Entain Plc (ENT) Earnings Call Transcript

Good morning. Thank you for joining us today to mark this new chapter in our history. I'm joined by Rob Hoskin, our Chief Governance Officer, who will take you through our sustainability pillar; and Rob Wood, our CFO, who will join us for questions at the end. Over the last decade, the gaming sector has transformed with new technologies, products, platform and ways of playing. In this time, GVC2 has changed beyond all recognition. Today, we are the world leader technology-enabled entertainment business with innovation, ambition and player protection at our core. We have the best people right across the business. We have driven the group to grow at tremendous rate. Last month, we announced our 19th consecutive quarter of double-digit online growth. And I can only see this space accelerating as we grow our core business, leading the U.S., enter new markets, capture opportunities with new audiences and other areas of digital entertainment. In fact, I believe we can double or even triple the size of our business in the next 5 years. And in a moment, I will tell you why. But it is important that you know I do not want to grow at any cost. We must do this in a responsible way. Under my leadership, we will evolve the business. We will grow in a way that is underpinned by sustainability, responsibility and player protection. In recognition of this and to mark a new chapter, we are today announcing a fresh vision and corporate identity. We plan to change our name to Entain plc. It is a name we believe captures the journey we've been on and, more importantly, our future direction and purpose. [Presentation]

As Entain, we will be bold, ambitious and disruptive. Our vision is to be the world leader in sport betting and gaming entertainment. And our purpose is clear: to revolutionize gambling to create the most exciting and trusted entertainment for every customer. This means providing a richer and safer experience for all. Our strategy is divided into 2 pillars: sustainability and growth. I'm certain that this approach will guarantee long-term success, certainty and value for our customer, our people and our shareholders. We can deliver on these ambitious because of our greatest asset, our technology. Technology is and will remain the beating heart of our business. It is what powers us and distinguish us from our competitors. You will have heard me say it before, but it is important. Unlike our peers, we own 100% of our technology. This is critical. We have a strong and growing digital teams across the world with 3,000 world-class developers, specialists, software engineers and data scientists who deliver one of the most advanced platform inside and outside our industry. Owning all technology means that we can operate at scale. We manage 2 million sport bets and 21 million Poker hands dealt each day. It means that we have inbuilt flexibility, which guarantees a consistent and resilient service across multitude of mobile and desktop formats. We operate in so many markets that ability to provide customers with content that's relevant, not just locally but personally, means that the operator who can provide the best choice will be the leader. We aggregate over 6,000 games for more than 130 game content providers, and we offer over 250,000 events across 90 sports. These are all promoted by our advanced recommendation engine so that we can ensure customers get what is right for them. Underpinning all of this are the protection mechanism built into our system throughout the customer journey at every touch point of their experience. The most powerful thing about our technology is that it gives us the flexibility to support our growth, whether that is in existing or new markets, new categories or new audiences. Our technology is built so that we can do all of this. At the same time, we are not constrained by the ambitions of capital allocation or third parties, multiple clients. We are entirely in control of our own destiny. And we deliver at speed because we don't have to coordinate with third parties to get stuff done. Let me give you some examples, integrating new businesses. Our proven integration process enable us to onboard new businesses quickly and rapidly deliver costs and revenue synergies. We've demonstrated this with the integration of bwin, the Party brands, Ladbrokes and Coral, Foxy Bingo, Crystalbet and Neds. And we are about to do it with our most recent acquisition in Portugal, Bet.pt. During COVID, we completed the Ladbrokes platform migration. We launched in 3 states in the U.S. and now launching in Colombia. Others would have struggled to do all of this simultaneously as we have done. But most importantly, our technology enable us to properly understand problem gambling so that we can take a tailored approach to each player. And we do all of this while ensuring that our platform is secure and well as ready for new and emerging technology such as virtual reality and 5G. The agility, flexibility, scale and speed is why we see our technology as our competitive advantage. Our technology also empowers greater efficiencies in terms of absolute cost of our technology. We continue to drive this down on a like-to-like basis. So as we grow, our technology becomes more cost efficient relative to our revenues. We are also undertaking a rigorous review of our operational costs, and we'll update you on progress as we go. Before I talk to you about our growth opportunities, let me pass you over to Rob to talk about sustainability.

Thank you, Shay. As Shay said at the outset, becoming Entain isn't just about changing our name. It's about starting a new chapter, repositioning the company and revolutionizing the industry as we commit to sustainability, to responsibility and to player protection. We know that a successful business is a sustainable business. To that end, today, we are launching our new sustainability charter, the 4 cornerstones of which are regulation, responsibility, corporate governance and our people and communities. As part of this charter, we are committing today to only operating in nationally regulated markets by the end of 2023. Currently, 96% of our revenues come from regulated or regulating markets. But we have decided to exit a number of markets where we see no viable route to regulation in the near term. We are starting that process today so that by the end of this year, 99% of our NGR will be from regulated or regulating markets. We will keep an eye on the regulatory timetable for the remaining 1% and, where possible, work closely with the relevant in-country authorities and trade bodies to help develop a robust framework that protects players and maintains the highest regulatory standards. Operating in regulated markets provides greater clarity and certainty for our business. We are also becoming much more proactive in our engagement with regulators. As you all know, U.K.'s 2005 Gambling Act will be going through a much needed review that will set out the regulatory framework for years to come. It will address all forms of gambling in the U.K. and is an opportunity to address the fringes of the industry as well as dealing with the mainstream. We fully intend on contributing to this process in a meaningful way, and we'll argue for a balance between protecting the minority at risk while supporting a healthy entertainment experience that appeals to the majority and is commercially viable for operators. As we have seen, the effective changes made by gambling operators over the last couple of years have resulted in a meaningful reduction in problem gambling. It is critical now that any revised legislation is not too draconian as this will have the unintended consequences of pushing customers, particularly those at risk of problem gambling, towards using non-U.K. licensed operators. This will simply exacerbate the problem and result in reduced tax revenue for the chancellor as we've seen in other jurisdictions. We expect it to explore the applicability of state limits based on sound analysis and evidence to address the issues that affect the small minority of players who may run into problems. This is a much more practical, pragmatic and viable solution than the calls from some antigambling campaigners. We will work with our peers and betting and gaming council to ensure that the review is appropriately informed. As can be seen on the right side of this slide, we have started some of our own insight work to support this. The process should take around 18 to 24 months and will bring the much-needed clarity and stability that we all want to see. We are now taking a more scientific approach to safer gambling so that our interventions can be targeted and personalized. To add rigor, discipline, objectivity and accountability to this process, we have recruited Professor Mark Griffiths, a leading safer gambling academic and data scientist, who will review our existing policies and systems and propose improvements based on evidence with measurable metrics and performance indicators. Mark's work will draw on our existing multimillion-dollar partnership with Harvard Medical School, which will provide open-source research to support a greater understanding of problem gambling issues. This research will be fed into the next evolution of our player protection, ARC. This new and innovative advanced responsibility and care program puts our exceptional technological know-how to good. A more scientific approach will enable us to be more effectively protect the smaller minority of customers who are at risk of gambling harm. We are increasingly providing more personalized proactive protection measures for our customers. Using advanced BI, our specialists and data scientists have built the first stage of this. It will track player behavior in real-time and identify problem play before it escalates. Each player will have a dynamic risk rating that automatically updates in line with their play patterns and other criteria. An alert system interacts with customers when prompted and triggers an appropriate intervention. We are committed to raising the bar higher. And from next year, responsible gambling metrics will be added to our group-wide KPIs and incorporated into our remuneration policy. This commitment, combined with the market exits, will likely reduce EBITDA by around GBP 40 million in 2021 but is the right thing for us to do as a responsible operator and the right thing to do for customers, our people and shareholders. Turning to corporate governance. We recognize that to be a world-leading company, we need to adhere to the highest standards of governance in all areas of our operations. Our Board has been strengthened and revitalized over the last 2 years, notably with Barry Gibson becoming Group Chairman in February. We now have a robust corporate governance structure and policies in place that befit our status as a FTSE 100 company. Furthermore, last month, we announced 2 Board appointments, with David Satz and me joining the Board to reinforce the commitment to regulation, governance and responsibility. As the Board and Nominations Committee is focused on introducing greater diversity to its membership, it is anticipated that further changes will be made in due course. The final cornerstone of our sustainability charter is our people and communities. Our culture gives us a clear edge over our competitors, and we're proud to have the best people in our industry. You've heard the speed at which we can make changes in our technology. It's our people that make this possible, delivering day in, day out. Making GVC the best place to work is more than a label. We want to continue to attract and retain the best talent and embrace diversity of thought and experience because our people will ensure we remain bold, diverse and ambitious and reduce world-leading products. To ensure that, we trust and empower our people to do great work for our customers and build brilliant global careers here. We're imaginative. We set the pace and we push boundaries using technology to do more exciting and innovative work than ever before and do the right thing. We're proud of our inclusive culture where we attract more diverse candidates from a wider range of sectors than ever before. Over 36% of our senior leaders are women, an increase of 8% compared to last year. And we look after our people. Over 98% of our workforce was paid 100% of their salary through lockdown, and we offered all colleagues a range of medical health care initiatives and virtual learning programs. We invest in leading development and progression for long-term careers here, and we promote internally as a priority. The most notable example is being Shay and Rob Wood's promotions. As I've said, we have a strong philanthropic track record. The next step is to formalize these activities, and I'm pleased that we will be launching the Entain Foundation, which is committed to donating GBP 100 million over the next 5 years. We're also proud that we retain our membership of the FTSE4 Good index for the third year, and we're recognized by the Carbon Trust for our carbon reduction initiatives. One of the things that I think we are almost proud of is our new Pitching In program. This provides support to grassroots initiatives. In summary, we are committed to doing the right thing for our customers, our people and our communities. Before I hand back to Shay, let me just play a short video on Pitching In. [Presentation]

We talked about a sustainable business for the future and driving long-term value. Now let's talk about growth. We see growth opportunities in 4 key areas: one, the U.S.; two, our core markets; three, new markets; and four, new audiences. BetMGM is positioned to become the leading operator in sport betting and gaming market we estimate would be worth at least $20 billion within the next 5 years. Let me pick out some key stats. In the 9 states where we currently operate, we estimate our overall share of sport betting and iGaming to be 18%. We benefit from MGM's significant retail presence. And if we strip that out and just look at our online share, it's still an impressive 17%. However you look at the numbers, we are on the target for our 15% to 20% market share and leading position. This is set to increase is our investment in marketing and partnerships, such as with Yahoo! Sport and integration with M life, start to materialize and drive customer acquisition. In New Jersey, we are performing fantastically with around 23% of iGaming market share. We launched in Tennessee on 1st of November and have had a really strong start, taking a significant market share in the first days. All our teams came together and created a clear blueprint for launching on day 1, and we are really excited about upcoming launches in Michigan, Pennsylvania and Iowa. The chart on the right shows how the momentum is building as we get ready to be in over 20 states by the end of next year. And remember, because of our technology, BetMGM benefits from a significant cost advantage. One of the more exciting opportunity to engage with new customer is through our partnership with Yahoo!. With around 50 million customers and 9 million Fantasy Sport players, we have been working hard to offer them a seamless experience using the BetMGM platform. I'm delighted that we have now delivered on that. And customers can place a bet on a game they are watching on or play games while staying with the Yahoo! Sport account. Don't forget that Yahoo! Sport platform is one of the only places that customers can watch every NFL game live. We've seen significant growth in FTDs from Yahoo! Sport such that it is currently our leading affiliate. One of the many advantages of our joint venture with MGM is our access to the 34 million M life customers. The power of this relationship is already delivering. 25% of recently acquired BetMGM customers are active M life customers. Our technology is now integrated, BetMGM with M life, so that M life customers are able to seamlessly bet and game online. And we know these customers can be twice as valuable. Yet, another advantage for our joint venture with MGM is the omnichannel opportunity. BetMGM enjoys prominent advertising in and on MGM properties as well as benefiting from integration into website and apps marketing to both M life and non-M life customers. It is a truly omnichannel experience for BetMGM customers. This is important because we know that customers who play through retail as well as online typically spend more. The single BetMGM app went live during October, and it's already driving value. We have launched a range of new products such as Easy Parlay and Parlay Generator that enable customers to place aggregator bets across multiple games. We've also been building advertising around our new brand ambassador, Jamie Foxx. Here is the advert that he did for BetMGM, which differentiates us from our competitors and resonate with sport fans. [Presentation]

We have delivered continuous and steady growth, 19 quarters of double-digit online growth to be specific. At our last quarterly update in October, we saw a 2 years compound annual growth rate of 17%. And I'm pleased to say that this performance continues. The sporting calendar has remained active. Margins have been favorable, and gaming remains above pre-COVID levels. This delivers a full year EBITDA up this year by approximately GBP 30 million to GBP 40 million. And this offsets the costs from the current and forced store closure as a result of COVID lockdowns that we announced on the 2nd of November. As a result, the guidance we gave with our third quarter of GBP 770 million to GBP 790 million for EBITDA this year remain deliverables. The trading performance through the next year adds approximately GBP 50 million to EBITDA expectation for 2021. We see growth opportunity for several reasons. We have inbuilt growth in our core markets. 93% of revenues is from markets that are growing more than 10% a year. And outside the U.K., 81% of our markets have less than 20% online penetration. As I've already told you, we have world-class system developed by world-class people, and those systems generate vast amounts of data. Owning the entire system means that we are able to pull that into a single data lake across markets and brands and develop models that are much more comprehensive than our peers, improving both customer experience and digital marketing. Many of our competitors have fragmented technology, meaning needs to reconcile data for multiple resources, making them less agile and less accurate. We can apply those data analytics across our markets, including the U.S. Within 24 hours of onboarding a new customer, we know very quickly what their lifetime value will be and what products they would prefer. Our technology integrates with marketing channels like Google and Facebook, allowing us to benefit from their enhanced capabilities such as dynamic, granular audience segmentation. This enable us to optimize our marketing spend and drive better ROI. As an example of a retail marketing, your horse doesn't run, we'll let you know really quickly and give you some alternative betting options. We have a clear long-term strategy for retail. We must remember that today, the retail market in the U.K. is worth around GBP 2.5 billion and our European retail business remains in growth. And COVID has shown us that customers want to enjoy the retail experience. Volume in our retail estate came back to within 10% of our pre-COVID levels. In the long term, customers will, of course, migrate to online. But in the meanwhile, we have a clear strategy to maximize our share of the GBP 2.5 billion. Our technology is key. We've developed our own point-of-sale system that integrates with our platform so that with a single view of the customer, streamlining that online transition. We are building our own software for the self-service betting terminals. That reduced costs but also adds to that database of customer experience. We actively use retail to encourage customers to use our apps and our loyalty cards. And let's not forget that retail operation in the U.K. generates around GBP 100 million of cash each year with around 3,000 shops would get significant advertising benefit as well. There are significant opportunities across the globe with over $50 billion gross gaming revenues from regulated markets in Africa, Latin America and Central and Eastern Europe, twice as much as the size of our business today. We have the products, the technology, the people and the global brands. Some of these markets are different from the way we operate elsewhere. For example, many of the countries in Africa are more reliant on mobile, with many still operate on 2G or 3G. That means we have to adjust our content. There are also low-stake markets, with customers placing low-stake accumulators bets across a large number of game. So we are looking at what sort of technology and expertise we would need to enter markets like that. As you know, we announced the acquisition of Bet.pt last month. Portugal is a recently regulated and rapidly growing market that we expect to be worth around EUR 450 million by 2023, and we can grow Bet.pt within that. It is this sort of opportunity that we are focusing on. We are proud of our track record of value creation through M&A. We are able to deliver that because of our technology and product portfolio. We can take a business, provide our products, data analytics, digital marketing skills and our technology platform to drive cost and revenue synergies. We have integrated 20 businesses in the last 5 years. But just looking at the last 3 major acquisition here, we can see that in each case, we increased value for shareholders. Just picking out Crystalbet in Georgia, it was a small private business that was reaching its limits. We leverage our technology, give it our expertise and access to our leading product and sport book and increase the value to our shareholders by over 2x. Crystalbet now is the #1 operator in Georgia. We are seeing some exciting opportunities emerging in consumer trends. They are vast and top markets out there. The gaming market is huge and growing every day. Currently, there are around 2.7 billion gamers in the world. 100 million people watch the League of Legend World Championship. This is a huge and growing audience. Gaming is fast becoming the hub of other digital activities, creating a whole new ecosystem where customers interact with the online market, including betting. This sports betting market is expected to be worth $1 billion by 2024, and we anticipate exponential growth from there. Furthermore, new technologies such as 5G and virtual reality will make all forms of betting more engaging. These emerging trends creates new audiences. We have invested in understanding who they are and how our offering can be tailored for them. These audiences tend to prefer mobile, are keen on technology and like new betting concepts. It's an exciting and growing market, of which we will be at the forefront. This short video should give you some context. [Presentation]

In summary, our investment in technology has enabled us to deliver strong growth over the last decade and outperform our competition. Our continued investment in technology will see us go further in existing as well as new and innovative markets. We see tremendous scope to grow our business through partnership in gaming, in e-sport and interactive entertainment. The strategy that I've outlined today under sustainability and growth will achieve greater certainty by being in regulated markets, greater geographical diversification and higher-quality revenue streams, delivering for all our stakeholders, our customers, our people, our communities and our shareholders. Thank you all for listening. I would like to turn over to questions.

[Operator Instructions] And the first question we have is from Michael Mitchell from Davy.

Just 2, if I could, both on the growth side of the presentation. First of all, on new markets, and maybe we could use Africa as an example, could you just kind of set out your thoughts in terms of market entry, either some of these kind of geographies and confidence that you go into organically? Or is it all by inorganic means? And specifically to Africa, maybe you could just kind of set out the operator landscape today, how advanced it is and whether some of those operators actually operate across multiple geographies. That's question number one. And then question number two, somewhat related in terms of investments. Clearly, you're setting at a pretty significant growth opportunity across multiple verticals. How should we think -- or how do you think about investment across the group going forward? And are you willing to kind of invest significantly at the expense of near-term EBITDA to secure future medium-term growth?

Thanks, Michael. So I'll take the first question. Maybe I give Rob Wood to answer the investment allocation question. In terms of Africa, it's a market we've been studying probably for some time now for the last 12 months or so. They are quite exciting, I would say, more than 20 regulated markets in Africa, which allow online sports betting with a license. Clearly, as we put our strategy, our focus is only on regulated markets. What we did learn in Africa is that the technology in order to penetrate the Africa, operate in the African market, it's required some localization, both in terms of content and in terms of reach for the customers. For example, mobile payments is very popular in Africa. So there's quite a lot of integration. So I guess it will be a combination of some of our existing expertise, our brands, like bwin as an example, our marketing expertise and our existing technology, and probably with some other expertise, we will look externally to combine it together and to go to the African market, which I hope we can be able to do something in Africa somewhere next year. As I mentioned, there's quite a lot of regulated markets. The focus clearly will be on digital. I mean countries like Tanzania, Uganda, Kenya, they're all interesting markets, which we look into it. Rob, do you want to take the second answer?

Sure, happy to. So I think the first thing to say is that because we have such a strong cash generation profile over the next few years, we do have the flexibility to invest, invest in M&A, invest in the U.S., pay dividends and delever all at the same time. If you look at our track record, some of our investments, particularly M&A, have a near-term return, very strong EBITDA creation. The U.S., though, is the opposite. That's an example of investment where EBITDA is clearly much slower to come through. So we're willing to do both. But clearly, if we're buying businesses that are already in our space, Bet.pt is an example in Portugal, that we are looking for near-term EBITDA generations with that type of deal.

And our next question is from Ed Young from Morgan Stanley.

I've got 3, if that's okay. The first is on the emerging trends and expansion to new audiences. I appreciate that's somewhat of a vision you've laid out, but you have named and focused on e-sports a number of times in the presentation. What's your current mix of e-sports in the portfolio? And should we expect acquisitions in adjacent spaces? And I guess wider -- then e-sports, how wide could it go? Could it involve social casino or broader than that? Where do you set the limits of your horizon? The second is on current trading. It's obviously very strong to get an upgrade this late in the year. So can you talk about what you're seeing that's giving you the confidence that this volume is going to stick? And should we expect that in sports and gaming? Should we expect to see growth in those next year? And then third is it was a bit of a throwaway line, but just checking, you said that you're reviewing the cost base. Is that just business as usual in terms of cost discipline? Or is there potentially some margin opportunity there?

So I can take the first question on e-sport and other emerging trends, and Rob Wood, if you can take current trading and the cost base. So I'll start -- yes, I mean, again, one of the things that we tried to deliver through this presentation as well is that -- our strong position as a tech-driven business. Again, one of the big thing that -- the big asset that we as a group is our technology. We are a very tech-driven business, which enable us also to expand and using this advantage to other emerging categories. As we know, the world is moving fast. Consumer behavior is changing. The new technologies are emerging. So we are looking into beyond just e-sports, things like virtual reality, 5G, another form of gaming, how does this affect our existing core business and how can we expand to new forms of technologies and new forms of consumer trends as well. I wouldn't limit also for anything. I mean pretty much anything that I think we can create value, again, leveraging our brands, our technology, our marketing expertise, our licenses, everything that we can leverage from that and create value, I think we should definitely look into it. e-sport is probably a trivial one. Again, it's a growing trend. We see probably e-sport today is a small percentage of our revenues. It's probably a single low-digit of our sports revenues, but we do see it growing. I mean, specifically during pandemic, sport events were canceled. You've seen more bet types on e-sport events. But if you park that, e-sport communities are growing. Gaming or general gaming become more and more popular. It become more a popular form of general entertainment, and there are full ecosystems around gaming, and betting is one of them. So we see a great opportunity for this for the future. And I believe that this is the right time for us to start making the first investment and the baby step into position ourselves as the future leader also in the e-sport. And we will not limit also there. I think other areas like skill games, social casinos, other form of gaming and entertainment, interactive entertainment, we should look into it as well. Rob, do you want to take the 2 other questions?

Sure. So firstly, the one on current trading. So yes, the strength has continued into Q4. The first thing I'd say is that the GBP 30 million to GBP 40 million upgrade to online, that's roughly half margin and, therefore, nonrecurring and half volume. And really, what we're seeing is strength in volumes that we've seen over the summer. Yes, there has been some tapering off, but not as far as we thought would happen. And therefore, we've got increased confidence that those volumes will not just carry on through Q4 but also into next year as well, and that's really the heart of the GBP 50 million upgrade to expectations next year. And specifically, it's both sports and gaming in fairly equal mix. On the last question around costs that were referenced in the presentation, we do constantly look at opportunities to make ourselves more efficient. And I think the answer to your question is it is more in the camp of efficiency program rather than BAU, and you'll hear a little bit more about that next year. So yes, should lead to margin accretion as a result.

And our next question is from Simon Davies from Deutsche Bank.

Three from me, please. Firstly, can you talk a bit about ESG? It's obviously an increasing focus for investors. As a data-led business, is there more that you think you can be doing both in terms of disclosure but also in terms of target setting? And secondly, you talked about 3,000 tech developers employed within the business. What do you estimate your annual technology costs are, CapEx and OpEx combined? And do you think that, that needs to rise given your increased focus on technology? And lastly, there's a slight throwaway line. You mentioned the push to move to your own SSBT platform. When do you think that might happen?

So I'll take the SSBT question and maybe a bit about the 3,000 tech. I think, Rob Wood, if you can take the cost of debt and maybe Rob Hoskin can take ESG. So I'll start with the SSBT. Yes, I mean, we -- again, as a tech-driven business, we have all of the capability now to develop our technology. We already own 100% of full technology on digital space, I mean, something which comes very, very clear today on the presentation. We see it as a -- not only just as advantage, it's like a core DNA for us to own the technology and to be able to be flexible, control our destiny, give customer choice and aggregate all the customer interaction into a single database, which allow us to better understand our customers or DNA and provide them a better service as a result of it. We've been running some big technology investment into retail in the last 2, 3 years. We just deployed a full point-of-sale system, electronic point of, system into the call shops and about to conclude it next year into the Ladbrokes shops, which, again, correct -- or connect the betting shops into our overall gaming apps. And our plan is to extend it also to the other technologies in -- of the betting shops as well, including the self-service betting terminals. we are currently -- this project is undergoing. I assume it will be another -- again, it's very hard to estimate. We're not going to rush into it. We're going to do it properly. I would assume it's another 12 to 24 months before it will be fully operational, and we're not going to rush into it. We're going to build it properly. Just maybe to touch one more thing before I will hand to Rob Wood is that, yes, we are -- again, technology is very key for us. We have more than 3,000 IT people in our organization, including developers, software engineers, data scientists, and we're making heavy investments into technology. I mean it is just one example of many. We will continue to invest further into technology as well. And in terms of figures, maybe, Rob, better you would mention.

Sure. I'll take that. So from -- if we just look at technology and product costs, you'll get to around 7% to 8% of our online NGR. And we think that compares favorably, of course, to competitors who are typically paying double digits for those services. And then as Shay referenced, we can clearly scale beyond that and get that percentage further down over time as you saw from the charts in the presentation.

Then -- yes, Rob, take ESG.

Just on ESG issues, I think this is very much a focus of Entain. We continue to be a member of the FTSE4 Good index, which assesses practices and public documents against a set of -- series of criteria around -- on governance, social practices, environmental commitments. And also in relation to the environmental piece, we've obviously been working with the Carbon Trust to play our part in reducing our environmental footprint. I think where we would look now is to show greater transparency around our practices. And I'd anticipate you will see that early next year in the annual report.

And our next question is from Christine Zhou from RBC.

A couple of questions on the U.S., please. Firstly, in terms of the actual customer experience on your BetMGM app, how do you think you differentiate that compared to peers? I suppose, linked to that, how sticky do you find your customers? And what is it that brings them back to BetMGM over other apps? And secondly, just in terms of your responsible gambling strategy, how are you viewing this in the context of the U.S. specifically? And I guess that's in light of the amount of marketing spend that's coming through both for you and for the industry more generally as a whole. And are you worried that there's not enough focus on this industry-wide in the U.S. in particular?

Yes, okay. So let me -- I mean let me -- I would take both of them, and Rob will help me hit it on the RG. In terms of customer experience, I mean, again, clearly, us owning our own technology give us a great advantage, I mean, versus others -- other peers who operate in the U.S. market owning part of the technology and not the full. And this gives us the ability to be more innovative. I mean, today, one of the things that I mentioned is that our ability to integrate, for example, the M life program and the old sports into a seamless journey with the BetMGM. We also launched some innovative accumulator enhancements, which are quite unique in our offering in the U.S. We are first to market. I mean our strategy now, as we did in Tennessee, we did in Colorado, and we hope to do it in Michigan and other states as well, is to be first to market in other U.S. states as they open up. And we continue running ongoing customers' feedback, voice of customers and improving our user experience, which I think gaining really good momentum. I would say that on gaming, I believe that we have the best product in the U.S. market. You can see it also from our market share in New Jersey, which is probably the most competitive market in the U.S. and also our market share in rest of Virginia. In terms of iGaming and I think through -- again, through our technology, this investment is continue with -- our thousand of developers will be able to continue and develop this product further. And I really think actually that the long-term winner in the U.S. is the business which will have the best product and the best service and ability to be asked because of this capability to all our full technology and localize it. And maybe the last piece on this, which is important, again, because we are on the full tech, it means that every customer interaction with this product is actually logged in our database. And as a result of it, we have better ability to understand these customers and then localize the experience for them better. Again, this is a journey. And I think as we will progress, we will continue to [ resolve ] based on that. As you've already seen, that we're making a good progress. Now in terms of RG in the U.S., maybe I'll just state a few words, and then Rob can elaborate further as well because we're doing some great stuff there as well. I mean, clearly, one of the key advantages of us as a group is that we're operating in many other regulated markets. Therefore, we mean that we have quite a lot of expertise in terms of responsible gaming, with the right controls and the best practices in the group. And when we launched in the U.S., clearly, we use many of these best practices already for day 1. And that all technology that we have in other markets, like in the U.K. or like in other markets that we operate are also available for the U.S. market and for the U.S. customers as well. And actually, I see GVC has a great potential to bring our responsible gaming knowledge and deployed in the U.S., which is relatively a young market. And today, we launched a big program, which is, to be honest, it's evolution of something which we're doing for some time, which we call it ARC, our Advanced Responsibility and Care program, which the core of it is us being even more proactive, protecting customers, again, using the data and the technology that we have to try to predict awful behavior before it happened and create proactive and active interaction with customer and put some controls. Rob, anything you want to add to this?

Yes. There are various initiatives that GVC is working on with various partners in relation to the U.S. and responsible gaming. So as you are all aware, we have a 5-year research partnership with the division on addiction with the Harvard Medical School and that's focused on customer behavioral patterns as well as problem gambling-related issues. And that's really focused on the U.K. and the U.S. and the research coming out of that will be shared and available publicly so that, as an industry, we can learn, develop and evolve around better practice on responsible gambling matters. We've also got an exclusive partnership with EPIC Risk Management. To provide lived experiences with responsible gaming classes across 14 U.S. states. And we are working with various sporting associations in universities, so that we can teach people about responsible gaming matters. And we also have various partnerships with the University of Las Vegas around educating on remote gambling and matters related to that. And with Seton Hall Law School, where, again, we're trying to get across to the point Shay made our learnings from other markets on sort of best practice and responsible gaming matters. We're also a member of the National Council on Problem Gambling in the U.S. And we partnered up with RG 24/7 in relation to the U.S. to provide gambling industry regulation and RG Training. So there were a number of initiatives there which we're very proud to partner with those third parties. And I think we're very much doing our best in relation to developing responsible gaming know-how in relation to the U.S. market.

And our next question is from Kiranjot Grewal from Bank of America.

Okay. I just have a couple of questions. Just as you were talking about government and regulation, the scientific approach and technology that you'll be rolling out for customer protection. To your knowledge, will you be one of the first ones to do this? Or does this potentially already exist? Then secondly, outside of the U.S., what are the markets you're most excited about? I know previously, you've spoken a lot about Brazil. Could you perhaps update us on your Brazilian performance and how you see that market develop? And then just last question. In the longer run in the U.S., do you think the business will end up being more heavily skewed to iGaming than the rest of your business just because that's where a lot of the strong performance we've seen so far has been?

Kiran, so let me start with probably the second question, and Rob Wood will add with numbers around Brazil, then we can talk about just gaming and then about governance, the first question as well. So I mean, as I mentioned, I mean, it's probably, again, from the small research, we run, there are more than 60 regulated markets you can get a license and operate online sport betting and gaming outside the market we currently operate. Our focus that we put -- lay out today is to focus only on regulated markets or markets that are regulating in the next short-term that we can engage with authorities and work with them. The focus is that we know that this market outside the U.S., our other markets in Europe, there's quite a lot of countries such as Portugal, which we just entered Portugal a few weeks ago, in Central and East Europe, countries in Latin America. I mean you mentioned Brazil, but there are other countries, I mean, like Colombia. We are about to launch any day now to Colombia as well. I mean, Mexico will be quite interesting as well. And Africa as well, which we did mention this as well. I mean, so if you put into it, all of these regulated markets, which can operate, again, our brands are relevant, our technology is relevant. And it's quite an exciting opportunity for us. In terms of Brazil, I mean, Rob Wood, do you want to mention numbers about Brazil?

Sure. I'll only mention that year-to-date, Brazil continues to grow extremely well, second only to Australia of our major markets.

Great. Now in terms of U.S., U.S. in terms of -- yes. I mean, I believe that, again, Sportsbook is currently more widely regulated in the U.S. But we do see our gaming as a lucrative market as well. I mean it's hard to say. I mean, clearly, player values in iGaming are higher than sport betting. You see it in New Jersey, and probably you will see it in other states as well. So yes, I do think that iGaming can be a very interesting, attractive market in the U.S. I mean, we clearly with the partnership with MGM, with MGM brands with our best products, on iGaming, I would believe that we will clearly lead that. And I think it could be yes, attractive market. I think probably many states regulate currently only sport betting will probably will regulate Poker and casino as well. So I think on the long term, it will be very, very lucrative. On the first question on the governance, can you just repeat it to make sure I answer exactly what you're asking?

Well, you mentioned you're going to be taking a scientific approach when it comes to customer protection. Is that -- are you one of the first people to take that approach where you have a very logical and clear way of pulling customers out and picking up bad gambling habits, I suppose?

I mean, I would imagine that we are not the first one. I mean, there are a number of smaller businesses, startups, which we'll be looking at and try to partner where we're doing similar things. But we're probably very unique on this because, again, we sit on quite a lot of data. And we're owning our own technology as well, which again, put us in a very unique position to actually do it. So maybe there might be some initiative in the past to do something like this. I think we are in a very unique position to do it properly because, again, we own our full technology, which means we also own the full interaction with the customer and every customer interaction going to our database, meaning we can analyze it better, and use our data scientist teams, which now has been also expanded by Professor Mark Griffiths, with his knowledge to develop these predictive algorithms. And based on that to adjust the customer experience and to make sure that we're doing whatever we can do, the maximum to protect customers.

And our next question is from James Rowland Clark from Barclays.

3 questions, please. Just following on from what you're just answering about the U.S. in terms of the long-term opportunity. I mean, clearly, you're showing that you have excellent products in New Jersey for gaming and you're gaining a lot of market share there. How do you think about your ability to be the leading player in the U.S. when considering also sports betting and some of your peers having the opportunity to eventually cross-sell DFS players and other sports platform players into sports betting that might get them ahead of you? So do you think you therefore might need to do some sort of acquisition in the U.S. to kind of leverage a new sports betting platform or brand. So that's the first question. And then on esports and digital gaming. Is this a sort of stand-alone expansion into new audiences? Or do you see that as potentially a way of you can effectively sort of cross-sell those new customers into traditional online sports betting and grow that part of your business? And then finally, on an interview this morning, you said that you might be interested in William Hill's non-U.S. assets. So how would that sits in the sort of priority list versus other sort of new markets and M&A and effectively other growth opportunities?

Great. Okay. So let me take them one by one. So in terms of the U.S., I think we are quite confident that we will be a leader in this market, if not the leader. Again, it's very early on the journey of this market as they're just getting regulated. I mean tenancy just launched pretty much a few weeks ago. So it's still ongoing. And again, if you look into a few things, which I want to emphasize related to your question, is one is that we really just started 12 months ago, right? I mean, where while both DraftKings and FanDuel as you mentioned, been going for longer. And you already see the impressive progress we've been doing with 17% or 18% aggregated market share for the state that we are operating, again, showed the capability that we have in terms of, again, our product, our marketing, our brand, our market access, et cetera. So -- and we see this momentum continue. I wouldn't expect us now to -- the market share to grow drastically immediately, but I do expect us to every month to show small progress. And if you measure it over the next 12, 18 months, I would expect us to continue to grab further market share and start taking to a further leading position. We do have access to DFS as well. I mean, we have the partnership with Yahoo! with Yahoo! Sports, which now has been more integrated or properly integrated to BetMGM. So now if you are on the Yahoo! Sports DFS platform and you want to place a bet in BetMGM, you don't need to leave the app. You can do it during the Yahoo! Esports app, which I think it's very good progress, and we already see quite good engagement. But I think the key advantage we have actually besides Yahoo! is actually the M life program. And I mentioned it earlier today as well. I mean M life has more than 30, 3-0 million customers on its database. And even more importantly, it's an active database, meaning post pandemic, when people back to travel and will visit Las Vegas, and will go to and stay in the MGM properties, they will become M life customers. And we are integrating -- already integrated, and we'll continue to integrate the BetMGM experience to the M life experience, meaning it will be -- feel almost a natural journey if you like sport, if you like, iGaming to stay in MGM property and continue to bet with BetMGM. We did mention today that we already see quite encouraging numbers, 25% of our recent acquisition players are actually M life customer. And we also know that this customer are very high valuable. So if you're putting the M life, the Yahoo! and the fact that we have a very strong product and technology capabilities and the fact that we are continue grabbing more and more gradually market share, I'm very, very positive about our U.S. future. Now esports, I mean you put rightly 2 options in terms of esports or to crowd, to audiences. I mean, the strategy is actually to look into both of these. One is, naturally, sport betting can -- sport betting fans, people like sports, who also like esports, they can go currently to the existing business that we have to the bwin brands, the Ladbrokes brands and put also bets into esports events as well. But I think even the more interesting future opportunity is for us to come with a new product, and this is what we'll be looking to do, which will be more attractive to the gaming communities as well. This is more like network like Twitch and do some partnership with other game providers from that. And be the trusted leading, wagering business that can go to that ecosystem. And I think this is probably where we see it quite attractive. It's probably will be done by extracting our own capabilities, again, our technology, our product, our know-how, which probably might be even some acquisition in this area as well to enhance our capability there as well. And the last point on [ Eilers ], yes, I mean [ Eilers ] -- I mean, the non-U.S. assets of William Hill, I mean, I did mention this morning on an interview. The reporter asked if we'll be interested to look into it. Yes. I mean, as I said, never say never. Clearly, we have a strong track record of integrating and acquiring business and create synergies from that and accelerating them. And I think we have all the platforms for that. I mean, we will do it clearly if it will be accelerating for our shareholders. So there is the price for that. We'll not be interested in the retail business. I mean, retail, we are quite pleased with the current rate of business that we have. So we might look into the digital business, but I wouldn't put it -- I would not put it as a high priority on our list.

Can I just ask 1 follow-up? What proportion of customers in the U.S. came from the Yahoo! Sports platform? You said 25% for M life. How much from Yahoo!?

I don't think we are quanting this number yet. But the only thing I can say it's grown drastically in the last few weeks because the integration is just launched. And again, if you look a few months ago, it was pretty much -- if you are on Yahoo! Sports, you get a link and you go to the BetMGM. What we have now is that if you are on the Yahoo! Sports app, you can stay on the app and you go to the BetMGM and place a bet. So this clearly drastically create better, but it's just launched few weeks. So I think it will be quite irresponsible for my end, just to throw you numbers. I think it will require more time, but it looks really good.