Entain is exploring the sale of its Central and Eastern Europe operations to joint venture partner EMMA Capital, according to two sources briefed on early-stage discussions. The London-listed operator, which commands a $4.63 billion valuation, could use proceeds from the sale to shore up its balance sheet at a critical moment.

Cutting Losses Rather Than Chasing Growth

This isn’t expansion thinking. It’s damage control. The company faces mounting pressure from the UK’s punishing new tax regime, which nearly doubled levies on online casino games to 40% in April. Sports betting tax jumped from 15% to 25% in the same hit. Those increases alone are expected to cost the company roughly $264 million annually.

EMMA Capital, established in 2022 following Entain’s acquisition of Croatian operator SuperSport, remains a minority-stake operation despite Entain holding majority control. The joint venture expanded further in 2023 with the $990 million acquisition of Polish betting firm STS. Now Entain looks ready to step back from the region entirely.

The Financial Reality

The numbers tell the story. Entain’s share price has tanked roughly 30% since November, when the tax rises were announced. Even heavyweight JPMorgan Chase has reduced its stake from 7% to 3%. The company recorded a $644 million impairment charge against UK operations and posted a $898 million post-tax loss for the year ended December.

Right now, the firm is offsetting just 25% of the new tax burden. Entain aims to hit 50% mitigation by 2027. Divesting CEE operations would accelerate that timeline considerably.

No Deal Yet, But Discussions Are Real

Both Entain and EMMA Capital are keeping quiet. The sources, who requested anonymity, emphasised that talks remain preliminary with no guarantees on the table. A reciprocal call-and-put option between the parties, exercisable from 2025 onwards, gives either side a contractual pathway to restructure their relationship.

What’s clear: Entain is running through options to reduce debt and stabilise earnings. The CEE market, for all its promise, represents dead weight when the core UK business is bleeding cash.