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Wednesday, December 7, 2022

Betting group Entain to enter the metaverse with £100m tech investment

Ladbrokes-owner Entain is set to invest £100million in technology projects,which will include gaming in the metaverse, with £40million earmarked for UK-based innovation.

London will become the location of Entain’s first lab linked to its global innovaton hub, Ennovate, which will develop new interactive products for its customers.

The centrepiece of this and future Ennovate labs will be an Experience Zone, which will enable customers, investors, partners and employees to try out new immersive experiences in sport, gaming and interactive entertainment. 

The group, which owns Ladbrokes and PartyPoker, among other betting brands, will work alongside businesses such as Verizon, BT, and Theta Labs in developing new products via Ennovate – as well as working with some non-profit organisations to drive ‘societal and environmental’ benefits.

The Ennovate hub will develop new products and experiences for consumers 

Set to open this spring in Charterhouse Square, Farringdon, Ennovate’s first dedicated innovation lab is currently being fitted out with ‘cutting-edge technology’ to build new entertainment experiences, Entain said. 

This will include developing new entertainment products for the metaverse, Entain said, with the firm currently developing virtual reality and augmented reality experiences, as well as NFT products for its brands.

The metaverse is an immersive 3D digital ecosystem which you enter wearing a virtual reality or augmented reality headset.

It allows users to play video games, work, shop, socialise, consult a doctor or go to a gallery.

The move comes after 12 months in which the UK gambling industry has seen a wave of mergers and bumper profits but also increased scrutiny over the harmful effects of online gaming and the heavy losses some players are incurring.

Bloomberg Intelligence is forecasting that companies will be earning revenues of $800billion from the metaverse economy by 2024.

So certain is Mark Zuckerberg of the potential of this next phase of the internet that Facebook, the company he founded and leads, is now known as Meta Platforms and has been heavily pushing its virtual reality products.

Virtual reality headsets made by Oculus, which is owned by Meta, were one of the hottest properties at Christmas time. 

Jette Nygaard-Andersen, chief executive of Entain, said: ‘We want to lead the way with new, exciting products and experiences for customers and use our cutting-edge technology to pioneer innovations in sport, gaming and interactive entertainment for the metaverse.’

Chief operating officer Sandeep Tiku added: ‘Our goal is to bring the most exciting experiences in immersive sport, gaming and interactive entertainment to life as the metaverse takes shape.

‘Working with partners we believe we can achieve great things faster, both for customers and to apply these technologies and skills to benefit wider society.’

Entain shares were down up 0.86 per cent to 1,585.5p by mid-morning on Monday. Shares remain 21.2 per cent up over one year.

Earlier in January, Entain narrowed its guidance as 23 consecutive quarters of digital revenue growth came to a shuddering end.

The group forecasts making between £875million and £885million in underlying earnings for the 2021 financial year, against a much broader previous estimate of £850million to £900million.

Fourth-quarter digital revenue at the FTSE 100 firm fell 6 per cent year-on-year due to a solid comparative performance in 2020 when onerous Covid-19 restrictions led to betting shops closing and punters laying more bets online.

Like many other British gambling firms, it has been the subject of serious takeover interest from US rivals, though it has not changed ownership despite major bids being offered. 

MGM Resorts, which operates the Bellagio, The Mirage and New York-New York casinos in Las Vegas, put forward an offer worth £8.1billion at the start of last year, but Entain rejected the deal on the grounds that its value was too low.

More recently, a £16.4billion takeover proposal from online betting giant DraftKings failed, with many analysts speculating that the joint venture partnership with MGM made such a deal more complicated.

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