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Hello, everyone, and thank you for joining the Entain 2026 Q1 Trading Update. My name is Lucy, and I'll be coordinating your call today. [Operator Instructions]

It is now my pleasure to hand over to Stella David, CEO, to begin. Please go ahead.

Thank you, and good morning, everyone, and welcome to today's Q1 results call. I am delighted to be speaking to you again and sharing another strong set of Entain results. I'm also very pleased to be joined by Mike Snape for his first Entain update. So welcome, Mike, and it's great to have you on board.

This morning's call will broadly follow our usual format. I will begin with an overview of the quarter, then Mike will take this opportunity to share some initial reflections before he runs through the Q1 trading performance, and then we will finish with your questions.

So let's get started. Entain continues its positive trajectory. Our diverse and globally scaled portfolio of podium positions is a powerful engine, which is proving it can deliver consistent and sustainable growth. We maintain our relentless focus in executing against our strategic priorities, which saw us exit last year with strong momentum, and this has continued so far this year.

I'm also very proud of the leadership team we have in place who are focused on increasing both our pace and our capacity, enabling us not only to do more but also continue to improve our delivery.

Now turning to Q1. The group delivered results in line with expectations. Net gaming revenue was up 3%, within which online was up a healthy 5%. Importantly, Q1 being in line was despite most markets experiencing particularly customer-friendly sports results. So a better reflection of our underlying performance and momentum is volume growth.

In Q1, our volumes were up 8% with an impressive plus 10% for online. Our online NGR and underlying volume growth has not only accelerated from our 2025 exit rates, but continues to come from across our portfolio, and I'm delighted that Q1 marks our eighth consecutive quarter of online growth. The U.K. once again was a standout performer, delivering another great quarter. And we fully expect to have gained both share in online and retail. This sets us up well to withstand the impact of the draconian tax increases better than the competition.

And a point worthy of note, we paid GBP 574 million in U.K. taxes in 2025, whilst the growing black market pays 0 tax. Hence, we remain focused on lobbying government to take action to stop the advertising and promotion of these unlicensed sites.

Australia's recovery continued and is now back to meaningful year-on-year growth, and we expect to continue to having made solid market share gains. So a great performance, which reflects the new management's disciplined and reinvigorated approach. Elsewhere, Spain, Canada, Greece, Georgia and New Zealand, all continued their double-digit NGR growth.

A market that's been steadier than anticipated this year is the U.S. Now I won't repeat it in detail, but as you heard from Adam earlier this week, BetMGM continues to execute its plan, deliver profitable growth and remaining rational in a noisy market. This disciplined approach allows them to remain comfortable of delivering EBITDA still within their guided range, albeit at the lower end despite softer top line growth.

We have strengthened our foundations, improved operational execution and are back to delivering high-quality top line growth. And we have a strong pipeline of activities to continue that journey. These include the many opportunities from AI enablement, improvements to player journeys and exciting new features such as side bet jackpots, revamping the U.K. Ladbrokes app, and our sporting interaction brand in Canada going forward in a very positive way. The wider rollout of SportingBOT, our new AI assistant ahead of the World Cup, as well as deepening our engagement with sports fans across Europe with new campaigns and partnerships.

We're focused on driving greater efficiency, effective capital allocation, and as I have flagged before, we are fully committed to strong cash generation. So just to summarize before I pass to Mike.

We have started 2026 with strong momentum. The business is well positioned, getting sharper every day, and we are navigating the impact of the U.K. tax raises as well as anyone. We are reiterating our full year guidance and remain confident in generating over GBP 500 million of cash annually from 2028. We have a strong team and a busy pipeline of initiatives, and I'm excited about the opportunities in the year ahead. And while it is early days, Q2 has got off to a strong start, and we look forward to the World Cup in June.

And on that note, over to Mike. Mike?

Thanks, Stella. Good morning, everybody. I'm delighted to be here. Before I talk through the Q1, and Stella has really captured the key headlines already, just a few thoughts on first impressions and a flavor of what we've been focusing on in my first few weeks. I think it goes without saying this is clearly a strong business with a model that's performing well.

The full year results in March, and this update is testament to that. We're growing volumes, we're growing share and we're building growth on growth. The front end of the business, the customer-facing part, if you will, is delivering, and we see continued opportunity to do that across all of our markets, a diverse portfolio that gives us the ability to both trade through different macroeconomic conditions and most importantly, absorb or mitigate financial shocks such as the U.K. tax increases. That said, as you heard from Stella at the full year and today, there is far more for us to do to unlock value here.

We have significant potential to optimize our cost base, both to improve operational leverage as we continue to grow volumes and also importantly, to accelerate investments in driving the top line, taking advantage of all the opportunities available across the portfolio, particularly in markets like the U.K., where the tax increase has changed the competitive landscape. This does not mean a new project. It's not time bound with an end date or a target. It's putting in place the right model to support the business through the continuous improvement and driving growth. And today, from what I've seen, we're only in the foothills.

We also need to ensure this growth converts to cash. Alongside driving volume and revenue, cash, deleveraging and balance sheet flexibility are our top priorities, and you can expect our approach to capital investments and other actions going forward will reflect this. This, again, is an area where we see a lot to go for and will be a consistent theme we talk to going forward. So lots of exciting opportunities ahead. Lots for me still to learn, but Stella and I are looking forward to sharing more of our thoughts and our plans at the interims in the summer.

Coming back to Q1. And as a reminder, all the growth numbers that I quote today are in constant currency. It's worth highlighting that alongside NGR and sports margins, we've included volume growth in the release today. It's a metric we've often referenced in remarks and in previous presentations, and we think it gives the cleanest picture of underlying performance, removing some of that noise from sports margins. So as Stella has already said, we've had a strong start to 2026 with the momentum from last year not only continuing but accelerated into Q1.

Group NGR was up 3% with strong volume growth of 8%, again evidencing the underlying health of our business, adjusting for that sports margin noise. Online NGR was up 5% with volumes up 10%. Customer-friendly results pulled sports NGR down 1%, but was more than offset by ongoing iGaming strength, up 9% in the quarter. Similarly, in retail, softer sports margins were supported by wages growth in gaming for overall volume growth of 3%. Importantly, this total result was driven across the portfolio and with volume growth accelerating through the quarter in our largest online markets.

The U.K. and Ireland turned in another fantastic result. Total NGR was up 6% with online at 13%, all the more pleasing, given we're lapping a 23% comparator from last year. Retail also continues to perform well, flat on a like-for-like basis, and we see customers continuing to engage strongly with our gaming and sports terminals with that volume and wages growth reflecting our leadership position on the U.K. high street, which we're taking every opportunity to capitalize on. We can't make any claims on market share yet as the data hasn't been released. But when it does come through, we're confident it will show we are continuing to recapture share. That high-quality retail offering remains an important omnichannel differentiator for our online business, and we believe makes us best positioned to navigate the U.K. market as it digests the recent tax changes.

Moving on to international. Also a strong start to the year across many markets with volumes up 9%, but offset by unfavorable sports results. International Online NGR was 2% higher with gaming performing well, up 8% dampened by a 1.4 percentage point year-on-year sports margin headwind against tough margin comp and reflecting customer-friendly sports results, particularly in February. That adverse sports results impact was most pronounced in Brazil and Italy, both of which saw a particularly challenging margin but pleasing volume growth, especially in Italy where volumes were double digit year-on-year.

We also continue to grow strongly in many other markets. And again, a special mention to Australia, which was up 12%, the first double-digit NGR growth quarter since 2022 as we continue to see the benefits of new leadership and the fantastic work the team are doing there. International Retail, as many of you know, is predominantly Italy sports betting. So this was also impacted by sports results, but we remain very confident in the quality of our estates and future growth opportunities.

On Entain CEE, it's again, really a story of sports results offsetting healthy volumes in Croatia. Given the product mix weighted particularly to football betting, a minus 7.1 percentage point sports margin drag in Croatia pulled NGR growth lower for the quarter. Poland, however, benefited from the migration to the CEE sportsbook and the revamp of the app.

So in summary, we've seen a good start to the year. We delivered strong volume growth across our markets, and that's allowed us to digest unfavorable sports results. And so we remain firmly on track for our FY '26 expectations, but there's plenty more for us to do.

I'll now pass to the operator and open the call for your questions.

[Operator Instructions] The first question today comes from Ed Young of Morgan Stanley.

Two questions, please. First of all, on the U.K., you cited some shift in the competitive dynamics. I wonder if you've seen anything so far already. Obviously, the U.K. growth numbers are very strong, momentum to be entering that change anyway, but I wonder if you could just give a bit more color there on what you're seeing. And then second of all, a similar question on Australia. As you mentioned a long time since we've seen double-digit growth. How much of that is market level support? How much of that is share gains?

And I guess, how do we stitch together the result with the changes from the leadership change we've seen down there and the changes that we made to business?

Ed, nice to hear your questions. Let me try and answer those 2 for you. So I think the first question was, have we seen -- what impact have you seen in the U.K. since the taxes went up at the beginning of April. It's really too early to say. I think the more important point is that we have definitely been increasing our share in the U.K. in advance of those tax increases. And part of our strategy is to continue to increase share.

And certainly, in gaming, if you look at the market, there is a long tail of Tier 2 and Tier 3 operators all having very small percentage shares of the market. So within the regulated sector, we definitely see there's an opportunity to continue to build on that share gain. And we will see over time just how much of an impact the black market has on the overall growth of the regulated sector. But as I think I said in my opening remarks, it's very important that we continue to lobby with government to encourage them and others to stop the inroads into the U.K. black market. But we're very happy with where the U.K. is performing so far.

And then the second one was on Australia. Yes, it's great that we've seen double-digit growth. We believe that is absolutely driven by market share gains. I think the team there is doing a great job. We've been very strong historically in racing. They're expanding the focus more to sports in general now there, which is a really good opportunity for us because the market is much wider than racing, even though that's very important. So I think the team there have got a good strategy, and we're hopeful that we'll continue to build share as we go forward.

The next question comes from Estelle Weingrod of JPMorgan.

First, can you comment on the phasing of margin progression, H1 versus H2? I mean you have the U.K. gaming tax starting in April, which will, therefore, be more impactful in H2. But the phasing of the World Cup-related investment is likely to be more H1 weighted in June, I believe, and organic growth will likely be more H2 weighted given sport comps across international and CEE. Any color would be helpful.

Another question on the U.K. as well. Can we get -- maybe it would be helpful to get a clearer read on what's driving the U.K. market, particularly sports. How do you see the competitive environment evolving into the World Cup? And is there anything notable you'd highlight perhaps in terms of latest product developments? And if I may, just the last one on Brazil. We've now seen unfavorable spot results for like, I think, over the last 3 quarters. Can we get an idea of what's the underlying volume growth in Brazil at the moment?

Okay. So I think you've got 3 questions there. One is about margin progress during the year. The second one is more of a read on the U.K. and the competitive environment and Brazil unfavorable sports results.

I think if we pick up the modeling questions offline with the IR team and just go into the U.K. a bit, that's probably be best.

Yes, I think that's probably the easiest way of dealing with it. So we'll do a follow-up with IR. In terms of the U.K., in terms of what's happening. I think we've been on a journey of increasing market share over the last 18 months or so. Our customer journeys have improved dramatically. We've had new features that have been added in. We've got new features that continue to come out. We've got better Bet Builder, both in football and in horse racing. We've also got a new Ladbrokes experience, which is coming out in advance of the World Cup.

In terms of the kind of phasing of activities, yes, the World Cup starts in June, but it does go on into July. And so that way it does straddle both halves of the year. I think my observation on the World Cup, it will be great for volumes. But it's going to be a bit of a roller coaster ride because in the early days, there are many more teams playing and margins could be wildly fluctuating because there'll be high scoring lopsided games.

I think towards the second half of the World Cup, it will be more equally based competitors. And I think there'll be some lovely upsides there, particularly given that most of our markets are in the World Cup, with the exception, I think, of Italy and Poland who were expected to qualify. Most of our other markets are actually playing in that. And any other comments on that, Mike?

I just say on the U.K., and it relates back to Ed's question as well because we see the huge potential on the cost base in the business, we've really not taken our foot off the gas in terms of driving that U.K. business forward. Many other companies, I think, given the severity of the U.K. tax increases will really be pulling back off growth driving investment. We've absolutely not done that.

We're taking advantage of everything that we see in the market at the moment. And this is merely the start of what we think we can achieve with that U.K. business.

Yes. Okay. And then I think on Brazil, yes, you're absolutely right. Sports margins have been very poor in Q1. Volume has been up. So that's a positive. But I think it's something that everybody needs to watch out just in terms of that is probably one of the worst performing sports margins that we have seen in the short term, and let's see how that goes. But underlying volumes have been positive, which is good news. And have we covered all the questions there? Okay.

The next question comes from Ben Shelley of UBS.

Congratulations, Mike, on the new role. A couple of questions from me. One, in terms of your group online sports wager growth or even more broadly, group volume growth. Can you give us a bit of an idea how much do you think you've benefited from recycling in the quarter? Or rather how much do you think -- how much of this is simply strong underlying business performance?

And then I guess on online volume growth versus the full year guidance, online volume growth is at 10% in the quarter and you have the World Cup ahead of you alongside momentum across the business. How are you thinking about that 5% to 7% online revenue guidance for the full year?

I think on the recycling point, it's really difficult to say. And clearly, there's a lag in terms of the data that we get through from customer accounts and as we close the quarter, but it's something that we'll definitely start to look at for the previous quarter, more as we get through this one. On the volume piece, as you can see, we're reiterating the previous guidance that we've had. I would draw your attention to the fact, and I think you've done it for me that the volume growth was significantly stronger than that. The NGR growth was at the lower end of that range because of the sports margin.

We're very focused on continuing to drive volume across the rest of the year, and we're very comfortable with the guidance that we've got out there.

[Operator Instructions] The next question comes from Rasmus Engberg of Kepler Cheuvreux.

I was just wondering about the World Cup. How much of your 5% to 7% online growth is sort of relating to the World Cup and how much is underlying?

Okay. So on the World Cup, thanks for the question. It's a good thing for us. It's not as big a thing as you might think. I mean it's probably worth about 1% or something like that across the year is really where we would anticipate that to be as an upside. It's bigger than the Euros, but it's not as dramatic as you would think. It's important also to recognize the point I made earlier is that we shouldn't over commit to what it's going to give because I think there will be some volatile sports margins, particularly in the early half of the whole activity.

What I think it does is provides a good recruitment drive opportunity because that's when you get a lot of people are interested in signing up to apps. So I think it's more about the recruitment side of it, where I would say you get the big value from it. It's an exciting activity. I think it will be good for some of our markets, particularly the ones which are in the same time zone. So big markets like Brazil will be very engaged in it. Markets like Australia and New Zealand also will be very engaged because it's about basically watching it live. But that's kind of where we're at. It's a positive, but it's not a major driver of overall numbers this year.

And sorry, just a follow-up question. From an earnings perspective, I guess, but for this year might be invested in attracting and reactivating customers rather than driving earnings in the short term?

Exactly. It is more of a recruitment driver than anything else, yes.

The next question comes from Pravin Gondhale of Barclays.

Firstly, on Poland, are you back to winning your sort of loss shares in the -- lost market share in the country now you have done the migration? And what's your sort of outlook on the iGaming regulation in Poland? And is there any sort of update on iGaming rollout in New Zealand since full year results and other regulatory updates elsewhere in the world?

Okay. I'll take that one. So in Poland, we've always had a process of making sure we have maintained a profitable business. As I think most people know, there have been a lot of new entrants to the market that have gained share, but at a very high cost. What I think is encouraging is -- and I think before I go that far, I think we make the vast majority of all profit that is made in Poland based on our common sense approach to the numbers. It's true, we did lose share.

I think what we're seeing now is some encouraging signs of starting to gain share back off the back of continuing to support the brand, which is very strong. Also, the migration, as you mentioned, onto the Croatia Sportsbook is bearing fruit. And so we're optimistic for the future in Poland.

In terms of iGaming legislation, I think it is significantly in the future. I mean the current regime there is not open to iGaming at the moment. So I think in the medium term, we would suggest that, yes, legislation for iGaming will come through, but I wouldn't be putting into any forecast right now. If you go to New Zealand, iGaming is going ahead, going live at the end of '26, beginning of '27. There's going to be a toleration regime put in place from May.

What's exciting about that is we have the only legal betting sites, which is with TAB, the New Zealand government relationship that we have. And so when iGaming comes out, there's going to be like 15 licenses that are going to be allowed, of which we will have TAB, which will be the only one that will be doing casino and sports. And we're hoping to have 2 other brands as well out of those 15 labels.

So our outlook for New Zealand and iGaming is very positive. But the majority of the impact of that will start to hit from 2027 when we can start to advertise and promote iGaming.

The next question comes from Jamie Bass of Citigroup.

Just one question from me, please. Stella, it's a follow-up on what you were saying there about using the World Cup as a recruitment driver. Just wondering if you have any data from previous World Cups or potentially the Euros on retention once you have sort of acquired customers who are downloading the app for the first time. Once the World Cup is over, do you have any data on whether they then engage in other leagues such as the Premier League?

So we have lots of data about retention and value of customers. We have a team who work on -- I lost the word actually. I've got a cold, so my brain is a little bit foggy. But performance marketing, that's the word I was looking for. Performance marketing. Our team in the performance marketing across most of the world now are really, really strong at getting -- understanding the payment, paybacks, the recruitment efficiency that we get from investing in areas like this. So actually, it's kind of day-to-day BAU stuff that we do with that team. It's a 365 sports team that do most of our performance marketing around the world, and we would apply the same rules to that as we do for the World Cup as we do for any recruitment drive. So we're very hopeful that we will get some strong retention off the back of the activities we do.

And just to add to that, the performance marketing discipline and model that we have here is one of the most impressive things to me that I've seen at Entain coming from a consumer retail background. And so we're very careful to make sure that we don't waste money. Lots of people, obviously, in tournaments like the World Cup will bet and then never bet again until the next World Cup. And we have a very, very good model to try and identify and weed out that type of thing so that we don't waste marketing money on it. That's reflected in the level of marketing that we do around the World Cup.

So we're absolutely in it, and we're absolutely open for business. But you won't see us blast it all over ITV and Sky because we just don't waste money in trying to lean in too heavily. We do think about paybacks in every pound that we're spending.

I appreciate it. I've got my meds with me. Any other questions coming through? No.

We have no further questions at this time. I'd like to hand back to Stella.

Thanks so much. So look, thank you so much for participating. We're really pleased with how the year has started. We believe we're firmly underpinning our 2026 expectations. And I'm very confident that our strong momentum positions us well to seize opportunities ahead. and to be a long-term industry winner. I myself and Mike look forward to speaking to you at the interims. And of course, if you have any follow-ups, then please do contact the IR team who will definitely be there to help. And on that note, thank you, and goodbye.

Thank you.

Good morning, everybody, and welcome to Entain's 2025 Results Presentation. I'm delighted to be here to present a strong set of results. I'm joined this morning on stage by Rob Wood, our CFO and Deputy CFO. And I also have members -- by the way, can you hear me? Good, good. Okay. Always helps in a presentation to be heard, I think. Anyway, I'm also joined by the IR team here in the audience. We also have senior members of the executive team in the audience as well. And we have our new CFO designate, Michael Snape, who's in the front row as well.

So welcome to everybody. And now on to the agenda. I'm going to start with the headlines and some of the highlights of our strong progress. After that, Rob will then take you through the financials and provide you with the guidelines for 2026. And then it's going to be back to me to discuss our strategic delivery, how our priorities are evolving to further accelerate our performance and why we have confidence in our pathway to earnings growth, margin expansion and cash generation, including our conviction that we are going to hit at least GBP 500 million of annual adjusted cash flow from 2028.

And then finally, I will briefly wrap up before we open everything to your questions. But before I actually do move on to 2025 financial performance, this is the first time that I have spoken publicly since the U.K. budget back in November. The U.K. government's decision to dramatically increase taxes on the gambling sector was extremely disappointing. It opens the door to the illegal black market who pay no tax, do not have a license and offer no player protections.

However, during this period of turmoil, we will invest wisely in the U.K., and we will seize the opportunity to gain share from the long tail of subscale operators who, quite frankly, are ill-equipped to withstand this impact. Okay. Now turning to our results. 2025 has been a good year for the group. We delivered against our strategic priorities and achieved a strong financial performance with EBITDA for both Entain and BetMGM ahead of expectations. Importantly, growth was broad-based and underpinned by strong volume growth, which demonstrates the underlying health of the business.

Online volumes were up 7% year-on-year in 2025. And impressively, it was up 9% in Q4. Throughout 2025, online business consistently delivered growth, and we now have 7 consecutive quarters of revenue growth online, and that is despite starting to lap some tough comps. The U.K. continues to be a standout performance, but also there are markets like Spain, Canada, Greece, Georgia, New Zealand, all showing strong double-digit growth. And our joint venture, BetMGM, produced an excellent year of strong and profitable growth. We also enjoyed efficiency improvements. Entain's EBITDA was up 8% year-on-year to GBP 1.16 billion. And including our share of BetMGM, EBITDA was up an impressive 28% to GBP 1.244 billion.

The EBITDA outperformance is stronger than expected and -- the EBITDA performance and the stronger-than-expected cash return from BetMGM has driven a meaningful improvement in our adjusted cash flow, again, ahead of expectations. So our improvement journey is working and it is delivering. Our diversified portfolio of podium positions provides resilience and scale advantages that matter more than ever now. Building on this momentum, we have evolved our strategic priorities to further optimize how we work, enhance profitability, drive meaningful cash generation. So in summary, 2025 has been a strong year. The business is in good shape, and we're confident in our ability to not only navigate the challenges, but to emerge stronger. And with that, I'll temporarily hand over to Rob.

Thanks, Stella. Good morning, everyone. So for the eighth and final time, I'm delighted to be delivering the full year results presentation, and it's a pleasure to present strong numbers again before I hand over the baton to Mike. It's a familiar format for me this morning, so let me jump straight in. And as usual, all revenue and EBITDA growth numbers that I quote are in constant currency unless stated otherwise. So starting with revenue, and I'm really pleased with the growth we delivered across the whole group. Total revenue, including 50% of BetMGM, was up by nearly GBP 0.5 billion to GBP 6.4 billion or up 8% year-on-year.

Within that, online NGR ex U.S. was up -- was GBP 3.9 billion, up 6% year-on-year. And barring adverse sports results in Q4, that growth number would have been 7%, in line with volume growth for the year. On to EBITDA, which came in ahead of expectations for both BetMGM and Entain. Ex U.S. EBITDA of GBP 1.16 billion beat our guidance and was up 8% year-on-year despite digesting new taxes from Brazil following their new regulatory regime. Online EBITDA margin also beat guidance, and I'm delighted to say it was up 0.4 percentage points year-on-year despite a 1.4 percentage point drag from Brazil taxes.

So that means that our scaled growth and improving operational execution drove an underlying 1.8 percentage point margin improvement, which is a key highlight of the year. So with EBITDA beats from both Entain and BetMGM, total group EBITDA was GBP 1.24 billion, which was up a very strong 28% on the prior year. And that EBITDA growth led to equally impressive EPS growth, which more than doubled to 62p.

Moving on to adjusted cash flow, which is a key measure for us, and I'm delighted to report a strong year-on-year improvement from an outflow in 2024 to an inflow of GBP 151 million in 2025. GBP 151 million is comfortably ahead of expectations and was driven by both the Entain EBITDA beats and higher-than-expected cash from BetMGM. On to dividends, we've declared a final dividend of 9.8p per share, up 5% year-on-year, which is consistent with the half year and our progressive dividend policy.

Finally, leverage. We've added a look-through leverage metric, which better reflects the group's leverage position. What do we mean by look-through? On the debt side of the equation, we include the outstanding DPA payments and the balance sheet value of the CEE minority. And on the EBITDA side, we include our 50% share of BetMGM. And as the slide shows, look-through leverage at year-end was 3.6x, which is down significantly from 4.3x at the end of 2024 due to both EBITDA growth, but also paying down the DPA. On a reported basis, leverage has come in at 3.1x, flat year-on-year as expected, and available cash remains strong at over GBP 900 million.

Let's turn now to our online revenue performance ex U.S. over recent quarters. And this chart shows 2 lines: one for NGR growth, which includes volatility from sports margin and one for volume growth, which adjusts NGR to remove any impact from sports margin and is therefore a clear measure of underlying growth. Two particularly satisfying callouts. Firstly, we've now delivered 7 consecutive quarters of growth, all on an organic basis, evidencing the structural growth in our business model. And secondly, we maintained strong volume growth into the second half of the year despite lapping the voluntary code in the U.K. in the summer.

No doubt there'll be some recycling benefit to volumes in H2, given margin was below expectation in both Q3 and Q4, but volumes were consistently strong and grew 7% across the year. So that means we're growing at least in line with our markets, and we enter 2026 with continued momentum. Now for the eagle eyed amongst you, you'll note this chart is not quite the same as we've shown previously. The prior version normalized for Euro 2024 and it adjusted the current year margin to a normalized margin, meaning that volatility from the prior year margin still impacts the picture, but that version is included in the appendix.

Now to our usual market breakdown. And again, it's a strong picture with growth coming from across the portfolio. Our largest market, UK&I, continues to be a standout performer, delivering growth of 15% in online, well in excess of market growth as we continue to regain market share. We also saw sustained double-digit volume growth in the U.K. throughout every quarter of 2025. And U.K. Retail also saw market share gains as we were flat like-for-like across the year in a market which declined by mid-single digits. International online NGR grew 2%, slightly behind volume growth of 4% due to soft margins, especially in Brazil and also Australia.

Importantly, the second half saw an acceleration in volumes from 1% in H1 to 7% in H2, helped by lapping the regulatory changes in 2024 from Belgium and Netherlands. If we look now by market within international, Brazil had a tough sport margin in H2, falling 3 percentage points year-on-year. So consequently, NGR declined in H2 and brought growth for the year down to flat. However, on the plus side, volumes were up 13% over the year. Market share was maintained over H2, so we know other operators were hit by a poor margin, too. And we delivered a positive contribution to EBITDA despite the new regulation and high competition.

Australia next, where customer-friendly results at several tentpole events suppressed NGR, particularly in the second half of the year. Volume growth fared better with 3% growth in H2 as our refreshed management team have been a catalyst for improving performance and improving profitability. Italy online was up 5%, growing NGR consistently by mid-single digits in every quarter of the year. And Italy retail also fared well with 7% NGR growth over the year.

Other large markets in International continued to see double-digit growth, including New Zealand, Georgia and Spain on this page, but also Canada, Greece and parts of the Baltics and Nordics as well. CEE next and both Croatia and Poland delivered growth in both NGR and EBITDA and retained their market leadership positions in those markets. And finally, BetMGM also reported an outstanding performance with 34% growth in online revenue. The key takeaway from this slide should be the unrivaled broad-based growth that Entain enjoys across the diversified portfolio.

Looking forward, we're targeting growth across every one of these online markets in 2026, which positions us very well for '26 and beyond. Moving on now to EBITDA, which came in ahead of expectations for both Entain and BetMGM. This slide shows our year-on-year bridge with EBITDA excluding BetMGM on the left and then EBITDA including BetMGM on the right. Starting on the left, Entain's EBITDA grew 7% or up GBP 71 million on a reported basis, that 7% becomes 8% on a constant currency basis, and it would be 14% excluding the new Brazil taxes.

As usual, as the left-hand side chart shows, our online business is the main growth engine, adding GBP 136 million year-on-year. Where did that come from? Three things. Firstly, NGR growth, as we've looked at on the prior slides. Two, efficiency savings, particularly within cost of sales as our online gross profit margin increased a whole percentage point before Brazil tax. And thirdly, improved marketing returns, enabling us to hold spend broadly flat year-on-year in absolute terms, thereby improving margin.

Retail now, and we saw EBITDA up GBP 16 million year-on-year, helped by a favorable margin versus our expectations. Then in addition to Entain's GBP 71 million year-on-year increase from the left-hand side, the right-hand chart adds our share of BetMGM's significant EBITDA improvement of GBP 178 million year-on-year as it inflected to profitability, which gives an all-in total group EBITDA of GBP 1.244 billion, up almost GBP 250 million year-on-year. That's an impressive 25% growth on a reported basis and a touch higher at 28% in constant currency, and that's all organic growth. And as I mentioned earlier, that EBITDA growth is the primary driver of why EPS more than doubled last year.

Let's now take a closer look at cash flow and leverage. And as always, there's a detailed cash flow provided in the appendix. As a reminder, adjusted cash flow is effectively our distributable cash, i.e., cash flow pre-equity dividends, and we also exclude working capital noise and strip out M&A and debt movements. In 2025, we delivered adjusted cash flow of GBP 151 million, which is meaningfully ahead of expectations. You'll remember a year ago, I had guided adjusted cash flow to be broadly neutral. And then by Q3, we were ahead of plan, particularly thanks to BetMGM. And so guidance effectively moved from neutral to GBP 75 million, and then we beat that too.

So what drove the outperformance? Firstly, Entain's EBITDA beat guidance. And secondly, BetMGM returned more cash to parents than guided, $270 million in total for 2025, which far exceeded expectation. And finally, a net favorable movement across other cash items, including lower interest costs following our debt refinancing efforts last year. Net debt ended the year at GBP 3.6 billion, with the improvement in adjusted cash flow offset by an FX translation bad guy of over GBP 100 million and the working capital outflow that was as expected.

So overall, reported leverage of 3.1x is in line with where we expected it to be, but more insightfully, look-through leverage of 3.6x saw a meaningful improvement, down from 4.3x in the prior year, reflecting EBITDA growth, improved cash flow and a reduction in the remaining DPA balance. So our cash flow and look-through leverage improved significantly. Our available cash remains strong at over GBP 900 million, and we have a healthy debt maturity profile with our next significant maturity of around 20% of the debt not falling due until 2028.

A few quick comments on BetMGM now. It won't be new news, but it's still important given its significance to the group's priorities, particularly cash generation. BetMGM had a fantastic year and delivered ahead of its upgraded expectations with total revenues up 33% and EBITDA up over $460 million year-on-year as it moved into profitability. This inflection triggered the start of cash returns to parents with $270 million distributed in 2025, including excess cash from the 2024 year-end. The strong performance last year was driven by BetMGM's disciplined execution, underpinned by a leading iGaming offering and BetMGM remains on track to deliver approximately $500 million of adjusted EBITDA in 2027.

Since we created BetMGM around 8 years ago, total net investment between parents now sits at almost exactly $1 billion. So with approximately $500 million of EBITDA next year, it's easy to see that the ROI on that investment has been excellent. Now last slide from me, the outlook for 2026. And remember, the appendix includes a detailed guidance slide for modeling purposes as well as a slide on the BetMGM parent fee mechanics.

To be consistent with prior years, when I refer to Entain EBITDA, this is before parent fee income, which does start in 2026. So for 2026, we expect online NGR growth of 5% to 7% on a constant currency basis with broad-based growth across the portfolio. Online EBITDA margin is expected to drop to 23% to 24% in 2026 following the increase in U.K. gaming taxes, including our expectation of mitigating approximately 25% of that cost in 2026. Stella will talk about it more shortly, but our upgraded mitigation expectation today is to improve cost mitigation to over 50% of the U.K. tax impact from 2027 onwards. The efficiency plans, which Stella will take you through, will support an upward trajectory for both EBITDA and EBITDA margin from 2027.

So with 5% to 7% online NGR growth and 23% to 24% online EBITDA margin, we're comfortable with current market expectations for 2026 Entain EBITDA, which represents a small decline year-on-year. However, when combined with growth in the U.S., EBITDA, including the U.S., will be broadly stable year-on-year. And broadly stable, of course, represents significant underlying growth before absorbing the U.K. gambling tax rises.

Another consequence of the U.K. tax rise is that we lose a year on a deleveraging profile because now look-through leverage will be broadly stable in 2026 before resuming deleveraging thereafter. Two more bits of guidance to touch on. Firstly, marketing phasing because 2026 is a World Cup year, we expect approximately 55% of marketing spend to be in the first half, consistent with previous tournament years. And then secondly, now that BetMGM is sustainably profitable, our ETR guidance going forward is on an including U.S. basis. And the new ETR, so effective tax rate, the new number is 30%. This is higher than 2025 due to the U.K. tax increase as we'll now have less profits in the U.K., which are taxed at a below average ETR. And so that adverse change in geographical mix pushes up the group's blended ETR.

In addition, there's a slide in the appendix, which takes you through expected tax accounting treatment of our share of the $1 billion of available brought forward losses in BetMGM. In short, a deferred tax asset is expected to be recognized in 2026, which will give a boost to EPS in 2026, but then available losses are no longer benefiting EPS in the following 2 to 3 years. Cash tax is not impacted.

So in summary from my section, we expect 2026 total group EBITDA, including BetMGM, to be stable year-on-year despite digesting the significant increase in U.K. taxes. How do we achieve that? We operate in growth markets where we have the most diverse set of podium positions globally. So we have structural sustained growth built into our model. We also have a gaming-led business in the U.S. without material exposure to prediction markets. So those combined give us confidence that underlying growth will continue into 2026 and beyond.

And on a final note, I'm proud to say that our EBITDA of just under GBP 1.25 billion is now twice the size of the first EBITDA number that I reported 7 years ago and is many multiples bigger than my early days at Gala Coral. It's been quite a journey. It's been hugely eventful. It's been highly rewarding, and I'm delighted to be leaving the business with great momentum across an outstanding global footprint, yet still with so many growth opportunities ahead. And it's also clear that in Mike, we have -- I'll be handing over the CFO reins to a hugely capable replacement. With that, I'll hand back to Stella.

Thank you, Rob. It's difficult to beat that because he's got all the numbers, and I've got all the fluffy stuff. So -- and this is the audience for fluffy stuff. You like numbers. So I'll do my best, okay? So look, Entain in 2025 did deliver strategically and financially. So that is a really good starting point. But now our priorities have to evolve because we have to reflect the next stage in our journey, and it's an improvement journey. And we have to build on some of those achievements, but we also have to be bolder in our mindsets. We have to address the significant challenges from the dramatic tax increases in the U.K.

So what are we doing about it? Well, we're intensifying our focus on cash generation and disciplined capital allocation. And importantly, today, we reiterated our confidence in delivering at least GBP 500 million in annual adjusted cash flow from 2028. Cash generation being a key component of long-term value creation. And as you can see from this slide -- yes, good, you see from this slide, it is now an explicit strategic priority, called out in our bonusing for our people, called out in our long-term incentive plans, it's a very important part of where we're trying to go.

But before discussing our achievements and progress during '25 in detail, these next 2 slides are an important reminder of Entain's foundations. We are a global leader in an industry that is in long-term growth, and we are well positioned. This slide is a powerful visual representation of the breadth and the quality of our business. In Entain's 16 largest online markets, we have a podium position in 13 of them. And we're in the top 4 in all 16. And excitingly, many of these positions have the opportunity for significant growth.

So for example, if you take New Zealand, where we are the partner with the New Zealand government for sports betting. We now have a great opportunity in iGaming when it becomes regulated at the end of '26 beginning of '27. And in Spain, we have a great revitalization of our beautiful bwin brand. And we're really hopeful that by the end of 2026, it will also have a podium position. And this next slide is also going to be familiar. I'm a bit boring. I keep showing the same slides, but that's consistency for you. Consistency is good.

The left-hand bar chart shows that over 98% of our NGR is locally licensed. And 97% of our online revenue is from markets estimated to grow at least by mid-single-digit CAGR. That is a truly impressive statistic, 97% of revenue coming from markets in good, sustained long-term growth. And the pie charts on the right showcase the diversity of the portfolio by both geography and by product. And it's the combination of all of these things that gives our business the resilience that it needs, underpinning our ability to deliver long-term shareholder value.

And now I'm going to share a few of the highlights from across our portfolio in 2025. In the U.K., one of our many initiatives was refining our bonusing, using real-time player data to increase segmentation, reduce bonusing as a percentage of GGR while increasing player value. This bonus optimization on our central platform is also driving benefits in markets like Brazil, Spain, Portugal and Canada. Our U.K. retail team continued to raise the bar with a state-wide rollout of our group bet stations. And this has driven an increase in our market share as well as an increase in our Bet Builder staking.

In Australia, our new leadership team adopted a disciplined and returns-led approach, retiring some of the inefficient legacy marketing initiatives whilst also leaning into AI to produce high-quality creative assets more quickly and at a fraction of the cost. Across the group, we've also reduced nonworking marketing spend, centralized performance marketing and improved our allocation of investment. Our strong performance in Spain reflects that reawakening of the bwin brand and also markets like Canada, Brazil, Georgia, all benefiting from refining how our brands engage with our customers.

And also some things on product and tech. In Poland, STS migrated onto our Croatia Sportsbook, rebuilt its mobile app and now has a slicker, faster user experience. And in Brazil, we launched Sporting bot for the Club World Cup, an AI personalized assistance to help our customers enjoy the product more. And it's proved to be such a success that it's being rolled out across more markets and more sports this year. So that's just a flavor of the strategy in action. We're seeing improvements to the portfolio because we have shared learnings that generate a powerful multiplier effect, supporting our momentum and our operational efficiency.

Moving on now to customer acquisition and retention. And again, this slide will be familiar. Net revenue retention is holding strong. It's above the 85% benchmark, and it has been north of 90% for the entirety of 2025. And this reflects the work that has been done to close product gaps and improve our customer journeys. You'll see there's a slight drop-off in Q4, but that is due to customer-friendly sports results, and it's nothing structural. Customer acquisition also remains comfortably above the 15% level. So if you get the combination of strong net revenue retention and healthy acquisition, that underpins our sustainable growth. And these metrics remain strong as we enter into 2026.

As I mentioned with our strategic priorities, Entain is now in the next phase of its improvement journey to accelerate forward. Project Romer delivered over GBP 100 million in savings annually. But we can and we have to do more by continuing to improve on our cost of sales, by optimizing marketing rates as a percentage of NGR and a continued focus on operating efficiencies. We already have multiple work streams identified to deliver against these 3 key levers. And we're also excited by the opportunities that our continued AI enablement program will have for improving the customer experience, the colleague experience and importantly, for increasing our bandwidth, whether that's resolving legacy issues with old -- can't say that, old code. You know what I mean. I hope you know what I mean.

Speeding up development cycles to improve the user experience, improving our customer care handling, automating low-quality contracts and legal work or dramatically cutting the cost of asset generation in our marketing areas. So delivery of these type of group-wide initiatives support our expectations to now offset over 50% of the U.K. tax increases from 2027, up from our previous estimate of 25%. I just want to do a slight call out on that. When the tax rates went up, we said immediately, we would mitigate 25%. That was the right thing to say because we haven't done the work at that stage. You need to take the time to add up the numbers and go through the figures to have the confidence.

So we didn't come out of the block shouting it's going to be 50% or 60% because that would have been quite frankly, a made-up number. Now we've done the work, and we've got increasing confidence in our ability to deliver against that. And that is the right way to do these things, engage into the business, build the confidence and start to solidify those initiatives. So I just wanted to give that flavor. We're not being dramatic and changing our minds. We're just building on what we started to do immediately after the tax increases, really important points.

So let's bring this all together. Despite the jump in those taxes in the U.K., we now remain comfortable with the market expectations for 2026. And when you combine BetMGM and Entain, that means we are delivering a stable set of numbers in '26 versus '25. From '27 onwards, organic growth and those optimization initiatives means that we're going to grow both EBITDA and cash flow and both on a year-on-year basis and importantly, versus 2025. And by 2028, we've got the building blocks in place to achieve at least GBP 500 million in annual adjusted cash flow. And therefore, that will support our journey to getting our leverage back to our target range of 2 to 3x.

So let me briefly wrap up before we go into Q&A. 2025 was definitely a strong year. We delivered growth across the portfolio, and that is a highly attractive portfolio that is well diversified. And our relative scale means that we will be winners in the U.K. because we will gain meaningful share from the regulated market. So execution is definitely improving. There's definitely a lot more to do. There always is. That's how you keep being competitive. And we have a clear pathway ahead. So we are confident in it. We are getting more disciplined, and we are accelerating forward. And on that note, I would like to open the floor to your questions, and I will return back over here.

[Operator Instructions].

It's Monique Pollard here from Citi. So 2 questions from me. Firstly, on the UK&I, obviously, you've delivered a pretty amazing performance today. You're now materially outperforming, let's say, your main competitor and largest competitor in the market, both on iGaming and sports and even including the comp, so on a 2-year stack, outperforming on both those metrics and taking material market share. Just wanted to get a sense from you of whether you think that can continue as we go into 2026, given some of the initiatives that you've taken on.

Second question I had was when we think about the Q4 win margin and that was down 1.4 percentage points in the fourth quarter online sports margin and year-on-year. But obviously, the online EBITDA has come in really good. So what are the sort of measures you've taken to protect that online EBITDA margin despite the unfavorable sports results in the quarter?

Okay. Great. Well, I think that's 2 questions. So I'll answer one, and Rob will answer the other one. Which one should I do? Okay. I'll take the U.K. and Ireland one because it's been great actually, the revitalization that we've seen in the U.K. And I actually have the U.K. team here. So they are in the audience, so I have to be nice to them. But they genuinely have done a great job. We've done lots of things, improved customer journeys, innovated, more innovation yet to come. We're putting a whole new Ladbrokes experience together before the start of the World Cup. We innovated with the first Bet Builder in horse racing.

So there's a lot of focus and there's a lot of energy. And it's energy is really important in these journeys, that belief and that willing to lean in and get it done. So we think there are lots of opportunities, both online where we definitely think we will win share once the new taxes come in place. But let's not forget, we have the best retail estate in the U.K. It's 2,400 shops, great shop colleagues. You would be amazed about their motivation. When we do our global employment engagement survey, they score amazingly. And you think about -- they're not high paid people, but their motivation and their customer care is just outstanding. And those things make a difference to how you perform and how you are relative winners in a marketplace that is going through change. So we're very optimistic. And I can say this because it's true, the U.K. has got off to a great start in 2026.

And then on to the online question. So yes, as you say, win margins below expectations. So in the end, NGR only plus 3%, but volumes plus 9%. How did we still get there on the EBITDA delivery? The main answer is within that gross profit margin point that I made earlier. We've seen great success, particularly this year sort of the continuation of Project Romer. Hugo sat in front of me, his team working on things like payment service providers where we've generated material savings. I referenced it earlier, if you take out Brazil tax, gross profit margin was up about a percentage point. And actually, there were some other tax rises at Netherlands and others that meant that it was even more on an underlying basis. So 1 point across the whole online revenue base, that's GBP 40 million, and actually, it's more like GBP 50 million, GBP 60 million. So that's the primary answer. It wasn't marketing. We spent exactly as we intended to in the second half of the year. We spent GBP 20 million more than we did in the first half, which is what we guided to last summer. So it's really the cost of sales margin or gross profit margin that delivered the catch-up against the NGR miss.

It's Ben Shelley from UBS. Two for me, if I may. One, could you talk about the growth outlook for the U.K. iGaming business, specifically amid the tax changes in that market? And then secondly, on New Zealand, can we expand a bit more on that opportunity? I appreciate it's very early, but what kind of upside do you think that can present to medium-term revenue guidance?

Okay. Well, we'll try and do them sort of -- I say a bit, you say a bit.

Okay.

So growth in iGaming, I mean, clearly, there is a market share opportunity here when the taxes go up. If you look at the shape of the business, the bottom 25% share of the iGaming market is through competitors, which are very subscale, 1% percentage share -- 1% share of the market. And they're just ill-equipped to ride the storm with this. So we feel very confident that we will gain share during that journey of the regulated market. Clearly, the black market is going to grow. At the moment, there aren't enough barriers in the way of the black market. And there are still 4 black market operators advertising on the front of football shirts on the Premier League.

I spent a letter expressing my concern about that. There is a consultation that's taking place with government. But quite frankly, that should be dealt with now because for all the reasons, the level of interest in the black market is going to go up. But we are in a very strong position. We're very strong in gaming. We have the scale to significantly increase share, which I think we will do. And we factored that partly into our numbers. Anything else on the U.K. before I go into New Zealand?

I mean we also extended the coin economies to Gala and Foxy. So it's not just about Ladbrokes and Coral driving growth in gaming in the U.K. So those brands are responding well, too.

Yes, that's great. And then on to New Zealand, just as a kind of a bit of background for everybody in case everybody isn't fully up to speed. We are the partner of government in New Zealand. We are the only licensed sports betting operator, and we have that long-term license agreement. Going forward, towards the end of '26, maybe the beginning of '27, there will be licensed operators for iGaming. They're going to be giving out 15 licenses. We are confident that we'll probably get 3 of those licenses. And I think the opportunity for us is significant because we'll be the only player who will be able to do cross-sell, yes. And so therefore, it's too early to say. We haven't explicitly factored it into our numbers, but we have put it forward as one of those opportunity areas that could be significant for us as we go forward.

So really exciting. And what's great about the team over in Australia and New Zealand under the leadership of Andrew Boris is they're really leaning into this that they're working very closely with our partners over there. We have 2 brands. Actually, we do under our licensing agreement. We have the TAB brand, but we also have betcha. Betcha is more focused on sports in general, whereas the TAB brand is more focused on horse racing. So we have lots of opportunities going forward.

And maybe put some numbers on it. Andrew probably won't appreciate this, but the opportunity is big. And we estimate that there's around a GBP 600 million marketplace. And currently, we're less than GBP 200 million. So if we have all of sports and a reasonable share of gaming, why can't that below GBP 200 million number go to, say, GBP 300 million. So an opportunity for significant growth over a number of years.

Estelle Weingrod from JPMorgan. I've got 2 questions as well. The first one on your online organic growth revenue guidance. Could you perhaps provide more granularity, more color on the different geographies, what you're baking in like between U.K. and IAC and international? And the second one on the Netherlands. I know it's a small market for you now. But just to understand a bit better how is your -- how was the exit rate and maybe what you're seeing right now in the market because you -- I think you're now lapping some of the affordability check comps that were implemented last year in February. Just to see if you're seeing an inflection in the market now.

You go and then I'll chip in.

Okay. We'll do it the other way around. So first question, the 5% to 7% guidance, where does it come from? I mean, unusually, I think it's going to be pretty uniform across our segments. So I mentioned it earlier, but international, for example, was below in 2025, but it had the drag from Netherlands and Belgium. I'll come back to Netherlands. So that's now washed through and it exited with 7% volume growth in the second half of the year. And U.K. incredible in '25 with 15% growth. Of course, it won't be 15% in 2026. And so I'd expect those segments to be much more uniform. Plus I mentioned earlier, if you look at the negatives, I'll come back to Netherlands in a moment. But Australia, we do expect Australia to return to growth in '26. And Brazil, when we annualize against those poor margins in the second half of the year, you'd expect growth in Brazil as well.

So I think you'll see a more uniform picture. And then the second part of the question, Netherlands. So as at Q3, we were minus 30% at the end of Q3. Then Q4, I think I'm right saying was minus 2%, so you can see a massive difference in performance. So the objective now is to get back into a little bit of growth. But even if we don't, the key thing is we've washed out that minus 30% that we were carrying for 4 quarters.

Yes. And just one thing to add on Netherlands. It's a kind of -- it's a terrible combination as a market because not only have the gambling taxes gone up significantly, but there's huge amounts of friction for players with very low thresholds in terms of deposit limits, et cetera. And I think I'm right that there's just another tweak up that's going to go on in duty rates, I think from January. Is that right? Yes. I think it's going from 34% to 37.5%, which is, again, a little bit more friction for players there.

Richard Stuber from Deutsche Bank. Can I ask just a couple of questions on the optimization plan. You talked about it's going to be effective from 2027. I was just wondering whether there are any opportunities to accelerate that? Why don't you sort of start those plans now? And the second question on that as well is, I guess, the initial guidance you gave in terms of U.K. tax mitigation was looking at the U.K. market. So how much of the optimization plan do you think is related to the U.K. and how much is sort of more of a global initiatives?

Thanks very much. I'll take the first, you take the second.

Yes.

So I hope I haven't miscommunicated. Optimization plans take place every single day. So it's an ongoing journey. And I think the way that I would describe it is prior to the U.K. taxes going up, we had areas that we were continually thinking about what are the next areas we can improve, whether that's payment service providers, whether it's automation, removing the processes, whether it's using AI to cut down our marketing production costs. So it's an ongoing journey. And if you think about the hit in 2026, we take the big hit from gaming, which is the big increase from 21% to 40% bang first of April. And so without mitigation, we'd obviously have a lower run rate. So we are mitigating and optimizing in 2026 to get to the numbers we have. But some of these other initiatives, they organically happen sequentially over time. And so it will continue to build as we go forward.

So it isn't a wait and see. I think everybody is very active in the company looking for those improvements in run rate that come from multiple activities. There isn't one big silver bullet. And I think if I were you, I'd be horrified if there was a silver bullet because why haven't we shot it. So therefore, it is literally multiple activities that go into how we improve the customer experience, how we improve the colleague experience, so we get more efficiency out of them, how we generally cut costs using the tools that are available to us and how we use AI, which is a huge game changer if it's done in the right way, to increase our bandwidth and our capability. A lot of people say AI is about this or that. AI is about enabling us to do more with the resources that we have to help protect us in the future.

And perhaps the only thing I'd add from a modeling perspective, put it through in '27. We're happy with where the market sits for '26 as it stands. And in terms of where is it coming from, where is that initial 25% that we announced last November, that was U.K. focused. The second 25% is a global view for all the reasons Stella has just said, primarily all online, but you can assume it's uniform or proportionate with the segments. There will be a little bit of corporate benefit as well, but the lion's share would be online across all the segments. I think that was the question.

Adrien de Saint Hilaire from Bank of America, please. A couple of questions. First of all, can you talk about the risk in your view of prediction market platforms coming into your markets and I say your markets beyond the U.S., obviously. And then, Rob, maybe an easy one as the last question. I can see your cash flow Slide 21. You have it down in '26, and I'm not too sure why because you've got stable EBITDA, declining CapEx, declining interest and so on and so forth. So what's the moving part?

Okay. I'll take the first question on prediction markets outside the U.S. I might even comment on it in the U.S. as well. So in the U.S., there is a unique set of circumstances. It doesn't get taxed like sports betting, and it is not approved by the state regulators. which means that there is a huge amount of prediction markets goes through nonregulated states, particularly California and Texas. I think the percentage going through those 2 states is it's -- I don't know, it's something like 80% of the total volume. There's also a huge amount of play of underage players. So in the U.S., you're going to be 21 to play. So 18- to 21-year olds are playing prediction markets, and they're playing prediction markets in non Luno regulated states.

It doesn't touch us that much in the U.S. because we are very much stronger in iGaming, and we never had a business to protect in those nonregulated states. So it is a bit of an anomaly in the U.S. And let me be clear. When people play the prediction markets in sports, it looks like a sports bet, it sounds like a sports bet, and it acts like a sports bet. So I don't think anybody should be any doubt it's sports betting. Now what happens to that legally in the U.S. and have a strong relationship with the regulators. We are in Nevada. Other sports players are not in Nevada. It is a key part of our offering. It's just what I wanted to say that.

If you look outside the U.S., equivalents to prediction markets, effectively like betting exchanges with Betfair in the U.K. have existed for decades, and it takes a small single-digit share of the market. There are not the structural reasons for prediction markets to be the hot topic, the flavor of the month in other markets. And indeed, in some countries, they've already come out and said, it's illegal. I think the Netherlands have said, polymarket you're out, otherwise, it's going to cost you $450,000 a week in fines.

France has come out against it. So it is a much smaller threat than I think it is -- than people perceive it to be in the U.S. But in the U.S., we're quite comfortable with our position, if that helps. Sorry for the long answer, but I thought it was going to come up at some time. Do you want to take the easy question?

I'll take the easy one. It's easy if I keep it simple. There is more complexity to it. But the simple part of it is Entain EBITDA does go backwards a little bit, as we referenced earlier. So consensus right now is GBP 1,126 million. We delivered GBP 1,160 million in 2025. So there's a little bit of a drop there. The second part of the answer is BetMGM. Even though BetMGM EBITDA does grow, remember, in 2025, we had an outsized cash distribution, including the 2024 surplus. So from a cash perspective, BetMGM is broadly neutral, whereas Entain EBITDA is down a little bit. That's the bulk of the answer. There are some other puts and takes. CapEx is down a bit, interest is down a bit. But that ETR point that I mentioned earlier, that's an offset against that. So the 2 primary drivers, Entain EBITDA down a little bit and BetMGM cash not up, just flat because of the 2024 credit that came through in '25.

I'm Ricardo Chinchilla from Deutsche Bank. I was hoping if you could give us a little bit more of a breakdown of the different buckets for the mitigation strategy for 2026 and 2027. Is it going to be mostly marketing reductions? Do you guys anticipate operational efficiencies from the use of AI? And if you could also comment on how you anticipate the promotional environment to be in the U.K., given that all of the large players have actually referenced the fact that 25% of the market is not going to be able to compete. So we anticipate that there is going to be competition to take that share back.

Okay. So let me just talk a little bit about mitigation. There are many initiatives. The way we try and sort of bundle them up in the business, we probably put them into probably 8 key buckets of opportunity. It ranges from optimizing our marketing expenditure. It ranges to looking at our cost structure to make sure we're more efficient. It ranges to looking at procurement, lots of opportunity in the very large amount of third-party spend we have. So third-party spend is a very interesting area because we get lots and lots of feeds externally. We have lots of licenses externally. We have lots of external legal fees.

I'm just adding them up, giving you a flavor of the different areas that we have. And then the devil's in the detail going down to specific line-by-line item activities. We also see that there is opportunities in terms of hopefully increasing our trading margin sequentially over time. But it takes -- it's a long-run thing, reducing fraud, taking the opportunity to get rid of bonus abusers. There's lots of things that build those buckets up to where they need to be. But I think the thing that I was trying to say is we have a detailed road map. We have sponsors behind that. We have targets that are being set. And we also have specific targets for how we increase the bandwidth from AI, which means that if you think about it, everybody who works in a corporate role or an in-market role or a finance role, they all have to become competent with AI so we can increase efficiency and make those people actually highly employable for the future.

But again, efficiencies flow out of doing those kind of things. So there are just many, many initiatives that build up to the total number, yes. Promotional costs, do you want to have a stab at that?

Yes, sure. I'll have a go. So I think you're right. I think the 2 obvious large competitors in the U.K. will lean in as well as ourselves. The fourth largest probably not so much. But then there is such a long tail, as we've touched on earlier. And when you look at one of these staggering numbers as a consequence of these U.K. gambling tax increases, when you look at the tax that we'll now pay in the U.K. as a percentage of profit before tax, it's over 80%. So in how many sectors and how many parts of the world you operate in an environment where your income tax rate is over 80%. That's an astonishing number, which essentially means how can subscale operators possibly want to do business and spend money here.

So I think with the exception of the 3 larger operators who I fully expect to want to, just like us, capitalize on it and seize the moment to take market share, I think you will see a lot less promos from mid- to smaller firms. The sort of the unknown dynamic is the black market. Of course, they'll be aggressive, why wouldn't they be? And quite what the impact of that is, we'll see from April onwards.

We're just coming up to time. I'm going to -- just one last question on Italy from Andrew Tam from Rothschild. It wasn't touched on a huge amount in the presentation. Obviously, it remains a key market. So a bit of color on the performance this year and then actually opportunities and actually how you're thinking about going forward.

Well, I'm happy to just talk about some of the opportunities, and I'll let Robbie okay, just talk about some of the performance at the moment. So we are a distant #3 in Italy, but we do have some exciting plans coming up in 2026. I don't want to share the confidential information. But if you watch this space in the next few weeks, I think we'll be announcing some nice initiatives that will give some more high-profile presence for our business in Italy. There is quite a detailed plan that has been developed to help optimize our position, recognizing that we are disadvantaged in terms of our footprint because we don't do retail gaming. And that is something that is not available to us because we don't have the license and the license isn't open for that. But there are some other things that we can definitely do, but I don't want to spoil the surprise. So, talk about the numbers.

Can I just clarify, these are organic plans in Italy.

Sorry, definitely organic plans, yes.

So in terms of performance of the business, the way we look at it, we grew online 5% last year, mid-single digits. Retail grew 7%. EBITDA grew 8%. It's a healthy business that's growing nicely year after year after year. That's very well run, tight ship. And so yes, there's a gap to the top 2 operators, but we have a great healthy business in the #3, particularly with Eurobet, which is a very strong brand.

Are we -- any more questions? Or are we having to wrap now? There was one there. Unless it's a hard one.

I'm Pravin from Barclays. Firstly, on the marketing expense, you sort of mostly answered that, but 45% in second half, given -- I appreciate its mitigation in U.K. seems a bit low given it's World Cup year. So do you think is there any scope in your guidance to sort of raise that if the market demands that, if competitors sort of market hard in second half? And then secondly, on regulation, is the worst behind us or you are still hearing anything in any of your markets there?

So on the marketing expense, we're investing well throughout the year. We're just shifting it forward because it's World Cup year. So World Cup, even though it's sort of June, July, it goes over 39 days, which is the longest World Cup there's ever been and there's more teams than there's ever been, means that the activity for acquisition, which is one of the things you really want to do in the World Cup comes quite a lot before then. So you're doing -- you do a buildup in terms of marketing.

So it does pull investment through into H1. But hopefully, that acquisition then rolls through into H2. But I'm a marketeer by training. If we have any spare money, I'll always put more money into marketing. But we have to deliver the numbers, too. I realize that. So that's obviously an area that we'd always look at going forward. But I think World Cup is a great opportunity. I think it's going to be a bit of a roller coaster ride because there's so many teams playing.

In the early days, the margins may be volatile. But hopefully, net-net, the whole thing is going to be an amazing thing, particularly for some of our markets. So given it's in the Americas, our business in Brazil will be really engaged in it. Our business in Canada -- by the way, Canadians, they love betting on soccer. Yes, absolutely love betting on soccer. And also, we've got quite a lot of our markets have teams already in the World Cup final. So we have a high overlap. So I think it will be good for us. And of course, and BetMGM, that small company in the U.S., BetMGM, yes.

Regulation. Look, I think it is -- it's our duty to flag the challenges of the increase in taxes and the increase in regulation that it does fuel the black market. I think we talked about the Netherlands earlier. I mean that is the perfectly worst mix. You have highly frictionful regulation and high taxes and their own government or the regulator says that over 50% of their market is black. That is a place that no sensible government would want to go into, in my view, because actually, it's just fueling profits in a different part of the world. And so I think it is the job of people like ourselves to flag the dangers of the black market to try and dissuade other places going like where the Netherlands has gone.

Yes. Can I just make one point of clarification on marketing. So we do expect marketing to increase in absolute terms. You can probably model broadly in line with revenue. So the marketing rate holding firm. It's just the weighting that's H1 related. Yes. And then on regulation, aside from the U.K., then everything else looks a lot more of a balanced picture, which is nice.

I know the Republic of Ireland, we have to do a wallet decoupling, which is a small adverse move there. But in Germany, it looks like touchwood, this might be the year that we get an increase in the slots cap, which, as you'll know, has driven the slots market to be 70%, 80% black. So that could be significant for us. We have New Zealand iGaming and other examples of clamping down on the black market as well. So aside from the U.K., and that's a big an aside, but aside from the U.K., it's a more balanced regulatory outlook, I would say.

I draw your attention to the 2 slides that started about the podium positions and our quality of our foundations of our portfolio, which gives us that resilience and the ballast to absorb any regulatory changes.

I think we're going to have to wrap it up now. But before we do, I just wanted to say a huge thanks to Rob for his huge dedication and passion for this business. He's been in it for 13 years, I think. And I do think if I chopped his arm off, it would actually say Entain.

Glad.

Should try. No, no. But genuinely, thank you so much, Rob. I really, really appreciate it. And I'm sure everybody in the room, along with all your Entain colleagues, is wishing you the very best in your new ventures when you eventually start them. But he's not going anywhere just yet. He's helping us out on some things until the end of June, but Mike takes over formally as the CFO tomorrow. But Rob is still with us, and we just say thank you so much.

Thank you.

I'm just going to say something. Rob soak that in. You never get clapped at one of these events ever. This will be the first and last time you get a round of applause.

Thank you very much, everyone. I do really appreciate it. As I said earlier, it's been quite a ride. And you can tell I've been here a long time and also I don't wear suits very often because I looked this morning, and I've got GVC business card. Yes. Thanks, everyone.

That's funny. Thank you very much. Thank you.

Good morning, all, and thank you for joining us for the Entain Group 2025 Q3 Trading Update. My name is Carly, and I will be coordinating the call today. [Operator Instructions].

I'll now hand over to our host, Stella David, CEO. Please go ahead.

Good morning, everyone, and welcome to today's Q3 results call. I'm delighted to be speaking to you all again and sharing another set of good Entain results. I'm joined by Rob Wood, our CFO and Deputy CEO; and our Investor Relations team. So sticking with our usual running order, I will start with the Q3 headlines and some highlights of our operational progress. Rob will then dig into the trading performance and outlook for the balance of this year. And then we are going to open it up to your questions. So let's kick off.

Entain's transformation continues at pace, and we continue to make strong progress with our strategic priorities. We are definitely getting stronger and fitter every day, and our improving operational execution means we can expand our bandwidth, enabling us to do more across more markets in our portfolio. Our technology underpins everything we do. And it's thanks to our hard-working product and tech teams who are supporting our commercial organizations with better capabilities. And these ongoing tech upgrades are the cornerstone to both Entain and BetMGM's improving performances.

All of this hard work is focused on delivering for our customers, providing players with improved products and enhanced experiences. Importantly, our efforts continue to deliver results. Entain is back to consistently delivering growth. Q3 is our fifth consecutive quarter of Online growth, having started on our transformation journey at the start of 2024. And importantly, we are rebuilding the resilience of our business to deliver sustainable growth. And I'm incredibly proud of both Entain's high-quality portfolio and the teams around the world who are highly committed to delivering results.

Looking at the Q3 headlines. Total Group NGR, so that's including our 50% share of BetMGM, grew 7% in constant currency. Entain Group NGR grew 5% with Online up 6%, while Retail grew 3%. Growth was seen across our portfolio, including the U.K., Italy, Croatia, New Zealand, Georgia, Spain, Canada, Austria and Greece. And as some of you may well already know, September had very customer-friendly sports results. And statistically, it just happens. So net of digesting that, Q3 was a really pleasing performance.

Similarly, BetMGM's impressive year-to-date is evidence of the success of the tremendous work that the BetMGM team have been delivering, and also Entain's product and tech teams in supporting BetMGM. As you heard from Adam and Gary yesterday, Q3 was another quarter that beat expectations, driven by the significantly strengthened sports product, our leading iGaming offering as well as BetMGM's successful player engagement approach.

As well as BetMGM updating its '25 guidance, its inflection to sustainable profitability means that we are now comfortably in a position to start returning cash to the parents. We have mentioned this expectation during our H1 results presentation in August, as it is a key pillar of cash flow outlook. And I'm delighted that BetMGM confirmed yesterday it's estimating at least $200 million coming back to the parents before the end of the year.

So in summary, Entain has a high-quality and diverse portfolio of podium positions in our attractive markets, and we're embedding a growth mindset in our business. Our transformation is progressing well, and we are delivering tangible results. We've reiterated our guidance for '25, and the strong momentum for both Entain and BetMGM supports our confidence in delivering consistent underlying growth and generating over GBP 0.5 billion of annual cash from 2028. There is clearly still a lot of hard work to do, but the prospects are positive, and we're excited about the opportunities ahead.

So on that note, I'm now going to hand over to Rob to take you through the trading in more detail. Over to you, Rob.

Thanks, Stella. Good morning, everyone. I'm delighted that Entain's Q3 results saw us deliver another quarter of consistent growth, including particularly strong results from BetMGM, as you heard yesterday. So let's dig in. And as always, all revenue growth numbers that I quote will be in constant currency. Group NGR, including our half of BetMGM, was up 7%. And within that, Online ex U.S. was up 6% and Retail was up 3%.

Let me start by unpacking the sports margin impact, which took a little shine off the quarter's performance after a run of very customer-friendly results in September. Firstly, and importantly, if we adjust out sports margin noise, then Online volumes growth was pleasing at 7% year-on-year in Q3. Yet NGR growth was 6% year-on-year. So you can see only a small margin impact on the year-on-year growth. However, the impacts versus expected margin was larger than that. And across the quarter, it's equated to approximately GBP 20 million of EBITDA. So sports results were unhelpful, but a little volatility is part of the course. And across the year-to-date margin is almost exactly in line with expectations.

Moving on, and our iGaming business was up strongly again in the quarter with 9% NGR growth year-on-year. Gaming therefore, helped to offset lower sports growth as sports ended with NGR growth of 1% year-on-year on wages growth of 5%. Looking at our markets now. And U.K. and Ireland continues to perform well with NGR up 8% in total with particularly strong growth again in Online at 15%. Whilst 15% growth in Online is slower than the 21% delivered in H1, as we start to lap the acceleration in the prior year, 15% is likely to again represent market share gains as we benefit from a level regulatory playing field and improved product and marketing. It's also worth noting that U.K. Retail returned to growth in Q3 after a slight decline in H1.

Moving to International, where Online NGR was up 1% in Q3 as volume growth of 5% was offset by the customer-friendly sports results in September. The impact of adverse results was most pronounced in Brazil, where Q3 NGR was down 11% year-on-year despite volumes growing by a pleasing 14%. We, of course, expect sports margin to normalize over time and the volume growth shows why we continue to be excited about the future in Brazil. In Australia, we saw stabilized volumes, but NGR was down 7%, again reflecting adverse sports results. Italy continues to perform in line with expectations and maintain share with Online up 5% year-on-year and Retail up 8%.

In addition, our high-quality, diverse portfolio saw many other sizable Online markets performing strongly. New Zealand, Georgia, Spain, Canada, Austria and Greece, all delivered strong double-digit growth in Q3. This not only showcased our strength across many geographies, but also helped us to digest declines in the Netherlands and Belgium following regulatory changes in 2024. We are now lapping those changes in both markets, and therefore, expect to see a more stabilized performance looking forward.

Entain CEE continues to perform well with NGR up 10%, Online was up 9% and Retail was up 11%. Both Poland and Croatia reported strong growth, and we continue to be leaders in those markets. Finally, BetMGM, and as you saw from yesterday's update, Q3 was another quarter of outperformance coming in ahead of expectations.

Moving on to outlook for the rest of the year, and I'm pleased to be reiterating our 2025 EBITDA guidance range of GBP 1,110 million to GBP 1,150 million. We've managed to absorb the sports margin impact of approximately GBP 20 million and remain comfortable with where consensus sits.

We also continue to expect 2025 Online NGR growth of approximately 7% on a constant currency basis or mid-single digits on a reported basis. BetMGM continues to see strong momentum, and yesterday upgraded both its NGR and EBITDA guidance for the year to NGR of at least $2.75 billion and EBITDA of approximately $200 million. Significantly, BetMGM also confirmed they anticipate returning cash of at least $200 million to Entain and MGM before year-end. Entain's share of this distribution can be added to our previous guidance of neutral adjusted cash flow for the year, which did not anticipate cash from BetMGM this year.

So in summary, Entain is firmly back to continuing to deliver consistent growth quarter after quarter, growing at least in line with our markets. We're making great progress with our strategic priorities, in particular, underpinned by significant tech improvements, and we have pre-fits working both for Entain and BetMGM. Our Q3 results also demonstrate the quality of our business, the sustainability of our earnings and the strength of our podium positions across our diverse portfolio. Coupled with Entain's earnings growth, BetMGM's milestone of starting to return cash to parents reinforces the clear pathway to our target of at least GBP 500 million of adjusted cash flow from 2028. We're excited for the final few months of 2025, and we're well placed to deliver on our many opportunities through 2026 and beyond.

With that, I'll hand the call to the operator to open for Q&A.

[Operator Instructions] Our first question comes from Ed Young from Morgan Stanley.

I've got 3, please. First of all, could you give some color on Netherlands and Belgium? You mentioned you've lapped the measures taken last year. I suppose that's the largest idiosyncratic change we'll see in Q4. So can you perhaps give a bit more color on what the underlying picture looks like there at the moment?

Second, on the JV cash, it's obviously very positive to start receiving that and it's more material than was expected. Does it lead you in any way to consider reviewing the GBP 500 million adjusted cash target for 2028?

And then finally, Stella, you made some recent commentary in the press around U.K. investment and the outlook for U.K. betting shops recently. I was wondering if you could give us an update on U.K. tax? And do you think the government understands the potential consequences of a material rise there?

Thanks, Ed. So taking the 3 questions. I'll obviously take the one on tax. But before I do that, maybe I'll ask Rob just to give you a little bit of an update on the first 2 questions, please.

Yes. So the first question was on Netherlands and Belgium. So they're 20-plus percent negative year-to-date and represent probably 6% of the Online mix, something like that. So as we look forward, that drag has now been eliminated. So that's roughly a percentage point, maybe slightly more of benefit to the growth rate. And that obviously helps to alleviate the deceleration that we'll see in the U.K. as we lap the acceleration in 2024. So far in Q3, as I say, both of those markets have now lapped the regulatory changes. They've both seen volume year-on-year growth. So that's very early days, but a good sign coming out of those businesses.

And I suppose just continuing that theme as we think forward to 2026, we don't have, as it stands today, touch wood, another Netherlands or Belgium. Aside from potential tax movements, which Stella will come on to, there's no market with material regulatory change on the horizon. So hopefully, we won't have another Belgium/Netherlands in 2026.

Second question was around cash. So yes, we're obviously delighted with the cash that's coming out of BetMGM. It does help underpin the GBP 500 million guidance. We will keep that under review. We'll probably comment more on it in March. But for now, you'd like to think there's more upside and more momentum to that target than when we first announced it back in March.

Stella, back to you.

Yes. Thank you. So yes, the question of U.K. tax, I'm glad the question has come up nice and early in this session. It's really important that we, as a business and the wider industry, have an active engagement with government on this issue, because tax rates going up, it is very well proven that every time you increase tax, the black market increases in size. Put extra regulation in place that limits opportunity for players, they tend to go to the black market as well.

And if you look at what's happened in the Netherlands, which is very clearly documented, they put the tax rates up to over 30%. Now it is well known that over 50% of that market has gone to the black market. And so therefore, it has actually backfired. So if the objective is to raise more taxes, then the best opportunity is to reduce the amount of black market that exists in the U.K. today. Over 500 sites exist. They look very professional, and they promise great rates, no prior protections, no guarantee you get paid out. And from a customer point of view, that they pose a real risk, and for government, they pose a real risk of accelerating the bleeding away of tax revenues to people who pay no tax at all.

So I'm very clear in my position on this one. We have to have a very close dialogue going ahead. We do. We are in close dialogue with the Treasury, and it's very important that the maths are used rather than emotion to decide what the right course of action is. But we are already a great contributor to the U.K. economy. We're a very highly taxed sector already. I think we pay an effective tax rate, and correct me if I'm wrong here, Rob, of around about 65%. So therefore, we already contribute at a very high level.

The industry employs 110,000 people, thousands of shops on the high street, including 2,400 of our own. And so it's about having the right balance here. And let's work together with government and regulator and service providers to take the black market sites off the market, where there are hundreds of millions of pounds of tax lost to people who pay no tax at all, and also restrict the advertising of black market sites in the U.K., which is deeply frustrating. So the answer to the question is it's an ongoing dialogue, and I believe that the maths should dictate where we end up here.

And maybe I'll just double down on that point that we're already a very high taxpayer. So that's one of the points we make when we're in with Treasury. I do like that stat that Stella referred to in the U.K., it's actually just over 2/3 is our effective tax rate. So that means that for every pound that we make in the U.K., on a pretax basis, 2/3 of that goes to the U.K. government. And that's why we're a top 20 taxpayer in the U.K., but we're obviously not one of the top 20 largest companies in the U.K.

So these are the kind of points that we're making when we engage with Treasury, as well as the fact that it doesn't matter what tax you put up, if you're going to put any tax up, we're one company and the mitigations available to us will be the same in any instance, and Stella has touched upon some of those. So I won't repeat them. But yes, these are the kind of messages that we're sharing with Treasury at the moment.

[Operator Instructions] Our next question comes from Estelle Weingrod from JPMorgan.

I've got 3 questions also, please. The first one is on Australia. It continues to be challenging. You mentioned customer-friendly sports results. But also, I think comps were tough to start with on the back of operator-friendly sports results in Q3 last year. So Q3 Australia, you've got minus 6%. Can you just provide more color on the impact coming from these 2 separate elements, the idea being to quantify this year's adverse sports results specifically?

Second question, looking at your product now in the U.K. for Online sports betting versus what it was same time last year, what are the key improvements that have been made? And where do you think you're positioned versus the best-in-class equivalent products at the moment? And the third question on prediction markets. I mean, questions were asked at the BetMGM call yesterday already. But today, my question is more on this platform's ambition to expand internationally. Does it pose a risk for Sportsbook like yourself in the U.K. or Australia or any other country? What's your take on this more generally?

Estelle, thank you for the questions. Let me just -- I seem to do things in reverse order here. Let me take the third one first, which is prediction markets. And I think Adam yesterday gave a very fulsome answer to the challenge of prediction markets in the U.S. We essentially believe that it is illegal, and with the regulators that we have to have a relationship with and be licensed through, we are not entering that market. And I think he gave a very clear answer to that question.

I think about the bigger question about prediction markets in other parts of the world, we've had things like Betfair in the U.K., which is an exchange. So it's not necessarily totally new, this concept. It's similar. So I think looking at Sportsbook and the range of things that we offer, that's what customers are really looking for. And in a regulated market, Sportsbook offering is highly superior, in my view, to what prediction markets are currently offering. But that's not to say we shouldn't be constantly innovating and looking for new things for customers to be engaged with. And if there is a new feature that makes sense for them, clearly, we would lean into that.

Then back to your second question, which was about where we are in the U.K. in terms of product. I mean there's been a lot of iterative improvements to the customer experience in the U.K. And it's a range of things from improved Bet Builder, to navigation of the app, to better customer journeys in general, because customer journeys are not just about the product, it's about the ease of depositing, withdrawing. It's about the friction in the process and making sure that we are aligned with what's expected in the market. So there's a lot of improvements.

A lot of them are small initiative that you don't tend to see, but they make a huge difference just in terms of navigation around the app, for example, making it more intuitive. So there's lots of things that have been done. But let me be very clear, because we like to be very honest, is that this is a journey. The journey is an ongoing one of iterative improvements rather than -- it's not a destination. It's a constant moving forward. So we're very pleased with how the U.K. is performing, obviously, but there's still significant opportunities ahead.

And then I'll give most of the Australia questions to Rob. But in terms of sports margins, that was an unbelievably negative for the operators, but joyous for the customers at Rugby Match in Q3 in Australia, which was very expensive, not just for us, but for the industry, which, as I said at the beginning of the presentation, sports margins, sometimes the customer wins big. And that's not a bad thing. It's just statistically an inevitability. But Australia, a bit more color, please?

Sure. So I think you've hit the most important point, which is results go for you sometimes and against sometimes. What's important is volumes. And in Australia, we were a shade positive in Q3. And that's really how we see the market going forward. Low single digits positive is our best guess of what we see from a volumes perspective in Australia in 2026. So from our perspective, it's stable, albeit when you look at NGR in the quarter, obviously, it looks adverse.

Perhaps what we'd also say we've got a new CEO in Australia. He's doing loads of great initiatives in the pipeline. So we're really excited about what he's achieving in his plans in Australia. And then neighboring New Zealand is continuing to go well. So we delivered over 20% growth in NGR in Q3 in Online. And we look forward to iGaming coming as well, which could be a nice filler for us in the latter part of 2026.

Our next question comes from Monique Pollard from Citi.

Three from me as well, if I can. The first one, Robert, was just coming back to your comment on the impact -- the GBP 20 million impact to the EBITDA in the quarter from the bad sports results. I guess I'm just trying to understand that, because you also called out in the statement and you made the comment earlier that there was a sort of 1 to 2 percentage point cut to the Online NGR growth from the sports results, and that sort of barely will get me to a revenue number of GBP 20 million let alone an EBITDA number of GBP 20 million. So I don't know if, as you say, about this sort of where you expected the margins to go versus them just being flat year-on-year. If you could just give some clarity on that would be helpful.

The second question was just on the 7% constant currency Online NGR growth target for 2025. I guess the way I'm thinking about it is we're at 7% constant currency year-to-date. We've got a 4Q comp for Online sports of plus 20%, given how bookmaker friendly the 4Q sports results were. So just wondering if that 7% for the full year is now a bit challenging. I understand the points you made on Netherlands and Belgium adding maybe a percentage point.

And then final question, I had was on CEE. So good growth from CEE. You mentioned that Croatia continues to perform ahead of expectations. Just wondering if you could give us, please, a quick update on Poland and how that is performing? Whether the market is still very competitive and whether you think you're back to maintaining market share there?

Thanks for those questions. I think the first 2 you've directed at Rob, so I'm going to let Rob answer those. I'll try and do the third one, because I like to do the third question first. That's kind of my thing. So Poland, we're trying to do a balance in Poland, which is it's been very competitive, lots of people have come in and have made little or no money, in fact, significant losses. And we like to do the balance between maintaining a healthy market share and delivering significant EBITDA. And I think we've actually got that balance right.

Now going forward, how competitive the market is going to be is going to be interesting, because the liberalization of casino has been pushed back quite considerably. And so that might change the market dynamics. But our approach to Poland is, look, long term, this is a great market. It's when casino comes in, which we're all confident in the long term, it will, we're in a great position to take advantage of that. But as I say, we are doing a great job of delivering EBITDA out of that market while maintaining a very strong market position. So that's our kind of approach to that specific market.

If I now hand over to Rob on the other 2 questions.

Thanks, Stella. And maybe I'll just add on Poland. We still grew 8% in Q3. So I'm pleased with the revenue growth despite the competitive pressure. We just migrated on to the SuperSport Sportsbook, which is an upgrade for the offering. So we've got that to look forward to. And as Stella mentioned, I looked it up after my comments in the interims. If you look at public filings in 2024, we had a market share of about 85% of net profit. So we're happy with how we're positioned in Poland for all of those reasons. And Croatia continues to grow double digits pretty much every quarter since we've owned it.

So to the other questions, GGR margin impact GBP 20 million. So yes, specifically, the 1% to 2% that's quoted is the impact on year-on-year growth. When you look versus expectation, it was more like a 3 percentage point impact, and that's where the GBP 20 million of EBITDA comes from. You might notice that the Q3 margin this year was our lowest for 2 years. And it's all about September. We were actually trending ahead coming into September, our Online NGR growth was very high single digits, but then it got pared back to 6% off the back of the adverse results in September. So hopefully, that explains that.

And then when it comes to the 7% constant currency guidance. So the year-to-date number is 7 and a bit, rounding down to 7%. So there's a little bit of headroom to still get there in Q4. But you're right to observe that there is year-on-year margin pressure in Q4 because Q4 last year was exceptionally strong. But based on a normalized set of results in Q4 of this year, we should still get home to 7% despite September taking the edge off of our -- and taking the headroom, if you like, out of our numbers.

[Operator Instructions] Our next question comes from Pravin Gondhale from Barclays.

Firstly, on the 7% Online volume growth in Q3 and then potentially improving structural margins. So underlying NGR growth in Q3, excluding sports results, it is near or touch higher than your top end of your medium-term revenue guide. How do you feel about sustaining this into 2026. .

And then you have kept FY EBITDA guidance unchanged despite the GBP 20 million EBITDA drag from sports. Can you help understand if there were any marketing or other cost adjustments this quarter which had helped you to absorb the sports results strike?

I think I'm going to hand those ones to Rob. Rob?

Yes. So firstly, Online NGR growth and views into 2026. I mentioned earlier that the good news is we don't have any known material adverse regulatory changes in 2026. So no repeats of Belgium/Netherlands. But of course, we won't see what we've seen from the U.K. in '25 repeated in 2026.

Our longer-term spread is 5% to 8% on a multiyear basis. The market is currently set at 6% for 2026 in terms of Online NGR growth, and we're comfortable at that level. EBITDA guidance unchanged. So firstly, no changes to marketing plans. Everything remains as we discussed at the interims in August. Why is the guidance unchanged despite the GBP 20 million? We've had a couple of small good guys. Firstly, FX is slightly more favorable than was anticipated when we set the guidance range. And also, Brazil tax, I'm sure you noticed that they withdrew the intended increase in Brazil tax. So that had a small benefit to 2025 as well.

The other aspect is we were trading the right side of expectations prior on a volume basis. And therefore, the net of those things is that we were able to fully absorb the GBP 20 million headwind from margin, in effect, that effectively torpedoed our planned upgrade today. So that's the way we think about it. We would have been able to lift guidance a little bit, but with that GBP 20 million headwind, we were not.

Our next question comes from Ben Shelley from UBS.

I have 2. Stella, I hear you on your U.K. tax comments. I just wanted to hear a bit more detail on potential mitigation measures. I think you've got a rule of thumb of around 50% in the Online business. Would that be accurate? And I'd love to hear a bit more about the Retail side as well just because that's a different business model to Online. And then my second question is, you talk about a stabilization of market share in Italy. Could you clarify whether that's quarter-on-quarter or year-on-year, and talk about what's driving the stabilization there?

Ben, thank you for the questions. So on U.K. tax, my primary goal right now is to make sure that we put our arguments forward, which is increasing taxation does not lead to increasing revenue for government. And I want to primarily focus on that because that is the right narrative to have, and there is compelling evidence out there.

So I come to the second part of the question, which is, say there is an increase which is unknown at this moment in time, how would we mitigate against that? And there are numbers of levers that we would pull, which include being less generous on bonusing, odds maybe not quite as good, reduction in marketing. These are all things that one does to mitigate against unwelcome tax increases. And obviously, we don't sit on our hands and not plan for that eventuality. We do plan for that eventuality. But it is a negative place to go. And I really want to focus in on the arguments about maintaining the right balance and keeping the black market under control, because I think as one of our competitors said in the newspaper the other day, increasing taxes, the jackpot goes to the black market. And we've got to be very clear about that communication.

In Retail, taxation, it is different kind of challenges that we face. And clearly, we run a range of shops, 2,400, and some of them are more profitable than others, obviously. And there's no doubt that increases in taxes that affect the Retail shops would make some of those shops marginal to unprofitable, and it would have a damaging effect on the high street. And again, it's a sliding scale. The further the taxes go up, the more the impact is. There's no scenario where there's no impact. And we would have to take actions accordingly, unfortunately, in that situation. And then on market share, just -- I don't know if you've got that number to hand, Rob, that would be very helpful on Italy.

Yes. And maybe can I just build a little bit on mitigations, because I think it's important to think through the various levers that we have. And sponsorships is a really important one to consider. And it doesn't matter which, as I said earlier, tax moves, sponsorships inevitably, because there's a longer payback, they're about brand awareness really. It's an obvious place where operators will go. And the only winners in that situation is the black market, because if they lose, they have less competitive disadvantage if the licensed operators are stopping sponsorships. And the losers, of course, is sports and not just football, but some of the smaller sports like Snooker, Darts, Rugby that are heavily reliant on sponsorship from us. So sponsorships is an important area as well as promotions, so bonusing, which again feeds the black market.

Just one other thought on Retail. It's worth -- these aren't exact numbers, but 80-20 rule, 80% of the EBITDA comes from 20% of the shops. So what that means is we have a long tail of marginal shops that we keep open because they support employment, they support the local high streets, but also they support online growth in terms of brand awareness and player acquisition. And so if online players are worth less money even, then that also feeds into it, not just the Retail tax moves, but also online tax moves. So I guess we've spoken a lot about this. There's a lot of mitigation available to us. So I think the rule of thumb is still applicable. But let's hope we don't need to implement too many of these measures.

And then on to Italy. So the answer is -- your question was, is market share stabilized quarter-on-quarter? Or is it year-on-year? The answer has now become both, which is a good place to be. Why is that happening? Part of it is a slower growth in some of our larger competitors, as they've sort of driven out a lot of the revenue synergy opportunities that they've had following consolidations.

And on our side, a couple of things I'd call out. One, Eurobet has actually done a reasonable job of maintaining share over this period, but bwin and Jackpot Digital, while small, was still contributing to that market share decline that we had seen. That's now been somewhat stemmed, not least helped by improving product.

And also on the Eurobet side, there's a lot of attention on product and tech at the moment. They've been quite innovative with things like their [ casi ] bets, which is sort of paying out early if bets almost are successful and that's proved popular. We have a new app coming as well. So a little bit of actions on our side to stimulate more growth, but equally slowing growth in competitors have contributed to market share stabilization.

[Operator Instructions] Our next question comes from Adrien de Saint Hilaire from Bank of America.

First of all, regarding 2026, would it be reasonable to expect a little bit of a boost on Online NGR growth coming from the World Cup? And then secondly, on U.K. tax again. In your opinion, will the potential tax increase only focus on Online? Or is there still a remote chance that it also hits Retail?

Okay. Thank you, Adrien, for those 2 questions. Let's talk about the World Cup, which is it's a great competition, obviously. And yes, there should be a boost to NGR from the World Cup naturally. I would be crazy not to say that. And so in terms of our journey, we'll definitely factor that in. And hopefully, that's again part of the opportunities in '26. I mean, we've got to also focus in on what the underlying growth is as well. So I mean, one-offs like the World Cup are great. But then the next year, you've got to have got the underlying growth there to offset that in '27. But yes, definitely an opportunity for us there.

In terms of U.K. tax, it's not just for Online, it's Online and Retail, which are both equally exposed to increases in taxes. And so again, I come back to my conversation piece that I had before. Our ongoing debate with the relevant departments and governments, including the Treasury, are critical to making sure that we get this right, and also working with the Betting and Gaming Council is really, really important.

Now obviously, Online is the more vulnerable part of this journey than Retail, because there are different factors at play in Retail, but I don't think it's remote. I think we've got to work on making sure that both the arguments are being put forward firmly and coherently. And alternatives, which is we closed down the black market together and the government gets hundreds of millions of more in taxation. That's the win-win in the scenario. But yes, all to play for.

Our next question comes from Richard Stuber from Deutsche Bank.

Just a couple of follow-ups from me. The first question is you spoke a lot about September results being very favorable for customers. Just wondering whether you've seen any recycling in the first few weeks of October? And the second question is on Brazil. Obviously, the sporting results heavily impacted NGR. Just wondering sort of how exposed is the Brazilian market to parlay mix. Is that a big factor of the volatility in margins? And could we expect that sort of to continue as we go forward?

Great. Thanks for those 2 questions. So yes, September, very happy customers. We're seeing October has gone up to a good start. We're very comfortable with where October is. Good margins, good volumes, as we hoped it would be. So yes, that's hopefully, some recycling that's taking place as people have enjoyed their experience with us. So no watchouts there. I think in Brazil, it's a multicomponent market. There are lots of things that go on in Brazil, and it's got to be very agile because there are things like parlay mixes, as you've said. But there's also ongoing ensuring that we're navigating the regulation well, but -- I'll hand over to Rob in a second, but we were particularly hit on margins in Brazil in Q3, way, way off our [ feel ], if you like. And some of that was just genuinely bad luck on sports results. They were very unfavorable towards us. But Rob, do you have anything else to add to that?

Yes. So Brazil, obviously, a high footfall mix and yes, high parlays. And interestingly, it wasn't just European football, so that the worst week of all in September was led by the -- it was the first week of the Champions League. So that had an impact in Brazil, but also local football was also adverse. So it compounded it. And in Brazil, we have a strong 2-up offer, which many of you guys will be familiar with, and that paid out on a few matches. So that was more customer-friendly as well. Overall, in Q3, Brazil's GGR margin was single digits, and you very rarely see that. So hopefully, just an exception, and we trend more towards that double-digit volume growth as we look forward.

Our next question comes from David Brohan from Goodbody.

Two questions from me. Firstly, on Brazil, you've talked a lot about kind of sporting results. Could you give any color on the iGaming performance in Brazil in Q3? And then secondly, just on AUSTRAC, any latest developments there? Or what kind of time line should we be thinking about for that?

Thanks, David. I'll take the second question first, and then I'll hand back to Rob on Brazil. So on AUSTRAC, I mean, it's a journey that we are on. I mean I think the first thing I'd say, we're very pleased with the program of compliance we have in place in Australia now. I think we're probably market-leading, which I think is a great point. In terms of the historical challenges that we have with AUSTRAC, clearly, there is a journey that we are on with them.

There is a process which is the legal process, which ends up potentially with us working this out in court, but there's also the other program that goes on in parallel, which is the mediation process, which we are obviously engaged in. And I think the answer to the question, this will take as long as it takes to get to the right point. There's no point in us trying to rush a process which has a cadence that we need to work within. So we're comfortable that we are engaging proactively leaning into it, and we have a very good compliance program in place now.

So I think it's one of those ones which is we've given the kind of parameters that these cases have ended up in previously when working with AUSTRAC. So I think we know what the guardrails are. And so we just keep on that journey. In terms of Brazil, iGaming, yes.

Yes, I'll take that. So iGaming is not particularly strong at the moment and all the growth is coming from sports. Same themes as we spoke about at the interims and I think in our Q1s as well. So content is a bit limited and game authentication has been slow. So we think this is a market-wide phenomenon, not just Entain. And even of those games that have been authenticated, sometimes the RTP levels are not where we would choose them to be. So the good news is we think there's a lot more growth to come out of gaming as we look forward. But so far in 2025, it's been slow.

And our final question today is from Andrew Tam from Rothschild & Co.

Just one quick one on U.K. tax. How do you think through the potential for second order impacts in terms of the potential hikes driving sector consolidation? Is there a market share gain opportunity for larger-scale operators like yourself relative to some of the smaller subscale operators who would likely see outsized impacts from hikes, notwithstanding the black market?

Okay. Great. Thanks for the question. And the answer is yes. There is always opportunity in a situation where taxes go up, that the smaller operators get squeezed. And that would be part of our mitigation program against tax increases. And these things play out because the brand awareness is lower, the level of marketing goes down. It just naturally goes in that direction. So it's a very good point to call out. However, it's on the negative side of the beds.

We've got to go back to let's work against the black market growing, which is a huge challenge. I mean -- and I do this with probably a very serious point of view, there are no player protections, whether it's about the amount of money people spend or whether they have limits or whether they have appropriate marketing and even whether they get paid out. So I do want to come back to the other side of the line if we can. But in the event of increases, definitely market share increases would be on the table. Hopefully, that answers that question.

Just to put a number on it for you. The answer is particularly pronounced in iGaming, where we estimate around 1/4 of the online U.K. iGaming market sits with Tier 3 and smaller. So that's a long tail that inevitably would be up for grabs in the event that there's a material move in the iGaming tax rate.

Was that the last question? Okay. So before we finish, I think I'd just sort of just like to wrap up and say thanks, everybody, for joining. I hope you get a sense of positivity and commitment we have to the future. We really believe that we are putting the foundations in place for continued growth through '25 on into '26 and beyond. And the opportunities are very significant going forward. So thank you all for listening. Very much appreciated.

Thanks all.

Okay. Good morning, everybody, and welcome to Entain's 2025 Half Year Results Presentation. I'm delighted to be here to give you a strong set of numbers. And this morning, I'm joined on the stage by Rob Wood, our CFO and Deputy CEO; and also Satty Bhens, who is our Chief Product and Technology Officer.

So if I go to the agenda, I'm going to start off by sharing with you some of the highlights of the strong progress that we have made in the first half of this year. Then Rob is going to dig into the financials, looking both at trading and the outlook. And it's going to be back to me to look at achievements against our strategic priorities and how far we have come on our journey of transformation.

And a key part of transformation is technology, which is why Satty is here today. And he's going to talk about where we are on our tech journey, what we've achieved so far and importantly, what our thinking and planning is for the future. And then finally, I will briefly wrap up before I'm going to open up to your questions.

So now to our headline results. And as I said at the beginning, I'm very pleased with our H1 performance. Year-on-year growth was a little ahead of expectations, which is encouraging as we are lapping the comps from last year when we had both the Euros and Copa America. The U.K. and BetMGM, in particular, exceeded expectations. And importantly, we also saw strong growth across many of our other markets: Brazil, Georgia, Spain, New Zealand, Canada, Croatia, all in double-digit growth.

Our strategic priorities are clear and our focus on operational execution is now delivering the results. Our online business is now growing at least in line with our markets. And our growth is efficient and profitable because we are seeing EBITDA margin growth, too.

Entain's transformation is well underway and it's gathering pace. The business is getting sharper and faster. We're becoming more agile, more disciplined and the returns are making sure that we have many improvements to our player journeys and our experiences. Our product and tech teams have made significant strides, not only is that vital today, but it's critically important as we pave our pathway forward, providing flexibility and optionality in the future. So good progress, but there is still lots more to do.

We have upgraded our guidance for financial year '25 for both online growth and online EBITDA margin. And at the same time, we're taking the positive opportunity of increasing our marketing investment in H2, which will set us up really well for 2026 and beyond. And this revenue and earnings growth reinforces our clear pathway to strong cash generation.

So on that note, let me now hand over to Rob.

Thanks, Stella, and good morning, everyone. It's a familiar format from me this morning. So let's jump straight in with our financial highlights for the first half.

As usual, all revenue growth numbers that I give are in constant currency unless stated otherwise. So let's start with revenue, and I'm really pleased with the growth we delivered in H1, which was ahead of expectations.

Total group revenue, so including 50% of BetMGM, was GBP 3.1 billion, up 10% year-on-year. And within that, online NGR ex U.S. was up 8%, and that 8% is more like 10% adjusting for football tournaments. So better than expected, in particular, thanks to another excellent half from the U.K. as well as revenue, EBITDA was particularly strong in H1, both including and excluding the U.S. Ex U.S. EBITDA was up 11% year-on-year despite our last major unregulated market, Brazil, going live with a new regime and new taxes from the beginning of the year.

And EBITDA, including the U.S., was up a very pleasing 32% on the prior year, which also drove very strong growth in our EPS, as you can see in the bottom left.

Moving on to adjusted cash flow, which is a metric that deserves increased prominence. Remembering that in March, we outlined our pathway to deliver over GBP 0.5 billion of adjusted cash flow per annum from 2028. This metric was marginally negative last year, and this year, we're ahead by GBP 80 million at the half.

Leverage now, and we're making good progress. In March, I spoke about ending this year in the mid-3s, including the DPA, and we're there now ahead of plan.

Finally, dividends, we have declared an interim dividend of 9.8p per share, which is a 5% rise in dividend per share, which is consistent with prior years and our progressive dividend policy.

Let's turn now to online revenue and a closer look at growth over recent quarters. Whilst I'm not normally a fan of normalizing results, we've added the dotted line here to illustrate clear and consistent underlying growth at approximately 9% to 10% over the last 4 quarters. That's particularly pleasing as that's both ahead of our expectations and it's ahead of our markets, which we estimate have grown by approximately 7% over the same period.

How have we grown ahead of the market? It's primarily due to the U.K. If I look at growth over the last 4 quarters, but stripping out the U.K., growth drops to just over 7%. So almost exactly in line with market. Therefore, now that we're lapping the U.K.'s acceleration from last year, 7% is a good representation of our current underlying growth rate.

Above all, the key message from this slide is that we're back growing consistently, and we're back growing at least in line with our markets.

Now to our usual market breakdown, which again shows an almost entire sea of green. Let's start with the positives. In the U.K., we're very pleased with our performance, and we're rapidly recovering market share. Growth continues to be driven by player values, reflecting our improved player journeys, improved products and improved marketing.

Italy now, and we're comfortable with our position in this market. Our market share has been stable since Q3 of last year, and we, therefore, expect H2 year-on-year growth to be more in line with market growth.

In Brazil, we're happy with our performance so far this year, adapting to a new regulatory environment always carries risk. So we're pleased that growth has continued into 2025. The market is yet to settle down and it's highly competitive, but we're on track to meet our expectations for the year.

New Zealand now, an online growth at plus 18% in H1 is great to see. Whilst the legislative net is arrived later than expected, it is now effective and should, therefore, catalyze even greater growth in H2.

Georgia keeps on going with another double-digit performance despite lapping the Georgian National team's excellent Euros performance last year, which drove strong volumes.

Spain. Spain was a star performer, up almost 40%, responding well to increased focus.

CEE next, where online was up 8% for H1, which is particularly pleasing considering the heavy product weighting towards football in the region, especially in Poland, and both countries national teams played in the Euros last year.

The U.S., as you know, performed exceptionally well in H1, growing at 37% in online. And this chart only shows our largest markets. We also delivered strong H1 performances across many other markets, too, with double-digit growth also coming from Canada, Greece, Austria and some of our Baltics and Nordics markets as well. The value of our diverse portfolio means that, in aggregate, we can deliver total online revenue growth despite some of our geographies having an off half, such as Australia, where the market continues to be soft, and it was impacted by less favorable horse racing results.

Netherlands and Belgium were also down due to regulatory tightening, which will annualize in Q4. And lastly, retail quickly down at the bottom of the slide, retail was flat across the half and broadly in line with our expectations.

Before I move on, let me just step back for a moment and make a couple of observations. Firstly, this chart is a good illustration of our structural growth story in action. As I said, not all markets need to be performing perfectly for us to grow. Our diversification is a strength, particularly alongside our podium positions, and this gives us confidence of continued growth for years to come.

Secondly, this chart shows that markets on our central Entain platform are performing well. The U.S., U.K., Brazil, Spain, they're all central platform markets, which is great evidence of the progress we have made, and you'll hear more on that from Satty later.

Moving on now to our year-on-year EBITDA bridge slide. And this time, we show both the ex U.S. business on the left-hand side, and we've added a view of EBITDA, including the U.S. on the right-hand side. Starting on the left, as I flagged in the highlights, ex U.S. EBITDA was up 11% in the half or up GBP 60 million. Normalizing for the GBP 28 million FX drag, 11% growth improved to 18% in constant currency. And that 18% growth in constant currency is despite absorbing new tax in Brazil, which is the next block along. Now we haven't broken out any BAU tax rate rises. This is just the introduction of the new tax in Brazil.

The next purple bar is the Entain growth engine. Online added GBP 113 million year-on-year of organic EBITDA growth. What's driving that GBP 113 million increase? Three things. Firstly, NGR growth as we've already seen; secondly, favorable seasonality in marketing spend as H1 last year had a higher mix of marketing to support the football tournaments; thirdly, we're ahead of expectations on Romer initiatives, particularly benefiting online cost of sales, and I'll come back to that later when discussing guidance.

So online is up GBP 113 million So online is up GBP 113 million year-on-year, and then retail and corporate are broadly flat. So despite FX and absorbing the new tax in Brazil, our EBITDA growth ex U.S. was ahead of our expectations and up GBP 60 million year-on-year.

Let's now include the U.S. in our EBITDA bridge, and in addition to the GBP 60 million uplift we've just discussed, we can add our share of BetMGM's year-on-year improvement, so that's a GBP 90 million year-on-year increase which is a swing from minus GBP 48 million last year to a positive GBP 42 million this year.

All in, therefore, total group EBITDA for H1 was up 32% year-on-year.

Now before we move to cash flow and debt, just a quick word on our efficiency program, Project Romer. We announced this multiyear simplification and efficiency program back in November 2023 and we're firmly on track to exceed our upgraded expectation of at least GBP 100 million in annual benefits. We've seen good results across all areas of spend, including most recently, exceeding expectation against online cost of sales, as I mentioned earlier.

As with any multiyear program, over time, Romer activity has merged with BAU activity. And the program has now been fully in-house and fully integrated into the business. Therefore, going forward, I won't give specific updates on it, aside from when I cover efficiencies as part of our margin guidance.

Let's now take a closer look at cash flow, which we have rightly shown a light on recently. As outlined in March, adjusted cash flow is bottom line cash flow pre-dividends adjusted for working capital noise and with M&A and debt movements stripped out. In March, I said we expected 2025 to be broadly 0 before then rising towards GBP 0.5 billion per annum from 2028 onwards. And as you can see, this metric was plus GBP 80 million for H1, so we're on track so far.

Leverage has also improved year-on-year from 3.7x, including the DPA this time 12 months ago to 3.4x now, which is roughly where we expect to be at year-end before then significantly deleveraging from 2026. So our cash flow is recovering. Leverage is improving. Liquidity is strong. We have a healthy debt maturity profile, particularly after recent term loan refinancing and after 7 years of injecting capital into building BetMGM, we now expect some level of cash to be returned to parents later this year.

Now on to updated guidance. And the good news is from this slide, all of our updates are favorable. Firstly, online NGR growth. Our March guidance was for mid-single-digit growth in constant currency, with H1 expected to be stronger than H2, purely due to prior year comps. So lapping the U.K. acceleration in H2 and a strong margin in Q4.

Now our half-on-half expectation remains the same, but having banked H1 ahead of expectation at plus 8% and with H2 starting well, we've nudged up full year guidance to approximately 7% in constant currency, which implies approximately 6% in the second half of the year. Given an expected 2 to 3 percentage point FX drag year-on-year, that's 7% in constant currency for the year equates to mid-single digits on a reported post-FX basis.

We've also upgraded online EBITDA margin from approximately 25% previously to now being in a range of 25% to 26%, which is principally driven by outperformance on Romer cost of sales initiatives. There are some other ups and downs like geographical mix benefiting -- offsetting a few minor tax increases. But what's particularly pleasing is that this margin upgrade has also been achieved whilst planning to increase marketing spend in H2. Effectively, we plan to reinvest some of the upside from H1 EBITDA into further marketing in H2 to maintain momentum into 2026 and beyond. And we do that while still delivering an upgrade versus March guidance.

Moving on and retail EBITDA guidance is unchanged, and we now expect 2025 EBITDA to be within a range of GBP 1,100 million to GBP 1,150 million. Now rather than covering it in Q&A, let me help you with what this EBITDA guidance implies for H2 EBITDA. At the midpoint, guidance implies that H2 EBITDA is down around GBP 40 million on H1 and down around GBP 20 million year-on-year. So what's happening there?

Firstly, H2 is down on H1, principally because online marketing is materially higher in H2 given the planned investment I mentioned earlier and seasonality. And secondly, why is H2 EBITDA down GBP 20 million year-on-year? Well, we still have the drags from FX in Brazil that we saw in the bridge earlier. And we have 2 marketing impacts to consider. One, we have the planned increase in H2 marketing that I mentioned a few moments ago. And two, we have the seasonality point. So football tournaments are now adverse year-on-year in H2 reversing the benefit that we saw in H1 that I mentioned earlier.

Touching briefly on BetMGM now. And as you heard from the team a couple of weeks ago, we enjoyed an excellent H1. Consequently, we've upgraded twice since March, and we now expect at least $150 million of EBITDA for the year.

So despite FX, Brazil tax and increased marketing, the combined EBITDA guidance of Entain and BetMGM is projecting strong double-digit growth for 2025.

To conclude, let me reinforce our medium-term cash guidance. As I said earlier, 2025 adjusted cash flow is on track to be broadly neutral. And then we have 3 clear drivers to launch us to over GBP 0.5 billion per annum in the medium term.

Very pleasingly, H1 has seen significant progress against the top 2 of those drivers. Entain, ex U.S., has grown ahead of expectation. And better MGM's inflection to profitability is now a certainty, which gives greater conviction in cash generation by BetMGM over the years ahead. So we've made strong progress in the half, and we have increased conviction in these cash flow drivers. And that's a positive place to be standing as we look ahead.

With that, I'll hand back to Stella.

Thank you, Rob. So our strategic priorities are clear and unchanged, consistency being the magic ingredient. However, while they are unchanged at the headline level, we now have increased bandwidth and ambition. That means expanding beyond the urgent priorities that we set ourselves in 2024. And it's very pleasing that the markets we've mentioned like Canada, like Spain, like New Zealand, are in strong double-digit growth, but more meaningfully, they are generating substantial real value to the business, adding substantial incremental profitability.

We're focused on the growth drivers. And those growth drivers are revenue growth and margin growth. And we're also dialing up the focus on cash, as Rob mentioned, delivering growth in the right way, being more disciplined in how we invest our capital and how we conduct our operations. And Rob has already outlined our pathway to annually generating over GBP 0.5 billion in cash flow. And that is a key component of adding long-term value creation. And it is going to be -- it is a focus of mine and it's going to continue to be a focus of mine.

I'm also delighted that all 3 of our must-win markets are performing strongly. So the U.K. Online and Brazil, both growing at 21%. BetMGM, growth of 34%. So let me run through some of the highlights of what's behind these pleasing numbers.

So first of all, the U.K. The market having returned to growth sooner than anticipated is continuing to beat expectations and sees us regaining significant market share. And we're seeing growth not only in volume but in player values. And on top of the huge task of improving customer journeys, we've also been focusing in on product and player experiences. The apps are significantly faster. We've enhanced our Bet Builder, In-Play, Cash Out and Bet Tracker, and players are loving our coins economy reward system alongside the benefits of having our exclusive games and content.

If I move to Brazil, and it has been a very busy year so far. We launched successfully on day one of the new regulatory regime. And to be honest, it's not always been plain sailing, but we have navigated the challenges, including reregistering and certifying all of our customers, and the performance is on track.

The reason Club World Cup was particularly strong with record levels of player activities and turnover. So we do believe that we're well positioned going forward and are excited about the opportunities in H2 and beyond.

And now if I move to BetMGM. Now we all know that the interims have already been covered by Adam. And I think if you look at the results of the interims, it is quite clear that we are now entering a new and exciting phase for BetMGM. But I am equally proud that a key part of BetMGM's performance is the product and is product improvements and the experience improvements that our players are finding. And Entain's tech team delivered this in combination and partnership with BetMGM. So that is a really good metric looking forward.

F '25, as Rob has mentioned, has been upgraded, and we are confident in BetMGM's pathway to a GBP 500 million EBITDA per year and beyond. But it's no longer just about these 3 must-win markets, it's about increasing our bandwidth and also driving meaningful growth from other parts of the portfolio.

So I now move on to marketing and brands. Amongst our iconic brands, we have some sleeping giants that we're just starting to reawaken. So for example, in Spain, we have seen tremendous success in rekindling the love for the bwin brand. Great emotional advertising combined with performance marketing with excellent payback periods has resulted in that fantastic growth in H1 of 39% of NGR. And now we're increasingly confident that we can return bwin to where it should be in Spain, which is a podium player. Similarly for sporting bet in Brazil, we made sure that the relaunch of the brand took place well before the start of the new regulated market to set ourselves up well.

And then if you look at the U.K. as we're just warming up for the football season. We're seeing on Ladbrokes, the launch last weekend of our new campaign Ladisfaction. And an increasing number of our geographies are now starting to use the benefits of 365 Scores. 70% of our investment in performance marketing is now managed by our 365 Scores team. And you can see from the chart that the benefits are really proving themselves out. We have an 11% improvement in payback since we made that change. And that change -- the benefit of 11% has been done while we've also increased the level of absolute spend, showing that we are getting the returns that we need in this area.

So now with growth coming from across our market portfolios, our KPIs of customer retention and acquisition are strong illustrations of the improving underlying momentum across the business. As a reminder, the combination of retention of over 85% and acquisition at over 15%, and my math gets that to over 100%, means that we're in sustainable revenue growth.

The chart in the middle shows that net revenue retention is holding up well above that 85% level. The small dip that you see in June is just because of the euro lapping. And this high level reflects the hard work to close the product gaps and to enhance our customer journeys. And also a higher retained base, we're starting to see -- we're seeing customer acquisition numbers sitting comfortably above the 15% level. So in combination, these 2 metrics are a great indicator of future growth, which is why we're happy to be investing behind these marketing activities.

We're also working hard at strengthening and improving our business. And I know that I've shared this slide with you before, so I am repeating myself, but it is important. It demonstrates that Entain is operating in strong and attractive markets with strong foundations. First of all, we are a global leader in the industry that is in long-term growth. Over 90% of our NGR is locally licensed and Brazil was our last major market to shift to regulation and new taxes. Over 85% of our NGR is from markets where we have podium positions. 98% of group revenue is from markets which are in growth. And 93% of our online revenue is from markets estimated to grow at, at least mid-single digits CAGR over the next 4 years. So these core pillars of strength underpin the sustainability and quality of our earnings growth and sets us up to deliver constant returns and long-term shareholder value for many years ahead. However, to maximize these opportunities, we need to keep delivering significant strides forward in product and technology. This includes mapping out a plan that maximizes the flexibility and optionality that having a central platform and regional platforms offers. And Satty is going to talk to that shortly.

We also need to keep improving our operational execution. This isn't rocket science. It's not about a silver bullet. It's about many, many iterative improvements to the way in which we work. And finally, as we continue to press ahead, my goal for this business is to become a true learning organization, have a true learning mindset. Why? Because it is one of the few areas of truly sustainable competitive advantage that there is. So we must be learning customers continue to listen to them and learn what are they telling us? What are the behaviors? What do they like? We must embrace learning in the way that we do our business, utilizing our talent to improve our problem solving and faster and more effective solutions and innovation.

And if you want to know what goes on in my head, you may not want to, but I'm going to tell you, my internal mantra is one where we have the following: We need real people talking to real people in real time solving real problems. And if we can invest in that learning mindset and the associated behaviors, then we will have a sustainable long-term winning culture.

So now over to Satty to talk about the excellent progress in product and tech. Satty?

Thank you, Stella. All right. So the last time we connected, we had a long list of things in motion. And I'm thrilled to say that we've not only delivered on all of them, but we've done plenty more. So let's talk about the improvements our customers are seeing.

Previously, we talked a lot about Brilliant Basics. We've made significant strides in the fundamentals and our core foundations are solid. Our app launch speeds in our key markets are all podium worthy. Thanks to a complete overhaul of both our web and native apps.

As you've heard from BetMGM, our U.S. app navigation is now up over 40% faster. However, we're not done yet. Our best app launch speeds are yet to come, just wait a little bit longer. Instant withdrawals are now live with deposits and payouts happening in seconds. Over 90% of the withdrawals now occur under 60 seconds, significantly improving the user experience and boosting recycling.

Log-ins are faster too. Our internal goal is to get 90% of our log-ins in under 2 seconds. We're almost there in the U.S. We have a bit more work to do in other markets. But later this year, we plan to launch [ passkeys ] that will push us even closer to our targets. App scale and stability are also key expectations of customers, and we're getting better. We're on average seeing over 2 billion spins per week on the central platform. That's nearly 2,000 per second.

Our sports book product has made significant strides, closing the gap to as narrow as it's ever been. Our customers are clearly enjoying the product. In Q2, for example, our pre-match Bet Builder has seen a year-on-year turnover increase of 80%. Together with Angstrom and BetMGM, we've just launched live single-game parlay in baseball and are set to introduce in-play SGP for NFL and NBA when the season starts.

Not only are we upgrading player experiences, we're also modernizing our training back office, bringing all the existing capabilities of our European football trading to a U.S. sports, further improving risk tools and automating price movements for our traders.

And speaking of European football, our In-Play football Bet Builder is rolling out this week for the upcoming season. We have improved our market depth and improved our bet tracking capabilities. So in 2026, we can now pivot from catching up to going beyond.

On the gaming side, we continue to have the best-in-class gaming offer and content library. So far this year, we've been releasing 150 games each month, 20% of which are early access or exclusives. Almost 12,000 unique games have been played in H1. That's 27% up on 2024.

In the U.K., we've been expanding our client economy with Gala coins, Ladbrokes, Coral coins and now Foxy dollars. We've had over 40 billion coins redeemed so far.

Looking ahead to the U.S., we will soon see new experiences like our reward hub, Plinko and even American football themed games. Beyond online sports and games, we continue to make omnichannel improvements. For example, at BetMGM, digital verification think about it as selfies during registration, go live in MGM casinos in Nevada very, very soon. So I'm not obviously going to list everything we've done. And for obvious reasons, I'm not going to call out everything that's coming out, but it should be clear. We've achieved a lot, but there's still a lot more to come.

Now let's move to the work we've been doing behind the scenes. One of my first priorities when I joined was reorganizing the product and tech teams. Our setup was too complex. Our structure was stifling our ability to execute.

Our top to bottom reorg now unlocks faster innovation and sharper improvements. More recently, we've added squads that are dedicated to a market and some of these squads will actually be based locally in markets, giving us the edge to compete locally with real differentiation.

It's great to see this team -- these dedicated teams working side-by-side with our commercial colleagues, embracing the learning culture that Stella mentioned earlier, taking winning ideas from one market to another. This mindset really does elevate the impact these cross-functional teams can have.

As mentioned, our front-end stack is now almost fully modernized, powered by a platform-first approach using APIs. And it's really driving velocity. For example, in July, we made over 1,000 code improvements that are already going live, and that's just for our front ends. You know you've done something well when Google wants to showcase your front-end architecture.

AI is getting embedded across all of our engineering teams. It's speeding up modernization and is powering new capabilities. It's really fascinating to see our teams working alongside AI agents, delivering automated system upgrades and product improvements. So we've got lots of exciting things coming down the pipeline. The real difference now is that we're operating at a much higher clock speed.

Okay. So now let's talk about the direction we're taking with the central platform. But first, let's just take a step back and acknowledge we have multiple platforms and they all have a role to play that give us a local edge where we have them. So we will continue to embrace those platforms and support them with central capabilities wherever we can.

As for the central platform, the capabilities are getting better as we had planned. But we don't want to just compete, we want to win and we want to lead. And to do that, from where we are today, we must get 4 things absolutely right. They are the pillars of the system that's going to be built to win globally and locally today and in the future.

First, localization at scale. As we've already said, our central platforms deliver the brilliant basics, the foundations that every market needs to win. Local squads bring that local edge. Together, we combine the power with local precision. But here is the magic, we do it all on a single code base.

Next up is our modular capabilities. We've built our platform around 4 independent pillars: gaming, sports betting, marketing and player accounts. Each one can evolve on its own without waiting for the others. And with clean APIs, our front ends can be detached entirely. This means B2B flexibility, white labeling and even cloning the platform for strategic expansion. This is the architecture that both unlocks velocity and creates future optionality.

Third is real-time intelligence. We're embedding telemetry into everything. In this industry, the winners are those that can personalize and optimize near real time. Every feature, every campaign, every decision is driven by real-time data and real insights.

And finally, compliance. It's not the most glamorous topic, but it's mission-critical and it's a strategic weapon if we treat it right. We're making compliance a first-class system, not something bolted on, not something coded from the scratch every time a regulation drops, instead, it's compliance by configuration, where changes take days or weeks, not months. And putting it all together is where it gets really exciting.

On the right of the page, you'll see our evolution. Today, every market on the central platform benefits from everything we built in real time. To complement our central capabilities, we now have scalable ways of working that can build local differentiation which every market can also use when needed.

The next horizon for modernization is our API-driven platform. This gives us optionality, the ability to decouple where it makes sense. It's a journey, and we're making some real strides. With every step, we're building a platform that's more agile, more scalable and more aligned with the needs of our markets. And that's exactly where I want us to be.

So to summarize, our products are getting better. Our customers are telling us that. We are well organized to execute locally. The results are showing that. Next, we are modernizing our platform to give us optionality for strategic choices.

Back to you, Stella.

Thank you, Satty. So let me briefly wrap up the formal part of this presentation. Entain is a great business with attractive portfolios in a long-term growth sector. We have clear and straightforward strategic priorities, and they are now delivering results. Our customer experience is improving, and we're generating better net revenue retention.

BetMGM is entering an exciting new phase and should soon start returning significant value to both parents. Our journey on tech and product is giving us more flexibility and optionality. NGR and EBITDA are firmly back to growth, and we have a clear pathway to strong annual cash generation.

I believe these are exciting times for Entain, and I'm excited to be working with the team to deliver the next phase. So thank you for listening to the formal part of the presentation. In a few moments, I'm going to open this up to questions and answers. But before I do, I want to actually answer one question upfront, and that is to answer a question, which I know is going to be asked. And that is about AUSTRAC. And I'm sure some of you will have already noticed that there is a provision of approximately GBP 50 million in our accounts.

That provision is purely accounting driven, and there is no certainty that the quantum reflects what might be a potential penalty. We are currently in early stage mediation, and there is no further update until those discussions have concluded.

So now I've answered that question. I'd like to open the floor to other questions from the audience.

[Operator Instructions]

It's Ben Shelley here from UBS. I've got 2 questions. One, 7% online growth is near the top end of your medium-term revenue guide. How do you feel about sustaining this into 2026 and can you walk us through the key puts and takes?

And then my other question is about the marketing reinvestment. Did you look at the business and think there is an incremental revenue opportunity here, i.e., a bit of upside? Or do you think it's more about sort of maintaining sort of the current revenue growth?

So thank you for the questions. Is it working? Okay. Why don't you talk about 7%, and I'll talk about marketing, yes.

So yes, 7%, that's -- we estimate that our markets will grow in a range of 5% to 8%, so let's use your 7% number over the medium term. We see opportunities to outperform market growth potentially in the U.K. as we're still recovering market share. And we'll see just how far that takes us. We think by the end of this year, we might be fully recovered on gaming, but sport will take longer. We think Spain is an opportunity to grow faster than the market. We have opportunities in New Zealand, which is particularly exciting, not quite market share gain, it's a slightly different dynamic, but powering us to outsize market growth. Perhaps more neutrally Italy, Australia, more in line. I don't know if anyone can hear the mic feels like it's gone off. Okay, keep going. And the only place where we're losing a little bit of market share at the moment is Poland, where it's very competitive other operators or sacrificing profits essentially, and our market share is under pressure at the moment. Otherwise, we're either in line or planning to grow ahead. So if that gives a feel for -- if the market is 5% to 8%, 7% is not a bad number for ourselves.

Thank you, Rob. And then you wanted to have a little chat about marketing, one of my favorite subjects. And learning about marketing investments in a business like this is very interesting because we have very strong data now that says that we get very good paybacks from our performance marketing, for example. And I think I showed some of that on the charts earlier. And getting paybacks, some of which are within a year for certain activities is really strong, months of paybacks.

And so I'm confident that increasing the investment will fuel growth. But I'm not going to get ahead of my boots because if we get ahead of our boots and we have to do a reset, you're not going to thank me for saying we're going to go for additional growth before we've started to establish it. So it's a little bit of feed and see what happens concept. But the performances of this year have proved that there are really good reasons for continuing that momentum. And we're in a different part of our journey. When we were talking about probably 2022, 2023, when the numbers weren't looking so compelling and there was pulling back on marketing, we're in a position now where we have a higher degree of confidence in investing in that future whilst still not compromising the delivery on the results.

Ed Young from Morgan Stanley. First question on tax. There's been prominent media speculation around tax. I wondered if you could share your thoughts on how you think about tax risk in the U.K.?

And the second is on your GBP 500 million cash generation target. If we do add back the DPA and add to BetMGM, you don't need, frankly, very much organic growth to get to that GBP 500 million number. So still, I wondered if you could think about or outline your thoughts on how you think about the priority for driving better underlying cash generation within the business as it stands versus the 3 levers you've outlined on that slide.

Thank you very much, Ed. First of all, on tax in the U.K. I think we shouldn't forget we're a great British company, who generates a huge amounts of tax for the government. We were a top 20 tax payer anyway. And I think we should be proud of the success that this company generates not only here in the U.K., but in many other markets. That's point one.

I think point 2 on the conversation about tax hikes, which have been muted. I think people should be very cautious about the law of unintended consequences. There is already a large black market in the U.K. and driving up tax rates has the potential of reducing the tax take because people go to the black market. It is very easy access. There are very few controls that are in place to stop that right now. And there are examples in other markets just take the Netherlands when tax rate went up significantly in January 2025 and they have already admitted the Chair of the regulator there that has had basically an own goal. It hasn't worked.

And so I think people should look at the maths and be very careful about where we go forward because we want to protect players. If players go to the black market, they have no protections. They may not even have a guarantee of getting their winnings out. So it's about being balanced and doing the right thing. And remember, we have 14,000 people in the U.K. We've got a very large presence on the high street, protecting the high street is also very important. But whatever happens we manage and we go forward. But I do think looking at the consequences, in the round is very, very key. I'm going to hand over to Rob because you may have some more comments on the tax side and also let him talk to the easiness of getting to $500 million of cash generation. Or no?

Thanks, Stella. I think you answered it really well. You shared all my views on tax. Maybe a couple of things that I would add. Our tax contribution of over GBP 0.5 billion to the U.K. government, it's growing -- it's growing organically. And that's a really important point. And I also think it's reassuring that despite everything that you read, the treasury do understand the concept of the black market. They do understand that tax take goes to 0, as customers migrate across. And obviously, consumer protection falls away. And what's also important is that they understand that we're one business in U.K. Online. So it doesn't matter which tax rate goes up, whether it's gaming or sports or both, either way, the mitigation, the consequences are the same. And therefore, the black market issue is exactly the same regardless. So I think it's well understood. The Netherlands example is well understood as well. And we'll continue to encourage government and the Gambling Commission to really focus on the black market. That's allow the regulated market to continue growing and then generate a tax boost by clamping down on the black market and that would be our advice on how to proceed.

And then in terms of cash generation. So I think it's pretty fairly even components to get from 0 in 2025, up to over GBP 0.5 billion in 2028. The good news is the BetMGM component. I think people feel a lot better about that now after a really strong first half of the year and inflecting into profitability. So we're comfortable on that side.

In terms of the ex U.S. business, I think I concur with your comment that it's fairly routine growth to help us get to GBP 500 million. Of course, we're targeting over GBP 500 million, but as always, you need to in our sector make room for some risks and opportunities. I think we have great opportunities in the space of iGaming legislation. I mentioned it earlier, but New Zealand has now passed a bill or at least a bill has been introduced, which is fantastic, aiming for a 2026 launch. Poland potentially pushed out now with the result of the presidential election going the other way, but the underlying opportunity is still there. And obviously, U.S. states. So potential for iGaming legislation, I think, is a real catalyst over and above those numbers. And then perhaps going the other way, there's always risks around taxes, but you have to have some provision or contingency against in your numbers.

Right. Well, I'm going to go to the lines because you had the mic.

I'll give it back.

Okay. A question from Adrian Saint Hilaire from BofA on FX and net debt. So could you please give us an indication as to how much FX headwind is in your 2025 EBITDA guidance? And then the second one, share your -- how you see the net debt for the year given all the various moving parts on cash flow?

Definitely questions for you, Rob. Okay.

Yes. Let me have a go at that. So FX, if you look at currency movements, you'll see that the first half of the year has an outsized drag. So we saw earlier that the first half of the year, the P&L was impacted by GBP 29 million, perhaps across the full year, more like GBP 40 million, something like that. So I mentioned earlier due to 3 points on revenue, but that doesn't drop straight through EBITDA margin level, you get a benefit because some costs also benefit from the FX movement, right? So let's call it, GBP 40 million across the full year, that order of magnitude.

In terms of net debt, broadly level with where we are today. I mentioned it during the prepared remarks, we expected 2025 to be neutral from an adjusted cash perspective. We got a little bit of a lead in H1. So that will go a little bit backwards over the second half of the year. There are then some lumpy items that's not in adjusted cash flow. So firstly, dividends. Remember that, that definition is pre-dividends.

Secondly, we have the payments to the New Zealand government associated with the legislative net. So nothing new, all in our guidance, you'll see it there in our guidance slide, but that comes in the second half of the year. So therefore, if anything, net debt slightly higher, but leverage should be broadly around the same level as where it is at the half year. And then we start to delever from 2026 onwards through EBITDA growth in the ex U.S. business plus improved cash coming from BetMGM. So cash generation plus EBITDA growth equals much more rapid deleveraging from '26 onwards.

Ivor Jones from Peel Hunt. Could you kindly follow on the discussion about the cash flow from BetMGM to Entain, what's the process? Does there need be a particular set of accounts, a particular board meeting? Could payments be monthly? Is that obviously not the case? And are you contemplating putting debt into BetMGM in order to accelerate the extraction of cash up to the group to pay down the debt? So what will we learn and when about the likely trajectory of that?

And Satty, you said in tech speak, that you're enabling the platform for white labels and clone for expansion. Could that be translated for the lowest common denominator? What's the strategic point of that? Because it sounded important, but I didn't understand it.

Well, I'm going to hand over in a minute to Satty and to Rob. I think one of the things I just want to say about BetMGM is that we're very aligned in the way that we operate between MGM and ourselves. So that's really useful in terms of working out how we distribute the wealth from the asset going forward, but I'll let Rob go through the numbers.

I think the key point on tech, we want better optionalities for the future. We don't want to be -- have our hands tied behind our back that we can't make a decision for the future that would be good for a particular part of the business. And so white label, we're probably not going to do, but it's just saying we could that was just an example of the flexibility that we want to put into our systems in the future as well as improving the player experiences, et cetera. But let me hand over to Rob and then on to Satty.

Thank you, Stella. So BetMGM getting receipts back into Entain's parents for the first time this year, which is really exciting for us. The short answer is nothing has actually been agreed yet. So over the course of the remainder of the year, we'll work it out with Gary Deutsche. I know that both -- when I speak to Jonathan Halkyard, he's the CFO for MGM Resorts. We're both aligned that leaving cash in the joint venture at year-end doesn't make sense. So there will be some cash distribution up to give a feel for it. And we came into the year with a good amount of cash on the balance sheet. We will probably want to leave a reasonable amount of cash on the balance sheet at year-end as well in order to allow for working capital cycles and so on. So therefore, have a look at cash generation in year, and that's probably as good a guide as anything. And you heard from Gary, a couple of weeks ago, where we are with CapEx. So if you take EBITDA, deduct CapEx, you're not going to be too far wrong divided by 2 compared to sterling in a way you go. So I think that's as good a direction as any.

Then you had a question on raising debt at the BetMGM level. There's nothing in plans at the moment. So definitely nothing this year, but it is an option for us in the future. So I'm sure we'll get together at some point, perhaps in 2026 to have that discussion, but nothing in the pipeline. Satty?

I'll try and be as tech free as I can in my response. But ultimately, I think Stella answered it well, which is we're trying to design our technology and our people supporting each of our tech components to be able to run independently. And so that could mean within Entain, that could mean outside of Entain. And so we're just making that a technical possibility. And so as and when there are options -- when the moment is right, we can choose to exercise that option. But for now, it's really about putting the underpinnings in place.

It's Monique Pollard here from Citi. I had a couple of questions, if I can. The first one, Rob, was just on the cash flow. So what I'm trying to understand is that the adjusted cash flow was GBP 80 million in the first half. You're saying broadly neutral for this full year. So should we think about, therefore, a cash outflow in the second half? And why would that be given, as you said, it excludes things like the payment to New Zealand and the [ divis ], et cetera? Just trying to understand sort of what the seasonality would be there that would lead to that?

And then secondly, just wondering if we could dig in a little bit more to what's going on in Poland. Because obviously, the CEE results, Poland up 2% in the first half versus Croatia, up 14%. Obviously, part of that is the fact that Poland is just sports and you're lapping the Euros, but Poland did grow slower than the CEE sports. And you mentioned that you're losing a bit of share in Poland. So if you could just outline to us a bit more what's going on in the competitive environment there and plans going forward, that would be great?

Okay. Thank you for that. Well, I'll give Poland a go, and then Rob will definitely give cash flow a go. So Poland is a long-term attractive market, but it has been highly competitive in recent times in advance of people anticipating the liberalization of casino. And so there has been a lot of very heavy bonusing, people paying for tax on winnings which has meant that, yes, it has been a challenging period, but we've got to get the balance right because if you just do a race to the bottom and do the cheapest deal that you possibly can to compete extremely aggressively in the short term, you end up not having a success in the long term. So it's about getting that balance and it has slowed down growth that we were enjoying in Poland.

What happens going forward now that liberalization of casino has gone back a while will be interesting to see. And again, we've got to get the balance right between maintaining our leading position and also making sure that we're ready for when liberalization of casino actually happens. So it's a bit like Rob said earlier, we can have ups and downs in the portfolio. It's a market that's very competitive right now, but then you balance that off with great growth coming through from other markets that are now getting substance and scale, and that's the benefit of having a global portfolio that we're talking about. So hopefully, that answers the question, but I'm going to hand over to Rob for cash.

And maybe if I could just add one little thing on Poland. Sometimes you have to decide between top line and EBITDA. And we're actually growing EBITDA year-on-year in Poland. And I saw fascinating chart that shows, if you look at net profit by operator in Poland, there's still only 2 operators making money. We're #1 by some distance. We have 70%, 80% of the EBITDA of the market and it's growing. The #2 is making money, but it's declining and everybody else's breakeven or loss making. So there's a degree of making sure that the profitability continues into the future as well.

So on to cash flow, really, the main answer is EBITDA. So as I mentioned when I was presenting, we do expect if you follow the guidance at the midpoint, that implies a GBP 40 million reduction in EBITDA compared to H1, and that's primarily marketing. So partly just seasonality phasing and then partly the decision to invest a little bit more in the second half of the year. There's nothing else that really jumps off the page, it's most likely EBITDA.

But the EBITDA change is only GBP 40 million, as you said. And you've got GBP 80 million of positive cash flow.

I'd like to hear our numbers.

He's very conservative, in a good way, in a good way.

It's Estelle Weingrod from JPMorgan. I just have one first question on the sports wagers in U.K.&I it was plus 9%, which is quite strong in the context of the Euros comps. Would you be able to give that number for the underlying and handle growth when adjusting for the leveraging of regulatory restrictions and the Euros. I'm not sure you have this number.

And a second question on International gaming, in particular, it was relatively weaker, both within online and retail, so for international gaming, just -- is it just the Netherlands and Belgium? Or is there any other markets which is dragging a little bit on this performance?

Thank you for the question. We're just trying to work out what our answer is in a good way.

I'll have a go. So U.K. sports. So I think the question is can we -- the volumes were good. U.K. sports wagering was good in Q2 as well despite the Euros, you're quite right. Can we unpick the regulatory impacts? Really hard to do. So internally, and I said it before, there's no doubt that the #1 driver of the acceleration in the U.K. online growth is the voluntary code, right, and simplifying play journeys, but that's also doing a disservice to Satty, he's looking at me. We introduced new Bet Builder, for example, so product is improving. The app speeds are improving.

If you look at our ranking on App Store rankings they're going up. So product is improving, also marketing is improving, and that's both brand marketing and performance marketing, as you heard from Stella, and performance marketing showing encouraging paybacks has enabled us to invest more as well, which, in turn, benefits the top line. So really hard to break out the regulatory impact, but know that the growth is coming from a number of different drivers.

In International Gaming, I think Q2 was similar to Q1. Yes, Netherlands and Belgium are the 2 material negatives. Otherwise, there's no particular noise. I think of our other markets, Croatia, Georgia in international, growing strongly double digits in gaming as well. So I don't think there's anything particular that's called out.

Okay. I'm just going to continue on Netherlands question, just a bit more detail on the performance in Netherlands and your expectation for the rest of the year, given you start lapping later in the year?

So it's a question about -- sorry, I didn't quite hear it properly, a question about performance in Netherlands more detail?

Yes.

Well, I think the Netherlands has been a very challenging market with a huge impact of regulation and taxation increases. In terms of our performance versus our expectation, actually, if anything, we're ahead of where we thought we would be. And we will start lapping some of the more negative parts of the impact that we've seen relatively soon. So I think it's going to normalize itself out quite quickly in the Netherlands. So I don't think there's an awful lot of new news to share on that one. Was there more to that question? No. Okay. Do you want to add anything to that or...

Yes. Just a couple of points partly because I thought of another answer to Estelle's question earlier. Just in Brazil for awareness, sports is faring better than gaming at the moment. We think that's market-wise, things like gaming certification is taking longer to come through. So gaming is lower than sports in Brazil. That's partly an answer to that question.

And the only other thing I'd add on Netherlands is whilst revenue is under pressure, exactly as Stella said, it's in line with expectations. It's down about 30% in the first half and not quite as bad as some of the other operators have reported we annualize from October. So we'll see how it steadies out thereafter. But importantly, because of marketing restrictions, EBITDA is actually up year-on-year in the half in the Netherlands. So it's important to get that point in as well.

It's [indiscernible] here from Bloomberg Intelligence. Two from me, please. So the first one, just on the U.K. gaming retail, any reason -- anything to call out there or any reason why that same trend being slightly down would or wouldn't continue in 2H?

And then the second one, on the marketing. I mean clearly, you've got different markets at different stages of the maturity curve, different regulations. Where might you be allocating or looking to allocate most of that marketing spend?

Well, I think I'll take the marketing one because I like taking marketing questions, and I'm going to give the U.K. retail to Rob because Rob used to running retail in the U.K. back in the day. So on marketing, the key thing is looking at where the best returns come from our marketing investment. And we're building a better muscle internally than we used to have. We have the benefit of our team, the 365 Scores team who are amazing at what they do. They look at it incredibly mathematically in terms of the return that we get for the investment. And so that helps us allocate funds across markets in an ever increasingly intelligent way. So that is point one. Looking at different markets in terms of their maturity curve, it's always a balance between getting the right level of investment to sustain a big market versus the returns you might get for growing a new market. So it is quite dynamic.

And I think the key point is we've got to be constantly learning about how best to deploy those marketing funds. And I don't think you ever come to an end point on that journey. Quality of creative barriers, the quality of the payback varies depending on where you're putting your performance marketing, the type of performance marketing, et cetera. I think we also need to look at our relativity to the competition in each market to make sure that we have an adequate share of voice. So I think it's a really big question, and it's one that we are looking at all the time to optimize what is one of our biggest lines of discretionary spend.

I think where we're different to where we were maybe 12, 18 months ago, we have a lot more data to support the investments that we're making. And that's in no small part down to the insights and analytics that come back from our 365 Scores team. But I mean take Spain as an example. Spain was in terrible decline for us for a long while. The bwin brand had been large, and it went down to a much lower level. And then in combination, we put in a new management team there. They started to unlock the opportunities of having a legacy brand that needed some more love and attention. And then you see the kind of growth that come there. Now 12 months ago, we won't be saying put a lot of marketing behind Spain. Now it feels exactly the right thing to do because we're getting the payback. So I think my long answer is, it's something that is a really important component that we need to be learning constantly about.

But back to the U.K. retail, Rob, do you want to have a go at that.

Thank you, Stella. So firstly, just to level set, we're happy with the performance of U.K. retail. If you look at like-for-like gaming numbers, minus 4 in Q1, minus 2 in Q2 and improving. Why is it negative at all? There is a little bit around AGCs that we flagged in the past, and I'm pleased to see that the Gambling Commission is now taking a much closer look at AGCs rightly so. But I think the most important point is we've first started seeing some sluggish numbers in U.K. retail gaming in Q3 of last year. That coincided exactly with the acceleration in online. And so we're an omnichannel business.

If you look at the aggregate gaming performance in H1 just gone, it was up 11 in the U.K. in H1, H2 was plus 5 last year. So in other words, we've accelerated our gaming numbers into the first half of the year in aggregate. So we're pleased with how the business is going. And if you look at EBITDA, retail is flat, so it's continuing to be stable and contribute to online growth, as I mentioned. And it's also a pleasurable business for us to run the management team do a fantastic job. We recently had an employee engagement surveys U.K. retail scores have never been better. Turnover has never been lower. So massive credit to Joe and the team for what they're achieving. So retail for us is a really valuable asset and it's stable and it's contributing to online growth as well.

Okay. Well, we're switching the mic over there, one for me. A quick one. Update on the Entain CEE put option.

Thank you for that question. So that was the put option that may or may not get used. So first of all, I think the CEE business is doing really, really well for us. It's a long-term asset that I think has generated a huge amount of value. So I think we need to look at it in the context of that and then the choices that may or may not be exercised in the future by ourselves or by the other owners of the Entain CEE business. But I'm going to hand over to Rob, just to give you the technical answer to the question.

I think our technical answer of no update is the right answer. There's no update. But just as Stella said, we're all very happy holders of that asset. Just in case the EMMA Capital and Mateusz and his family do want to exercise the put. We have made sure that we've got some bridge financing in place. So if we needed to debt finance that facility is now secured or we could find another buyer for the minority, all options available. But the answer is there's no progress, and we're all happy holders.

Jack Cummings of Berenberg. Just one for me, please. The U.K. online EBITDA margin in half 1 was pretty strong. And I think it's even comparing to 2022 is now up about 200 basis points. And so how should we think about the steady state margin for that U.K. business, absent obviously any changes to things like taxation? Is a high 20s achievable, is low 30s? Just can you give us any color there?

So I'm going to hand this 1 over to Rob because I haven't got [indiscernible] my hand.

Thank you. We spoke about it a little bit in March because the U.K. 2024 online margin was lower. And I think I said at the time that the best way to improve it is through NGR growth and just posted 21% in the half. So EBITDA margin is recovering strongly. I would just caution that we should wait to look at the full year numbers, partly because that evens out the marketing seasonality point and partly also you have things like -- some of our cost items like staff bonus, it can be lumpy. So let's wait and see how the full year EBITDA margin looks and then judge. But really the key point is top line is growing well and that inevitably leads to strong margin accretion.

And maybe I'll just add a little bit of color as well, which is we have 4 great brands in the U.K. online. We have Ladbrokes, we have Coral, we have Foxy, we have Gala. And the work that's being done by the U.K. commercial team and Satty's product and tech team is really starting to show benefits, which should help us continue to grow in the U.K., things like the reward systems, the coins or the Ladbrokes all those things in combination with better player experiences is part of the reason that we're very pro investing in the U.K. Obviously, tax increase is a challenge that may or may not come along. But we have got some latent very strong brands in the U.K. We talked about sleeping giants that we wanted to reinvigorate. We think there's a great opportunity to really connect with customers in a way that will continue that growth.

Just one final question from Pravin and then we'll, in the interest of time, wrap up.

I'm Pravin from Barclays. Firstly, on Brazil, the black market there continues to be sort of bigger. In longer term, how do you think how much of that black market will compare to the realized market? And how much of that current existing black market, you can success -- regulated players can successfully shift to the regulated market?

And then secondly, earlier, you mentioned that most of your key markets are now on centralized platform. Are there any other sort of opportunities or markets you're looking at, where you can move the legacy on the platform, the brands to decentralized market, helping you with the margins there as well?

Okay. Well, I think we can have a little bit of a team effort here on some of this. I'll answer a little bit, and then I'll pass it on to my colleagues. Brazil, the black market, I think, was the first part of your question. It's very volatile in Brazil at the moment because regulation has only just come in. How big the black market ends up being? I think, is still to be determined depending on how many taxes the government put in place and they've increased taxes going forward into the autumn. What the restrictions might be on marketing investments in the future? I'm just saying there's a lot of volatility, and that means that we have to be agile in our approach to the market to make sure we navigate the right line.

And it comes back to being a learning organization at the end of the day, constantly taking in the data and moving forward. So it could end up being a big number, but we don't know what restrictions maybe the government will put in place regarding closing down websites, et cetera. I'll let my colleagues comment on that in a little bit more detail.

In terms of the central platform, we haven't actually moved markets to the central platform. So the central platform, I think the key point that we were making and I think Satty and Rob were making is that we were in triage this time last year and earlier, when the markets that were on the central platform were showing significant decline. And I think the key point of comfort is that markets like the U.K., Spain, Canada, Austria, Greece, et cetera, are on the central platform and are now posting very healthy growth, which is an indication the central platform is a lot more healthy than it was before.

It's not to say that the regional platforms, which are efficient platforms, they're good cost base and are adding lots of local value, there's no objective to try and close those platforms down, they add versatility. They add choices. If we want to acquire or dispose of an asset, it gives us -- it makes it easier to do. But -- so I think the key point is the central platform is driving growth. I don't I forgot to mention one very important market where we're driving growth on the central platform, which is BetMGM. So the scale of those numbers means that we've got much more -- we're building much more optionality into the system. But I'm going to pass it on to Rob and Satty, for any more comments on either question.

Nothing really to add on black market with just a wait and see until we get some proper measurement. The only extra comment, I would say, on localized platforms, the only part that we don't own is still Bet City, and that's due to migrate in-house in 2026. Otherwise, all the other local platforms, they're wholly owned, they're localized, they're low cost, and they're powering a lot of #1 position, so they're working. We're #1 in the Baltics, we're #1 in Poland, #1 in Croatia, #1 in Georgia, #1 in New Zealand, they're all on local platforms that are appropriate and working in those markets. Satty, anything to add?

Now I think I've taught you both very well. I think nothing to add.

Right. I think on that basis, we're going to wrap it up for the day. Really appreciate the questions. I know that quite a lot of investor meetings are going to be taking place over the next couple of weeks. So very happy to follow up with you. If you've got any really difficult questions, please give them to IR. They're more than happy to take them. But apart from that, thank you so much for joining us. We really appreciate it. And we look forward to speaking to you again soon. Thank you very much.

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the BetMGM Second Quarter First Half Business Update Call. [Operator Instructions] I would now like to turn the call over to Adam Greenblatt, Chief Executive Officer of BetMGM. Adam, please go ahead.

Good morning, everyone. Thank you for joining today's call. It's a pleasure to be here with you as we review our performance in the second quarter and during the first half of 2025. As you will have seen from recent communications, including our guidance upgrade in June and our press release this morning, our business has truly inflected and is delivering strong revenue growth and material cash flow. While only Gary and I are the ones here with you today, I want to take a moment to recognize that this performance would not be possible without the dedication and hard work of all our talented BetMGM colleagues along with the support provided by both of our parent companies.

So to kick off, I'll hit the headlines of our performance through the first half as well as our increased confidence in the outlook for the rest of the year. We carried accelerating momentum from the first quarter into the second quarter, resulting in second quarter revenue of $692 million, up 36% from last year following the first quarter's year-over-year growth of 34%.

In total, the 2 quarters delivered net revenue for the first half of $1.349 billion, and that's up 35% year-on-year. EBITDA for the first half was $109 million, with the second quarter reporting a fantastic $86 million of EBITDA. The second quarter was clearly very strong. While our OSB margin across the first half overall was normal, margin was elevated in Q2 with a particularly strong June. During the first half, our strong revenue growth was coupled with more efficient marketing spend and the flow-through of incremental revenue versus last year jumped significantly up to 66%.

Our iGaming business grew 28% in the first half year-on-year, accelerating from 27% growth in the first quarter to 29% in Q2 despite no new state launches. This performance was driven by strong player acquisition and attractive payback economics and healthy engagement KPIs that were underpinned by improved player management, best-in-class exclusive content and differentiated engagement tools that drive activity and retention.

In online sports, the strategic narratives we articulated early this year being improved marketing efficiency and player management, brand positioning towards premium mass and steady product and platform improvements have come together to exceed our original expectations. These factors combined with the natural progression of our cohort-based business model drove 61% OSB NGR growth in the first half compared to the first half of 2024.

Given our first half performance, the underlying trends we are seeing and expectation of continued strong execution against our strategic plan, we're upgrading our 2025 full year guidance. We now expect at least $2.7 billion of net revenue, which represent at least 28% revenue growth year-on-year. Our upgraded EBITDA guidance is at least $150 million, a year-on-year improvement of nearly $400 million.

We anticipate achieving north of $500 million of contribution and reiterate that both online sports and iGaming will be contribution positive for the full year. The strong financial performance means we also expect to keep our $150 million line of credit undrawn. As for the subject of our $500 million target for annual EBITDA, we aren't yet going to pin the tail on the calendar, but we do have increased conviction that, that goal will be achieved in the coming years. As always, we remain disciplined and continue to consider any changes in the landscape around us, including changes of launch dates, incremental investment opportunities, tax risks, and the impact of adjacent businesses to our sector.

The next slides touch on our progress across iGaming, online sports and omnichannel, then I'll pass to Gary who will dive deeper into our financial performance, including the improvements in operating efficiency that are showcased in our second quarter results.

IGaming remains the contribution engine of our business. and we continue to invest behind our strong market position. At a headline in the second quarter, we achieved $449 million of net revenue, up 29% over last year. Consequently, the first half came in at $891 million of net revenue, and that's up 28% year-on-year as well as delivering over $260 million in contribution.

The underlying story here is consistent with our plan. We acquired and retained more plays in the first half to the tune of 38% growth in monthly actives who stayed and played with us for longer. In fact, our players engage with us, on average, for 34% more days each month versus last year as well as played more hands or spins during each visit.

Simply put, our strong NGR growth was delivered by a larger and broader pool of players whose economics and payback periods remain highly attractive. An example of our strategy's effectiveness is seen through this year's new player values, which are higher versus last year's. This contrasts with the typical dynamic of new players, generating lower average monthly revenue versus older cohorts as states begin to mature.

The growth in these metrics can be attributed to operational success in 4 key areas. We continue to offer an unparalleled library of content that only BetMGM can offer. Our portfolio of slots titles, utilizing IP from the Wizard of Oz franchise has broken record after record since launch, and there's more to come soon from our partnerships with the Price is Right and Family Feud franchises.

Internally, we also have access to 4 studios via Entain and MGM resorts and are excited about building specific games for both the U.S. and Canada. Second, A key element improving stickiness is our creativity and innovation around our player engagement tools. Active player days and overall retention have both increased. Third, we continue to invest to expand our live dealer business with first half GGR growing strongly year-on-year. And finally, better cross-sell.

By being better at targeting and showcasing casino promotions in our sports offering, in the first half our multiproduct states saw an increase of over 10 percentage points of online sports players who are also active in iGaming. We are the destination for all iGaming players and this progress and success reinforce that statement.

Similar to iGaming, we're incredibly pleased with our progress and performance in online sports. Following strong growth in the first quarter, we achieved $228 million of net revenue in the second quarter, and that's up 56% year-on-year. For the first half, we reported $422 million of net revenue, up 61%.

Our handle was up a huge 27% versus first half last year, and OSB also delivered positive contribution. This performance reflects our significant progress against our strategic plan, and I want to take a few moments to explain what's changed this year in OSB versus last year. It's an interesting question. How did we reduce OSB marketing, deliberately reduce our overall base of active players and also grow revenue by over 60% in the first half.

The answer has a number of components. In acquisition, we've become more efficient at acquiring the higher-value real money players that fall into the premium mass category we've discussed. And this is a function of our refinements in brand positioning as well as the targeting of our marketing spend and the mechanics and value of our acquisition offers.

In new player retention and management, our data and analytical tools have evolved to the point where we're able to identify the value of players in each new cohort very early in their lives and also rightsize the reinvestment amount and cadence so as to avoid investment in unprofitable players and overinvestment in profitable players where it is not required. This better targeting and player management have combined to significantly improve the payback periods and ROIs for the new player cohorts we've added. This improved capability and approach really started back last fall, and we've been refining it all the way through 2025 and the results, frankly, speak for themselves.

The new cohorts we've added in the first half of 2025 have had a much bigger impact on revenue growth than those from last year. Our player management work has also helped us improve the performance of our more tenured cohorts these past few quarters, we've become more effective at getting the right rewards to the right players, which has increased the value of a proportion of these long-standing players.

This rightsizing of reinvestment has driven real gains that are now just BetMGM standard operating practice. Essential to our big handle growth is that our product also made broad strides across app speed and performance, market availability and discovery and overall parlay capabilities too. These improvements are clearly evidenced in our engagement metrics. In the first half, our players engaged with us on average 14% more in terms of active player days and placed 24% more bets on average versus last year.

We see it in our product mix metrics, too.

Our parlay bet mix is up nearly 5 percentage points and our availability of markets for live betting during the recent NBA season increased significantly. Simply put, our app is quicker, more featured and more fun. But we're not resting on our laurels as we look to the rest of 2025. We will continue to deliver more, faster and better. For example, we're delivering feature improvements to our Quick Bet and Bet Slip experiences expanding in-play capabilities, providing player and game insights to inform wagering, streamlining the user experience and elevating our player rewards program. Our players are going to love it.

To conclude, I want to highlight a couple of key points about marketing going forward. Of course, the year-over-year decline in OSB marketing spend from our recalibration has helped EBITDA this year. But we're at about the right level for BetMGM for now. So you should not expect further reductions in marketing spend to be the driver of EBITDA growth. It's critical we continue to replenish and refresh our player base that will grow in the years ahead. What's tremendously exciting is that we are now successfully and consistently demonstrating that we are balancing to an optimal blend of branding, communications strategies, promotional design and player development, which is driving a more effective dollar-for-dollar return on marketing spend.

As I've said previously, our third pillar, unlocking our advantage in omnichannel is all about amplifying the superpower with MGM resorts, rooted in our deep Las Vegas ties and presence. I'm proud to say we've become even stronger across all touch points so far this year.

Key programs drove our progress including our [ live X ] activations during tentpole events at MGM's renowned properties. These serve as both powerful acquisition tools and exclusive experiences for our valued players.

For example, our March Madness opening weekend events fueled BetMGM record number of Nevada first-time depositors, growing strongly year-on-year. Second, we're optimizing the Las Vegas flywheel by providing the best digital offering in Nevada and a seamless experience, whether you're playing with us during your visit or continuing to play when you return home. There's always on experience enables players to play more, earn more loyalty and reward points and redeem more omnichannel crossover products and experiences. This pool of customers is a focus area for us, and we've seen meaningful uplifts in key metrics in the half, including 30% growth in Nevada monthly actives and a 4x increase in the number of Nevada actives who continued playing with us when they returned to their home state.

Third, we continue to harness the power of retail to digital and vice versa by a robust portfolio of hybrid game titles.

Our omnichannel games account for nearly half of our top 20 grossing titles, including our recently launched Wizard of Oz titles that I spoke to a couple of slides ago. And our fourth key program is our differentiated live dealer offering. In April, MGM Resorts launched an immersive studio within the MGM Grand in partnership with Playtech for our players in Ontario. While it doesn't replace the magic of an in-person experience, it brings a little bit of that magic to our BetMGM Ontario players in between trips. And during the back half of the year, we'll be launching an exciting new game with the Family Feud franchise directly from this new studio.

With that, I'll hand over to Gary to dive deeper into the numbers.

Thanks, Adam. To start, please note that our explanation of how our figures relate to GAAP as well as our definition of contribution are provided in the materials accompanying this presentation. Financially, BetMGM has had a very strong start to the year, with a good first quarter being followed by an even better second quarter.

The plan that our team wrote for 2025 has jumped off the page in real life with an even greater exuberance than we had anticipated. Adam has covered a lot of numbers already, and I will return to the main figures from our financial statements on the next slide, but I want to briefly reiterate the key levers that have driven our accelerating performance in 2025 so far.

In iGaming, we've motored forward largely driven by both new player acquisition and player values being higher than expected. Average monthly actives and our NGR per player per month metric have been very strong. This powerful combination delivered iGaming NGR growth of 28% versus 2024 as first half. For OSB, our refined marketing and player management strategies are clearly working in concert with our product improvements. During our investor call in February, I highlighted the players who had already entered the tent before 2025 will drive significant revenue growth in this year. That's exactly what we've seen in the first half.

The changes we started making during last football season built potential energy, which has indeed transformed into Kinetic Energy this year. The retention of quality real money betters in OSB is also extremely encouraging. Our premium mass focus for OSB, particularly in the OSB only states has purposely shared lower value players. As a result, we've seen strong upticks in per player handle and NGR metrics for our cohorts.

Further, we also retained a larger-than-expected base of high-quality players. As planned, we decreased our player acquisition numbers versus last year. However, we still beat our 2025 internal targets for new player acquisition without running over on acquisition spend. I want to highlight that our OSP revenue growth was not flattered by [ Goodluck Resorts ]. First half GGR hold was 8.9%, broadly flat versus 9.0% last year. The house favorable Q2 results offset the opposite in Q1.

In the most simple economic terms, our big growth was driven by player management that reduced average monthly actives by 5% but pushed MGR margin up from 4.4% to 5.6%, and by our big 27% handle jump over the first half of '24.

As a reminder, in comparison to our OSP competitors, we believe our average player is higher staking and lower margin. And although product enhancements are on SGPs in parlay bets, are driving up parlay adoption, number of bets in handle as well as improving our [ field ] margin, we continue to see strong growth in pregame and live 6-pack bets. So expect aggregate win margin to remain relatively stable, which is consistent with our strategy. Okay.

Onto the P&L figures. Let's kick off with our second quarter EBITDA of $86 million that led to first half EBITDA of $109 million. Q2 was obviously a really great quarter for us with sports results going in our favor during the latter part of the quarter. Q2's year-on-year revenue growth exceeded Q1 coming in strongly ahead of expectations at 36%. For the second quarter, total revenue was $692 million, with iGaming delivering $449 million and OSB $228 million, while retail and other revenue was slightly down year-over-year at $16 million.

Kicking off the first half figures. Total revenue was $1.35 billion, plus 35% versus first half of '24, iGaming was plus 28% at $891 million, OSB was plus 61% at $422 million and retail and other was down 15% at $36 million. Our total contribution in the first half was over $300 million, more than 4.5x that of 2024 as first half. iGaming was very contribution positive and pleasingly, OSB was also contribution positive, which obviously reinforces our confidence in our expectation of OSB being contribution positive for the full year.

The great thing about OSB only states beyond the fact that we've tuned our business model in them to drive both high revenue growth and positive contribution is the option value they represent as additional states eventually start to legalize iGaming. Because of OSB, we have a large footprint of valuable customer relationships with likely iGaming players if their states have multiproduct.

At its most basic, our $232 million year-over-year improvement in first half EBITDA was achieved by the combination of stronger-than-expected revenue growth and the lower, more efficient marketing spend. In 2025 so far, new cohorts are generating much more revenue out of the gate compared to both last year and our expectations. You'll note that the bottom of the table includes capital expenditures to provide additional transparency on our cash flow. Our $150 million credit facility remains undrawn.

In fact, with over $150 million of EBITDA being generated this year, we may be in a position relatively soon where we could start returning cash to Entain and MGM Resorts.

And finally, on to how we see the rest of the year. We've increased our full year revenue guidance to at least $2.7 billion. We are both confident and optimistic about our revenue engine going into football. Do note though, with the impact of summer and the promotional weight on revenue, from NFL acquisition and reactivation campaigns, Q3 is expected to be our lightest revenue quarter of the year. As usual, Q4 is expected to be our biggest.

Given the importance of football season to our business, we think it's prudent to deliver guidance that we consider to be conservative at this point in the year. That said, we continue to see that the momentum in the business remains as strong as it's ever been, particularly as evidenced by the underlying health of our player cohorts across both iGaming and OSB.

Be aware that our year-over-year comparisons get tougher in the second half. We should revert to more normalized levels of growth as we lapped last year's Q3, which had abnormally high OSB margin and Q4, during which we were beginning to see benefits from the operational initiatives we've been discussing today. As mentioned a couple of times, we've upgraded our EBITDA guidance for the year. We now expect 2025 EBITDA to be at least $150 million. Two main factors are expected to make second half EBITDA lower than first half.

First, higher gaming tax rates, particularly in New Jersey, where we have a very large business, and in some other states too, including Illinois; second, the Q4 launch of OSB in Missouri. The bridge on the slide here gives visual context to our big move from negative EBITDA in '24 to our new guidance for '25. It's worth flagging a point that Adam mentioned earlier, a very high flow-through to EBITDA rate of 66% in our first half. This is unusually high and driven by this year's marketing recalibration. 40% to 50% is a more normal rate for future years, those that don't have major market launches and that aren't impacted by significant gaming tax rate changes.

To finish up for me, we have a high degree of confidence that we will be delivering $500 million of EBITDA in the medium term. The fundamentals of our business have never been more inspiring as you can see from the numbers we've shared with you today.

With that, back to Adam to wrap up.

Thank you, Gary. To summarize, the first half of the year has undoubtedly been a success and doubling down on what I said in April, the business is as healthy as it's ever been. We are executing well against the strategy we outlined earlier this year, and we've demonstrated sustainable and profitable growth to the tune of $232 million in EBITDA improvement year-on-year. We continued momentum across both of our core businesses, and now that we are halfway through the year, we are confident in our updated full year guidance, both on the top and bottom lines.

Beyond 2025, we will continue to see benefits of operating leverage as we grow revenue sustainably. Our path to $500 million of EBITDA is within reach, assuming continued execution, and eventually, we will look beyond this horizon. With that, I'd like to hand over the call to the operator for Q&A. Thank you very much.

[Operator Instructions] Your first question comes from Ed Young with Morgan Stanley.

My main question is on your marketing approach. It was very useful, Adam, to run through the Slide 5 -- Slide 6 to show how you're adjusting marketing and the knock-on effect you could still get on player days and actives, et cetera.

From a philosophical point of view, how do you balance this kind of very, I guess, very rational and very numbers-driven approach to also the optionality about investing into states where returns might not look as good, but you might feel that there's some sort of iGaming liberalization opportunity ahead? How do you sort of find that balance? And then my follow-up, just a very brief details one for Gary. Could you perhaps give the quantification of the tax impact you're expecting in H2 just to help us understand the conservatism in that bridge?

Thanks for the question. Look, philosophically, we are focused primarily on demonstrable ROI. So payback is our north star, paybacks are on north star, but obviously, a rational investor, a rational allocator of capital will invest in option value. As it stands today, part of your question is, well, what is the proximity of new iGaming states? And naturally, we would take that into account in our capital allocation. But first and foremost, and the vast majority of weighting is towards demonstrable and certain ROI.

Ted, on the tax question, we -- it's in the neighborhood of 25 impact in the second half of the year. We'll look to see how that can be managed, but then that's what we put through.

Your next question comes from Dan Politzer with JPMorgan.

Good morning, everyone, and nice results. First question, Adam, I think you mentioned something you're monitoring is the impact of adjacent businesses on the sector. Could you maybe just talk a little bit more about this and how you kind of envision this evolving ecosystem with regard to risks and opportunities?

And then just for my follow-up, at that $500 million EBITDA level that you said you can envision in the medium term, how do you kind of think about margins? You were helpful with flow-through and some of the parameters and marketing costs. But kind of any kind of bridge to kind of getting to a normalized margin, how you think about it?

Thanks, Dan. I'll let Gary take the second part of your question. I'll just deal with the first, which are the adjacent activities or the adjacent sectors risks and opportunities associated with that. really, in my mind, those are -- that's a reference to both the sweeps and the prediction markets.

We're pretty clear or we are clear that we believe sweeps to be illegal iGaming. And it's bad for the regulated sector. It's bad for state revenues. It's bad for players. And so we're delighted to see lots of states now increasingly not a lot -- increasingly, states adopting just legislation against the sweeps industry, I would say. What we would love to see and what we are certainly advocating for is more regulated iGaming states, I think BetMGM more than anyone stands to gain relatively most in the event that it happens, and we fully anticipate over time that to happen.

But the message to our lawmakers is the sweeps activity is happening anyway. As I've said, the good guys aren't benefiting. And so we would like to see that situation unwind and, in fact, reverse. In relation to prediction markets, we are monitoring this very, very closely. Very closely means daily, including all the court proceedings, including the new entrants returning to the U.S., so they're going to fight it out with a very vocal -- most vocal incumbent, including the wide -- assessing daily the wide range of possible outcomes.

And what I will say is that we won't be caught flat-footed, but nothing to talk about today.

To your EBITDA question, when we look at a normalized version of where we are with a couple of states launching right now, what we have in the plan is we know that Alberta is going to go next year. We're anticipating Alberta will go next year. And we've got Missouri coming on in Q4. You take that model forward, I think that we hit $500 million plus or minus a 15% EBITDA margin. Things can change. And as you know, if we launched in a state at a given year that can have an impact on marketing and margin this year with the benefit coming to revenue the next year, but are we going to normalized sort of level at say plus or minus 15% is where we hit $500 million.

Your next question comes from Ben Shelley with UBS.

I mean question one is what's serving as upside to the $150 million EBITDA guide? And then question 2 is, have you altered your H2 EBITDA guide or the sort of assumption around that since the start of the year?

Gary, do you want to take that one?

Yes. His British terminology on the first question, I understand the one about upside.

Why don't you please repeat just the first part of your question?

Sure. What's serving as upside to the $150 million EBITDA [indiscernible]

I mean we -- certainly, there's a world in which football results for one. I mean we had a tough football season last year. We obviously planned a sort of a normalized [ field ] margin, but football results can take it up big. We're also executing a more efficient marketing strategy that we've talked about. We'll see how that develops. There are certainly good players that we can gain. And one of the things that's really, really, really interesting from the first half of the year is the handle growth.

So from what we saw for Q1, at least in our public comps, we think that we were well above the level of the market for handle, the 27% growth. We really had 2 things that were happening in the first half of the year, and we talked about the recalibration of marketing and how that drops to the bottom line. Adam made mention that's something that's not going to be the big bottom line driver going forward. But when you look at handle, that's where we really exceeded our expectations.

And one thing I want to highlight about handle that's really important to understand is that compared to last year, -- last year had a big promotional environment and promotional environment drive instead of handle. It's not just the handle that's generated by free bets, it's also the downstream handle that's generated by the winnings from those. So that can be a factor of 10x, 15x that is the bet amount reach to the handle. So we do that. And we've also had a small push in our business towards a mix of more parlay-oriented bets and recreational bets that have smaller handle but higher margin.

So those are 2 factors that made last first half a tough comp. And even against the tough comp of not having that inflation from promotions and having more mix from high-margin bets with low staking, we're really very, very happy with that. So that obviously can carry forward into the second half, and we'll see -- we've had a lot of VIP play. The handle there has grown enormously. So we're really happy. So yes, there's some definite part of the business that could drive big upside. And that's not even mentioning that our iGaming business is rolling forward and it continues to grow, and we always joke that the depth of the market is very deep as we look at these same states that we've been in.

Yes. I mean that's -- if I could just add -- it's Adam again. If I could just add one point. One of the things that continues to surprise and impress on the upside is actually how strong New Jersey is. 10 years down the line, more, 10 years plus down the line following the introduction of iGaming, New Jersey continues to grow ahead of our expectations in iGaming. And so if that's the reference point against which other states journeys are likely to follow or mature in that way, the depth of this iGaming market is remarkable, and we can remain very confident of really attractive growth rates going forward.

Your next question comes from Barry Jonas with Truist Securities.

I wanted to follow up on the tax increases for the second half of the year or beyond. Maybe just walk through how you're thinking about mitigation strategies, particularly interested in Illinois.

Barry, thanks for the question. So in terms of mitigation strategy for tax, just I'll speak plainly. We are not going to pass on -- we have not passed on the surcharge to our players. BetMGM is a surcharge-free zone for now. Our approach is we've increased our minimum bet size to $2.50 in the state of Illinois to ensure that our theoretical expected margin, we at least cover the surcharge. So we're not underwater on small staking bets. And we like our players, the players in Illinois to choose their preferred operators in that context. But like most world, like everything in our business, we'll make a decision, we evaluate outcome and then we refine.

We have the -- yes, so we note that others have introduced a surcharge passing on the full cost of that surcharge to players. In the short term, we feel that this is a relative competitive opportunity for BetMGM and other players that feel that, that might be somewhat punitive.

So what happens in the future will depend on the financial impact of the approach we're taking at the moment. But we want at least for now BetMGM to be a surcharge-free zone. In terms of other mitigation strategies, they're outside of directly tax pass on. It's about promotional intensity, promotional intensity generosity, the form of how we give our promotions, is it bonus money versus things like that, which are methods of managing the tax consequences of the promotional environment. But I think for right now, that's what we're in a position to say.

That's really helpful. And then just for a follow-up, maybe just a general question. Any thoughts on the ramifications of the one big beautiful bill, particularly touching on the new 90% deductibility of gambling losses?

Yes. I'll tell you my opinion because there's some crystal ball stuff here, Barry, I think this is going to go away. I think there are enough smart people who recognize that this may not have been the best approach to take. There are a number of bills, as you'll be aware to -- a number of bills underway to unwind the 90% cap. And frankly, the -- we've run all the scenarios on the numbers and the current framework can result in really some anomalous -- just outcomes which don't make sense. So we think the rational outcome will prevail, and we think that this is going to go away.

Your next question comes from Joe Stauff with Susquehanna.

On the Las Vegas customer acquisition channel, just wondering how relevant this is for your user growth. Any way you can give us an idea of what portion of your 7% user growth in the quarter came or sourced from Las Vegas? And then the second larger question was the -- what are the larger, obviously, product initiatives you have in the pipeline, especially the ones that we'll see you launch at least before the football season and/or by the end of the year?

Thanks, Joe. Yes. So we don't break down where we source players, the breakdown by states. What I will say, however, is that consistently, Las Vegas is 1, 2 or 3 of new players acquired in a standard week. So really an important source of players. What's been really delighting me is that despite the normal summer slowdown, we've continued to have some really strong weeks of player acquisition coming out of Nevada.

So that -- I've talked about this in communications before. What we are delighted about given the relationship with MGM is the evergreen nature of that customer base. And that's being borne out by the fact that week after week, we're seeing a really good number of players, new players, new first-time depositors coming out of Vegas. And then when you parlay that into or combine that with the single account, single wallet framework, as we mentioned, I think, in the prepared remarks, we are seeing a 4x increase in the number of players that continue to be BetMGM is when they go home, go back to regulated space.

So we like the direction of travel. We think there's more to go. Your second part of your question was about product initiatives. And the relationship with MGM Resorts and the product is -- and omnichannel is one of the areas of focus. So we're seeking to supercharge what is already a performance that we're pleased with. So we would expect there to be more new players acquired via that MGM relationship than ever before. I'm looking forward to speaking to that in future sessions.

In terms of product initiatives, we've got a busy few weeks ahead. The areas that we are focused on include the core betting experience. So we're making improvements to bet slip. We're making improvements to further improvements to speed. One thing I want to call out specifically is a fundamental architectural change like how our app works has change. We've changed the framework of how the different components of our app fit together, and that's had what we've measured to be a 40% improvement, 40% plus improvement to aspects of the speed of our app in hand.

So this is very, very exciting for us. And actually, there's more to come on that probably later in the year as opposed to just prior to the football season. So I talked about bet slip. The things that we're focusing in on are the live experience. So live SGP will have for the first time ahead of the football season is the target. We're making improvements to what we get out of -- we stopped talking about Angstrom. Angstrom is now just part of the Entain ecosystem.

But the output and productivity of Angstrom is going to be available and incorporated into our product. So you will see improved combinability. You'll see a consistent experience between -- of building parlays between pre-live and live. You will see an expanded player props offering, an improved player props offering. So quite a lot. And we've talked about the iGaming side already, looking forward to delivering only at BetMGM content rooted in entertainment with an omnichannel orientation. And yes, just only of bet income. So we're looking forward to that, and that's all coming over the next few months.

Your next question comes from David Katz with Jefferies.

I wanted to just go back to this concept of you seem to be sort of finding your people better and better. And Adam, I think you may have just answered that the MGM resource is accelerating over time. And I just wonder what are the gating factors to that sort of access to those MGM players? And within the mix, can you talk about sort of the 80-20 rule or the concentrations, where you are today and where you aspire to be? Those are my question and my follow-up.

Sure. We are finding people better and better, Dave. That observation is absolutely right. We're being -- frankly, we're being helped by the sophistication of our marketing ecosystem. Being able to targeting and retargeting and using our first-party data in how we spend money is proving to be very effective. So for example, to the extent that connected TV, a logged in session by a user, which consumes media and content allows us to target that individual through marketing in a much more refined manner. And actually, this is where the 2 parts of your question come together because one of the opportunities for us is to enhance that MGM data with MGM data to a much greater degree.

Now the second part of your question asked during 80/20, some kind of balance between now and future state and the scale of the opportunity, I'm not sure yet. What I know, because we haven't unlocked the full potential of the MGM data, and that's part of the plumbing that's underway. And -- but what I do know is that how we use the data is incredibly refined. And so the extent to which we can enhance our -- the data that we use to filter how we spend money, we'll learn over the coming months. So to put a scale on it, I'm not yet in a position to do that, David. But certainly, I think that there is tremendous value ahead given the sheer magnitude of the MGM Rewards program.

Your next question comes from Monique Pollard with Citi.

The first question was just to Gary's point on the potential soon for BetMGM to be able to start returning cash to the parent, Entain and MGM Resorts International. I just wanted to get a sense for potentially the level of EBITDA or EBIT, whatever the metric might be, you would need to be at, you think, to feel comfortable for that cash returns process to start potentially? And then the second follow-up was just whether you could give us the split of the 1H contribution or the 2Q contribution between OSB and iGaming, please? I understand that the OSB is positive. If you could give a number, that would be great.

Gary, do you want to take those?

Yes. Cash-wise, we -- the guidance we gave gives us the cash that we could be in a position to start sending money back. So we started the year with a good cash balance. We're going to add -- we're going to do $150 million at least of EBITDA. So we will have excess cash. So the question is how much goes back and when we'll be in a position to figure that out. But we -- with this guidance, we're in a position that we can if we choose or if the parents choose to receive back cash that transfer can be made. We're very happy that -- I'm sorry, that sports is now contribution positive, but I mean it's still gaming is going to be 2 to 3x the size of the contribution that we get from sports.

Your next question comes from Brandt Montour with Barclays.

Just a quick one for me. Maybe, Adam, if you could just give us a state of the union on the iGaming new legislation momentum in the states. And specifically, obviously, we didn't get anything across the finish line this year. But maybe going beneath the surface, if you were surprised, good or bad by anything you saw and if there's anything sort of green shoots or reasons to be more or less hopeful for future legislation.

Thank you for the question. As I referenced in one of my earlier answers, we are incredibly motivated to see more iGaming states. And frankly, I'm personally encouraged that 2026 saw the -- sorry, excuse me, 2025 has seen the highest number of new builds introduced than, frankly, since Michigan introduced iGaming.

So what I -- the thing that we know for sure is that there is increased impetus for new legislation. The on-the-ground reality is that every state is a complex set of considerations. And so that's the offset. My encouragement of new builds being introduced tells me actually that more iGaming states is a function of when and not if. And without wanting to get too out of my lane, it's the reduced support for state coffers, reduced federal support for state coffers drives the need for additional and new revenues at a state level.

And frankly, if I put the question about adjacent markets with this question together, you put them together, you've got a sweet industry, which was very developed. Players were playing what are essentially iGaming products anyway. You have what are likely to be meaningful budget shortfalls -- and so what we can -- what we are -- and the purported impact or the cannibalization concern, we have more and more data to demonstrate that the cannibalization concerns are overstated. So you put all that together with more bills being introduced than ever before, I feel like it's only a matter of time before we see a meaningful increase in the number of iGaming states.

Your next question comes from Adrien de Saint Hilaire with Bank of America.

A couple of questions. I think you've disclosed the capital expenditures for the business for the first time. Obviously, that number seems to be a little volatile quarter-by-quarter. So can you just tell us what's the right way to think about the required capital intensity for this going forward, either in absolute terms or as a percentage of sales or whatever metric you prefer? No, I was going to say just following up on something you said in your prepared remarks. Did you say that you feel that your net win margin was now at a sort of steady state? Or maybe I misheard that and you referred to promo, I wasn't quite sure.

Well, on the CapEx, the numbers we have in there are sort of a representative number of what we would expect on the period. It can go up or down depending on projects like new state legalizations where we can have a data center build that adds to that. We can have capital expense around the licenses to get into certain states. But overall, the equipment costs, this is representative of a run rate that we're looking at.

Look, as we move on in the future, the different parts we can look at of how we're going to handle our equipment. There's stuff that may go into the cloud, we're going to look at, that could change the dynamics there. But for now, the numbers you see there are a good representation of sort of a run rate.

And then to your second part, which was about net win margin. Look, the improvement we've made, we've described the year-on-year changes to net win margin. The 2 biggest drivers of that net win margin, of course, are the headline margin, your gross win margin and then our promotional environments. On the gross win margin, we are not guiding to a meaningful change in the short term. While I personally believe there is some upside and the investment we're making with Entain in trading platform and trading tools is focused on exactly that question. Until we see the impact in underlying pricing and the impact on our gross win margin, I don't want to guide on that in any way. But there's a lot of work being done to improve the underlying win rate with the same bet mix.

So GGR margin is about where we should expect it. The promotional environment, you've seen some operators in the sector are promoting extremely heavily, we would argue, uneconomically, and that's just a function of where we and they are at this point in time. What I will say is that our promotional strategy and the promotional environment generally is stable. Of course, the promotional environment is impacted by the profile of new state launches. So it's early stages of new states will drive up promotional intensity and actually what we're anticipating when we launched in Missouri at the end of the year.

So those are the factors. But I think core to your question is stable-ish promotional environment, ignoring new states launch profile. And then on an underlying basis, our GGR margin, we're not guiding to upgrades. So pretty stable.

I think a point we might have made last time, there's more than one way to scan it. We have higher staking players that like what they like, and we make our growth typically compared to our competitors with more volume of betting and more staking in terms of handle and then a lower margin than some of the recreational margins you'll see.

Your next question comes from Shaun Kelley with Bank of America.

Adam or Gary, maybe just if we wanted to turn the page and think about some of the items for 2026. I just kind of wanted to unpack your comment, Adam, in the prepared remarks about not expecting further reductions in marketing spend. I think we marry that with some of the promotional outlook you just kind of mentioned in the answer to Adrien's question a second ago.

Can you just help us think about where maybe within that flow-through range, the 40% to 50% we should be? We also have to think about tax headwind for New Jersey and the Alberta launch. I think your above-average strength in Canada. So maybe you can help us marry all those pieces together and think about flow-throughs for next year kind of based on the baseline and all the comments you've aggregated so far.

Yes. Well, thank you for that. Now let's focus on the future, which is what we're excited about, too, Shaun. So anyway, in terms of flow-through rate, Gary, do you want to handle that?

Yes. So we talked about 40% to 50% being sort of normalized. We talked about how 66%, I think what we had first half being abnormal. I think when you look at the full year impact of tax with the fact that we're launching with Alberta, we should expect a lower-than-normal flow-through rate for '26 and then we would come back and sort of normalize to that 40% to 50% after next year. So next year what are the 2 things that can vary things? One is the impact of the tax increase and two, the launch of Alberta.

Super helpful. And then as my follow-up, Adam, just to kind of build off your high-level comment on prediction markets. If we take a step back here, it looks like there's a bit of a land grab going on, on maybe the technology side of what's happening there. I'm curious for your views on that and sort of maybe either your thoughts on moats in that business or your thoughts on sort of ability or desire to be a first mover, especially when it comes to licensing in that business, if, again, there's sort of limited real estate available to get access to that and maybe a time delay if you choose a different path.

Yes. Let me be clear. We have the ability. We do not have the desire to be a first mover. Our state regulators have been very clear. Our tribal partners have been very clear. 34 states' attorneys general have been very clear. They do not believe prediction markets should serve -- should offer sports contracts because that is sports betting. They would argue that, that is sports betting.

What I will also say is that the predictions market and these types of markets generally are very much liquidity driven, right? So there are -- so your point about does first mover have an advantage? I think the advantage is conferred by liquidity, not who gets there first. And so the new entrants to the market, the new entrant, the returner to the U.S. with their planned ownership of technology and understood scale would be formidable. And the likes of the likes of the Robinhoods and the cryptos and the coin bases whose ability to invest and grow a liquidity pool far exceeds, I think, sports betting market incumbents.

To the point where I feel like it's the prediction market operators who are more likely to have an outsized market share than those trying to get into the market move. And so I don't think we have a -- BetMGM has a right to win in trying to become a leader in what is a very different market, from a regulatory perspective, very different; from a technical perspective, from a risk management perspective, just very different.

And so we are -- as I said, I know an FCM license to become a partner to a platform is a 12-month process. Right? So we won't be surprised by -- frankly, we won't be surprised by anything in this domain. And as I said before, we are following it very, very closely. We are not underestimating the possibility that this becomes a meaningful factor in our sector, but we are not going to be a first mover in this domain.

That concludes our question-and-answer session. And I will now turn the call back over to Adam Greenblatt for closing remarks.

Just a short one for me. Thank you for dialing in, be it the West Coast of the U.S. or further afield in to our European colleagues. I hope you share our enthusiasm and excitement for where we are at BetMGM and our outlook and just looking forward to a very successful football season. Thanks very much, and hope to see some of you in the coming months.

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.