Why is Entain folding its winning hand in Poland and Croatia?

Four years ago, Entain arrived in Central and Eastern Europe with the swagger of a company buying the future. It paid roughly €690 million for 75% of Croatia’s SuperSport in 2022, and £750 million for STS, Poland’s sports-betting champion, in 2023. It folded both into a joint venture with Czech firm EMMA Capital called Entain CEE. Mikolaj Cymerman, the unit’s head of corporate development, called the strategy a home for regional “local heroes”. 

“The long-term vision is to be in every single one of those markets,” he said of the dozen countries then on Entain’s wish-list. 

That vision has been shelved. On 25 June Entain agreed to sell a 20% stake in Entain CEE back to EMMA Capital for around €425 million, the first instalment of a planned full exit. Entain has declined to comment for this article. 

Numbers don’t explain the Entain CEE sale 

The reversal is striking given how the unit has performed. Entain CEE generated £522 million of net gaming revenue in 2025, up 7% year-on-year, with EBITDA rising the same amount to £183.7 million. STS and SuperSport have each held their number-one positions throughout. 

Reuters, which broke the story on 18 June, said Entain was under pressure to cut costs after Britain raised remote gaming duty from 21% to 40% and sports betting duty from 15% to 25%, both from April. Entain’s shares have fallen around 30% since the tax rise was announced, and the effective tax rate on its UK profits will now exceed 80%.

Analyst Andrew Tam of Rothschild & Co Redburn put the CEE sale’s implied enterprise value at £1.83 billion – 9.3x EBITDA – and flagged Italy as a likely next disposal. He argued a leaner balance sheet would let investors properly value BetMGM as “the main prize” in the group, in his words. 

An existing put-and-call structure with EMMA and the Juroszek family made CEE the easiest asset to move first. Entain’s stake falls from 67.5% to 47.5%, EMMA’s rises to 42.5%, and the Juroszeks’ 10% stays put but its voting rights pass to EMMA, giving it effective control from completion, which is expected in Q4 2026. CEO Stella David called the deal “a decisive first step towards Entain fully exiting Entain CEE”, reflecting “robust capital allocation discipline”. Proceeds will cut debt, saving an estimated £20 million a year in interest. 

Growth with strings attached 

None of this points to a business in decline. Marek Plota, a Wrocław-based gambling lawyer at RM Legal, calls Poland “a paradoxical market”.

“The licensing model for sports betting works relatively well despite the unfavourable tax regime,” he says. “The market has grown strongly since the 2017 reform, local operators have built very competitive products, and channelisation in betting is estimated at around 78%, which is a solid outcome by European standards.” 

Online casino tells a different story: channelisation there “remains significantly lower, at around 61%, highlighting the structural limitations of the current monopoly model.” Even so, Totalizator Sportowy, the state operator, “has built its online casino position from zero within just a few years” he notes. It has managed to capture a meaningful share of the market despite operating under strict constraints, including a ban on advertising and a relatively one-dimensional product offering.

Poland’s tax impact in Entain CEE

On tax, Plota is blunt: “The key burden is the 12% betting tax calculated on stakes and this rate has remained unchanged since the Gambling Act of 2009,” he says. “A 12% tax on turnover fundamentally changes the economics of the business. It compresses margins, limits pricing flexibility and forces licensed operators to be extremely disciplined and creative in marketing, CRM and product development.”

Paradoxically, he argues, “this is one of the reasons why the Polish betting product has become so strong”, and the same regime “protects the status quo to some extent” since incumbents like STS, Betclic, Superbet and Fortuna “have learned how to operate in this environment, while many global operators are deterred by the tax burden and the lack of online casino access”.

But he doesn’t expect that comfort to last. “Poland is too large and too dynamic to be ignored indefinitely. Even if tax liberalisation does not come quickly, groups such as Betano, Bet365 or MGM will eventually have to look seriously at Poland.” 

Entain’s own transcripts show a bumpier ride than headline growth suggests. CFO Rob Wood told analysts in Q1 2025 that Poland traded at “a GGR margin in the 20s”, flagging “increased promotional intensity from peers”. By Q2, that had become an admitted share loss: “The only place where we’re losing a little bit of market share at the moment is Poland,” Wood said, blaming competitors’ “sacrificing profits”.

Poland’s H1 2025 online revenue grew just 2%, against 14% in Croatia. Stella David said the business had refused to “race to the bottom” on bonusing, insisting “Poland is a long-term attractive market” through the rough patch.  

The core limitation 

Much of Entain’s excitement about STS rested on a bet that Poland would open online casino to private operators. But that bet hasn’t paid off. “At the time of the transaction, there was a strong belief that Poland could eventually move towards structural tax reform and, possibly, the opening of online casino to private operators,” says Dr Gabriele Stark-Lütke Schwienhorst, senior associate at CMS Law in Germany. “This has not materialised so far and the legal constraints remain. This limits the type of synergies Entain can realise compared with more liberal European markets.” 

Entain, she says, “can support STS through technology, data, trading, CRM, operational discipline and group know-how, but it cannot simply replicate a full multi-product sportsbook-plus-casino model in Poland. That is the core limitation.”

She adds that “the Polish betting market itself is not the problem. It has grown by around 20% year-on-year over the last several years and betting channelisation is relatively strong. What it lacks is a regulated private-sector online casino framework.”

Cautious of political change in Poland

On value, Stark-Lütke Schwienhorst notes the reported EBITDA rise to £183.7 million for Entain CEE “suggests the asset is still performing despite the normal regulatory friction of licensed betting markets,” which “makes it harder to say the regulatory or strategic upside has already been exhausted”.

Plota is equally cautious on political change. “I would not expect full liberalisation of online casino in the short term,” he says. “If reform does come, it will likely be driven by data showing that the state is losing tax revenue, regulatory control and player-protection oversight.”

Poland’s next election falls in autumn 2027, but “any favourable legal change should be treated as a potential additional benefit, not as the base case”.

His advice to buyers? “Poland should be valued on the basis of the law as it exists today, not on the assumption that liberalisation is imminent.” He also flags a shifting order beneath STS. “Market estimates suggest that Betclic and, behind it, Superbet may already have dethroned STS or may be very close to doing so,” built through “obtaining licences, investing in product and marketing, and using capital for customer acquisition rather than paying an M&A premium.”

His summary for prospective buyers: “Investors should assume a demanding tax environment, no private online casino in the short term, strong competition and only gradual regulatory evolution. Any liberalisation would be a bonus, potentially a very valuable one, but not something on which a prudent acquisition model should depend.” 

Learning from past mistakes 

On enforcement, Plota says Poland’s 2017 reforms – the register of prohibited domains, ISP blocking, restrictions on payments to blacklisted domains, AML obligations – have helped, but “enforcement is not the same as elimination”, since illegal operators can clone domains, redirect traffic and maintain communication with users through affiliate networks, influencers, social media and messaging channels. Leakage, he says, “remains structurally high”.

Entain’s willingness to sell a well-performing champion has to be read against its recent history. 

The company has previously been reported as having struggled for years to integrate a wave of European acquisitions, contributing to poor performance in 2023 and 2024. At ICE 2025, former chief executive Gavin Isaacs discussed the scale of bringing disparate brands onto one central platform.  

As early as Q1 2025, Stella David told analysts “there are no sacred cows” in the portfolio – language that then applied to speculative questions about Georgia and Italy, now applies concretely to Poland and Croatia. 

Dr Stark-Lütke Schwienhorst believes the existing EMMA arrangement shaped the outcome. “The existing ownership framework gives Entain and EMMA a defined route to change control without starting from scratch, although Reuters also makes clear that discussions are still at an early stage and no transaction is certain.”  

On the wider buyer pool, she is cautious: “On the information currently available, EMMA Capital is the only specifically identified candidate, so I would be cautious about drawing broader conclusions on the depth of the buyer pool for a business of this scale.”  

The bigger picture 

The Entain CEE sale carries two lessons. First, London-quoted operators are treating even successful, cash-generative businesses as fungible sources of balance-sheet relief rather than face an 80%-plus marginal tax rate at home. Second, regulation cut both ways: Poland’s tax regime built STS into a disciplined leader, but the absence of casino liberalisation also capped the very upside that justified paying £750 million for it. 

Entain calls itself “well positioned to be a long-term industry winner”. Investors will be watching whether that confidence survives the loss of one of its more consistent top performers.