The gambling industry was taken by surprise on 22 July 2024, when B2B stalwart Gavin Isaacs was announced as the next Entain CEO.
From 2 September, the Australian would lead a B2C operator for the first time, having made his name at B2B suppliers such as Scientific Games and Aristocrat.
Rumoured candidates such as former Sky Bet CEO Richard Flint and current BetMGM CEO Adam Greenblatt (now being linked again) proved to be just that – rumoured candidates, and Isaacs took to arguably one of the toughest roles in gambling.
Succeeding Jette Nygaard-Andersen was always going to be a difficult proposition, not because of any particularly big shoes to fill – with all due respect – but because of the public criticism her M&A activity had come in for.
As such, when Isaacs (who has a history of leading companies through M&A activity of his own) was hired, I proffered that the appointment would lead to a high-profile merger: that Isaacs was brought in to guide Entain through a sale process.
Well, five months later, the industry is sitting in surprise once again, following Isaacs’ resignation “with immediate effect.”
On the surface, it looks as though Isaacs had come in with the intention of genuinely turning the ship around. And, to a degree, he was already succeeding.
August saw pre-Isaacs stocks hit a low of £5.03 ($6.32), but Entain’s share price had returned to £8.20 by 20 December, with a series of positive financial announcements also being well received by the market.
“An imperative shortlist would include: B2C gambling experience, a heavy focus on compliance, a savvy M&A record, an ability to work cooperatively with the Board and a strong working knowledge of Entain’s internal operations”
But stocks came crashing down last Tuesday (11 February), slumping around 12%, as Isaacs’ resignation was announced.
Interestingly, shares have recovered by exactly that amount since, sitting at £7.44 as opposed to a low of £6.30. But that still leaves Entain with a number of questions about its long-term future, chief among them being: who can lead this fallen market leader – and do they have any realistic chance of restoring prosperity?
Why did Isaacs leave?
Gambling Insider understands Isaacs did not have any disagreement with Entain’s Board of Directors over strategy. In terms of financial planning, both parties were on the same page and there appeared to be genuine progress with regards to financial performance.
What was suggested as a primary reason for Isaacs’ departure was the predominantly B2C nature of the role, given his B2B experience, and that five months in he had decided this aspect of the role was not for him.
Essentially, though, this sounds like a drawn-out experiment. Sure, Entain may reap the benefits of a few months of the veteran’s work, but if the B2B-B2C divide was such – it should really have been obvious at the interview stage.
Without any suspicion this might be a factor in a soon-to-be-confirmed departure, I asked a very relaxed Isaacs about the B2B-B2C divide during his keynote speech at ICE Barcelona.
His response was that both sides of the fence involve largely the same things and that he was getting used to any subtle differences.
That certainly clashes with the reasoning suggested for his departure just a couple of weeks later, with the added pressure of running a FTSE 100 organisation not lost on the Australian.
The Per Widerström effect
In hiring Isaacs, Entain may have been looking for a similar uplift to that seen at Evoke after the appointment of Per Widerström.
There is a belief among many that Per Widerström will restore Evoke/888 to its former glories.Who can Entain turn to for the same kind of hope?
Widerström began life as Evoke (then 888 Holdings) CEO in October 2023 and has gone from lambasting its financial performance to overseeing genuine growth within the space of just under 18 months.
Evoke has been precise with its M&A and, although its share price is not currently higher than when Widerström took over, there have not been any drastic dips either.
Granted, Evoke’s market capitalisation is more than 10 times smaller than Entain’s, but the right person was nevertheless selected for the role. The Swede comes with a successful background in B2C operations, compliance and regulated markets.
Isaacs’ background was not as seamless a fit and, whether he would have transformed Entain or not, his potential legacy is now one for believers in the multiverse and alternate timelines.
Where next for Entain?
Isaacs’ premature departure adds to a timeline consisting of a record £585m penalty in November 2023, a recent investigation into KPMG’s audit of the operator and the departure of other key personnel such as Barry Gibson and Grainne Hurst. So it would not be overly dramatic to suggest Entain’s next CEO appointment is nothing short of crucial.
“Whether Entain returns to its former glories, stagnates as a fallen giant or ends up going the M&A route, its next CEO appointment will play a significant role in determining which of those paths it undertakes. For once, it might not be the time to think too far outside the box”
Even looking past Isaacs’ short tenure, the legacy of previous CEOs lives on to this day. Kenny Alexander’s dealings are still leaving their mark in terms of compliance difficulties, while Nygaard-Andersen’s tenure is easy to look back on as a time of missed opportunities.
So who can Entain turn to next? Star Sports has once again taken the rather fun approach of opening a betting market on who will land the role, with current Interim CEO Stella David ahead with odds of 5/1.
Entain Commercial Managing Director Andy Hicks follows at 6/1, with BVGroup (BetVictor) CEO Andreas Meinrad, the aforementioned Greenblatt and Betfred CEO Joanne Whittaker (I really can’t see this one happening) also in the running.
It is worth noting, though, that no one on the same frontrunners’ list last time ended up securing the role. Eventual CEO Isaacs wasn’t even featured.
Promoting from within, ensuring internal knowledge and a sense of familiarity from the next CEO, could well be worth considering; especially as Entain’s last two CEOs lacked that very experience of Entain itself.
Depending on her interest and availability, David would make sense given her experience in various entertainment and consumer sectors – and the fact she is now Interim CEO for a second time (and was already Chair).
But it is perhaps less about the individual and more the characteristics and background Entain requires.
Ladbrokes remains one of Entain's leading brands in the UK, both in terms of online and retail betting. Entain's new CEO must ensure it can increase market share versus the likes of bet365, Sky Bet, William Hill and Paddy Power.
An imperative shortlist would include: B2C gambling experience, a heavy focus on compliance, a savvy M&A record, an ability to work cooperatively with the Board and a strong working knowledge of Entain’s internal operations.
That immediately narrows the shortlist down, especially if the operator is to look closer to home and not outside gambling. If we were to be slightly lenient and count living through Entain’s series of mergers within the ‘savvy M&A record’ column, that might widen the options a little.
There is one candidate that fits the above bill, of course, outside of David and Hicks – and that’s BetMGM CEO Greenblatt. Naturally, MGM Resorts may have something to say about any approach for him but, if Entain is to make a definitive move, there will always be some element of risk.
Ultimately, the industry giant needs a CEO who is happy to dedicate years of their professional career under great pressure but with a not-impossible goal in sight of once again competing with Flutter Entertainment.
Isaacs, who had effectively come out of retirement, was a departure from the norm – but ultimately not the right profile for the long term.
Whether Entain returns to its former glories, stagnates as a fallen giant or ends up going the M&A route, its next CEO appointment will play a significant role in determining which of those paths it undertakes. For once, it might not be the time to think too far outside the box.
