Entain Appoints Ricky Sandler of Investor Eminence Capital to Board of Directors

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Entain, the European gambling giant and 50% shareholder in BetMGM, has appointed Ricky Sandler to its board of directors.

Sandler is the owner and founder of New York-based Eminence Capital, which owns shares equivalent to 2% of Entain.

This move comes amid a challenging time for the company. 2023 was a turbulent year that saw investors, including Sandler, criticize the company’s direction, as well as a $739 million fine and the resignation of CEO Jette Nygaard-Andersen.

That settlement fine was enough to hold the dubious honor of the biggest U.S. gambling business loss of 2023 in our recent recap.

Sandler’s appointment is expected to bring a fresh perspective to Entain’s board, improving investor relations and creating a more shareholder-value focused approach.

Sandler’s Critique and Expectations

Prior to Sandler’s appointment, he was openly critical of Entain’s strategies throughout 2023, particularly lambasting the company’s decision to acquire Polish operator STS Group for $776 million.

This move, which represented about 8% of Entain’s market capitalization at the time, was deemed “perplexing on many levels” by Sandler, reflecting a broader sentiment of dissatisfaction among shareholders.

His critique highlighted a growing concern over Entain’s direction, citing its lack of focus on the booming U.S gambling market via its 50% share in BetMGM, alongside Las Vegas-based MGM Resorts International.

In the wake of this criticism, the company’s leadership faced increasing pressure to pivot their strategy.

Weeks after Sandler’s criticism, Entain also settled for a $739 million fine by UK lawmakers. That charge was over a potential criminal investigation into its previous operations when known as GVC Holdings.

That all culminated in the departure of CEO Jette Nygaard-Andersen, who was reportedly unpopular among shareholders.

This leadership vacuum is being temporarily filled by Stella David, a longstanding ally of Entain’s Chairman, Barry Gibson. However, with Sandler’s induction into the board, expectations are set high for a more aggressive focus on maximizing opportunities, particularly through BetMGM.

Perspectives and Expertise

Sandler’s new role will see him join Entain’s People & Governance and Capital Allocation committees, with the prerogative to influence the selection of an additional nonexecutive director, mutually agreeable to Eminence and Entain.

This indicates a significant level of influence and suggests that his perspectives will be integral to the company’s future strategic decisions.

“I am pleased to welcome Ricky to the board of Entain. Ricky has a deep knowledge of our business and a firm belief in the quality of our operations and substantial growth opportunities,” said Entain Chairman Barry Gibson in a statement.

“We look forward to benefiting from his perspectives and expertise as we work to drive value for all Entain shareholders.”

The news of Sandler’s appointment was met with a positive market response, as Entain’s share price saw a 3% increase.  

This reflects the broader market’s optimism about the potential impact of Sandler’s involvement.

It also shows the influence significant shareholders can have by publicly criticizing the direction of a company or its leadership.

Hedge fund HG Vora holds 18% shares in ESPN Bet operator Penn Entertainment. This week, it vocally critiqued Penn’s operations in a Securities and Exchange Commission filing. Like Eminence Capital with Entain, HG Vora also asked for representation on Penn’s board.

Meanwhile, Sandler will be aiming to help steer Entain from a troubled 2023 into a more profitable 2024. It will be interesting to see what the company’s new strategies might be as they evolve over the upcoming months.

“Entain is a robust business with brands, a unique technology platform, and enviable positions in key geographies around the world,” he said in the same statement.

“I look forward to working with my fellow directors to help Entain achieve long-term success and create lasting value for its shareholders.”

As well as its 50% stake in U.S. sports betting and online casino operator BetMGM, Entain also owns STS and veteran British bookmakers Ladbrokes and Coral.

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