Investors who held Entain through a rejected takeover bid now find themselves sitting on a share price worth roughly a sixth of what DraftKings once offered to pay.
The US gambling giant tabled a 2,800p-per-share proposal for the Ladbrokes and Coral owner after Entain’s stock had already surged to a record 2,500p in September 2021.
That deal never closed, and the intervening years have been punishing, with the share price collapsing approximately 77% from its peak to the current level of just 476p.
A 38% decline recorded since the start of 2026 alone accelerated the damage, ultimately costing Entain its place in the FTSE 100, from which it was relegated in September.
The demotion to the FTSE 250 stands in sharp contrast to the flagship index, which has spent much of the year setting new records while Entain moved in the opposite direction.
No single misstep explains the deterioration; instead, the company has absorbed a succession of regulatory and financial blows that have compounded over several years.
A bribery investigation, which concluded in a settlement and triggered the departure of the chief executive in 2023, was followed by a doubling of remote gaming duty on online casino profits from 21% to 40%.
Brazil then introduced an online gambling ban in September, disrupting management’s international growth plans, and a fresh increase in Machine Games Duty from 20% to 25% has added further earnings pressure, costing the business an estimated £25m annually.
Management’s response to the duty increase involves closing a portion of its retail estate, though analysts note the more troubling signal is the direction of travel on UK gambling taxation.
With public finances under strain, gambling operators represent politically convenient revenue sources, and Entain also faces regulatory legal proceedings in Australia, adding another layer of uncertainty.
Despite the headwinds, the underlying operational picture offers some counterargument to the bearish case that the share price appears to reflect.
Third-quarter online revenue across the UK and Ireland climbed 14%, a result management attributes to market share gains even as the tax burden grew heavier.
The company has also maintained its full-year underlying earnings guidance of between £910m and £960m, alongside a longer-term target of £500m in annual adjusted cash flow by 2028.
Measured against a market capitalisation of roughly £3bn, those figures produce a forward price-to-cash flow ratio of approximately six times, a valuation some analysts regard as undemanding for a business of Entain’s scale.
Berenberg issued a price target of 1,080p earlier this month, a figure more than double the current share price, signalling that at least some on the sell side see significant recovery potential.
The £500m cash flow ambition nonetheless looks harder to achieve with Brazil shut, Australian regulators active, and the UK government reaching deeper into gambling company revenues each year.
Value investors watching the stock must weigh a genuinely cheap-looking multiple against a regulatory environment that has consistently surprised to the downside, with little indication the pressure will ease soon.
