On a personal note, I am sorry to see Jette leave the business,” he added.