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Entain plc (6GI) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. Entain plc disclosed 12 risk factors in its most recent earnings report. Entain plc reported the most risks in the “Finance & Corporate” category.

Risk Overview Q4, 2021

Source: the company's latest filing for the period ended Mar 25, 2022, filed Mar 25, 2022

Risk Distribution
12Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

No filing history is available.

Risks removedRisks addedRisks changedEntain plc Risk Factors
Risk Changed (1)
  • Accounting & Financial Operations - Risk 1
    Safer Betting and Gaming

    Safer betting and gaming is at the centre of everything that Entain does. It is the cornerstone of our Sustainability Charter, and our most material ESG issue is to ensure the highest possible levels of player safety and protection. Failure to adequately protect our customers could impact our ability to offer products and build a sustainable business. How we manage and mitigate the risk We know that only a responsible business can be a sustainable one which is why we continue to invest in our Sustainability Charter as detailed on page 40 of the Report. One of the key pillars of this charter is our Advanced Responsibility and Care™ (“ARC™” ) programme. ARC™ is an intelligent and innovative platform that uses behavioural insight and research, data science and analytics to assess risk in play, enabling us to identify, interact and intervene early with customers, who show signs of gambling-related harm. This is coupled with a range of initiatives in the area of player protection, including a $5m academic research partnership with the Harvard Medical School, to understand the causes and consequences of problem gambling, and donating up to 1% of our GGY to the treatment of gambling related issues. Strategic relevance The Entain strategy is founded on having a sustainable business which provides an entertaining and safe environment for customers to enjoy our products. An inability to adequately protect our customers would fundamentally impact our ability to achieve our strategic goals. These include being the most responsible operator, taking a scientific led approach to player protection and only operating in regulated markets by the end of 2023.

  • Corporate Activity and Growth - Risk 2
    BetMGM and US Strategy

    Effective execution of BetMGM’s strategy in the US is key to the Group’s growth forecasts. Ineffective execution of the strategy may impact the Group’s ambition of leadership in the US and opportunities for NGR growth in already regulated states and new states as they regulate. How we manage and mitigate the risk An experienced management team has been established within BetMGM which has extensive experience of both the US and the betting and gaming industry. This local management team has been supplemented by an experienced Board of industry and US specialists from both Entain and MGM Resorts. In addition, the BetMGM business has access to the specialist resources in its parent entities as well as leading professional advisers. This structure is intended to ensure that BetMGM has every chance of success in the US, a market in which it has already established itself as one of the market leaders and fastest growing operators. Strategic relevance Ineffective execution of the US strategy could impact the Group’s growth ambitions and the efficiency of the deployment of capital.

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Risk Highlights Q4, 2021

Main Risk Category
Finance & Corporate
With 4 Risks
Number of Disclosed Risks
12
+2
From last report
S&P 500 Average: 32
Recent Changes
2Risks added
0Risks removed
1Risks changed
Since Mar 2022
Number of Risk Changed
1
+1
From last report
S&P 500 Average: 1

Risk Word Cloud

recruitment and retention of key employeesretention of key employeesloss of key locationsloss of key locationsincreased cost of productincreased cost of producthealth, safety & wellbeing of customers, communities and employeessafety & wellbeing of customersdata breach and cyber securitydata breach

Risk Factors Full Breakdown - Total Risks 12

Share Price & Shareholder Rights1 | 8.3%
  • Share Price & Shareholder Rights - Risk 1
    Trading, Liability and Pricing Management

    The Group may experience significant losses as a result of a failure to determine accurately the odds in relation to any particular event and/or any failure of its price risk management processes. How we manage and mitigate the risk The Group has some of the leading expertise in trading liability management and the Group’s trading team has developed the skills and systems to be able to offer a wide range of betting opportunities. Events are priced in order to achieve an average return to the bookmaker over a large number of events and therefore, over the long term. The Group’s gross win percentage has remained fairly constant in recent years. Executive management monitor the gross win margin on a daily basis in order to ensure the long-term targets are achieved. Strategic relevance A run of customer favourable results or a mismanagement of the trading book could significantly impact the Group’s profitability.

Accounting & Financial Operations1 | 8.3%
Corporate Activity and Growth2 | 16.7%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.