Ladbrokes and Coral owner Entain warned that online gaming revenues are set to remain flat this year as it revealed gamblers are cutting their spending in the face of soaring cost pressures.
The betting giant said online gaming revenues fell 7% on a constant currency basis in its first half to June 30, with the decline picking up pace to 8% in the second quarter.
It cut its full-year online gaming revenue outlook, saying the “weaker macroeconomic environment is reducing customers’ rate of spend”.
The group guidance for flat net gaming revenues comes after it predicted in March that annual growth would be in the mid to high single figures range.
Shares fell 6% in Thursday morning trading after the downgrade.
Gambling groups saw a surge in online betting during lockdowns at the height of the pandemic, with Entain enjoying a 12% increase in online net gaming revenues last year.
But the ending of Covid restrictions has sparked a drop-off in online betting, while Entain’s latest update has revealed a further hit as the cost-of-living crisis knocks customer spending.
But Entain said trading in its 4,300 high street bookies was better than it expected, with betting volumes recovering above pre-Covid levels between April and June, driven by gaming and self-service betting terminals.
Overall, group net gaming revenues rose 18% on a constant currency basis in the first half, although growth eased back to 6% in the second quarter.
Chief executive Jette Nygaard-Andersen said: “The macroeconomic outlook is uncertain; however the underlying performance of our business remains strong.
“With an increasingly recreational customer base and relatively resilient revenue, we remain confident that our customer focus, diversification and proven ability to grow both organically and through M&A (mergers and acquisitions) will enable us to deliver further progress against our strategy.”