Dodge & Cox Increases Stake in Entain amidst Strong Investor Confidence

US mutual fund company Dodge & Cox has more than doubled its stake in the global sports betting and gaming group Entain, making it the second-largest single shareholder in the gambling giant. This increased stake can be interpreted as a show of confidence in Entain’s potential, as the company recently revealed its updated plans to improve operational efficiency.

Investor Confidence Remains High

Dodge & Cox initially invested in Entain in September 2022. The company is well-known for its diverse portfolio, with holdings in other major corporations such as pharmaceutical giant GSK and Alphabet, Google’s parent company. As of December 2022, Dodge & Cox managed approximately $323 billion in assets. Its continued interest in Entain bodes well for the gambling company, bolstering its shares by 0.11% to £954.

The mutual fund company boosted its holding in Entain from 5.01% of total shares to 10.33%, giving it ownership of 66,001,318 of the voting rights in the owner of Ladbrokes. As a result of this increase, Dodge & Cox now trails only The Capital Group Companies, holding the most significant stake in Entain at 14.81%. 

Such a significant stake increase should bolster Dodge & Cox’s influence in Entain as the company navigates the complex industry landscape by focusing on its most profitable verticals. The gambling giant recently announced its plans to scale back Unikrn’s B2C operations, marking an ongoing shift in strategic priorities.

Entain Is Well-Positioned for Further Growth

Dodge & Cox’s stake increase coincided with Entain’s Q3 trading update. The gaming company reported a 7% increase in total group net gaming revenue (NGR), including its US-facing operations. Retail revenue grew by 4% in Q3 this year, while online operations were up 9%. A further breakdown reveals that while iGaming operations rose 14%, online betting marked a meager 1% increase.

Entertain CEO Jette Nygaard-Andersen noted that the company had undergone a transformative period and had reaffirmed its focus on optimizing its market portfolio for organic growth in high-return markets. The operator plans to reinforce existing synergies within its group, drive cost efficiencies, and further bolster its management team with leading industry professionals.

While Dodge & Cox’s increased holding is a significant development for Entain, it is just one example of the growing investor interest in the global sports betting and gaming industry. The sector is well-positioned for substantial growth in the coming years, increasing the likelihood of further investments and strategic moves.