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Entain CEO Jette Nygaard-Andersen resigned from her position on Wednesday, capping a tumultuous period for the European gambling giant during which several institutional investors questioned her leadership of the company.

Nygaard-Andersen’s resignation comes less than two weeks after Entain completed a Deferred Prosecution Agreement with U.K. authorities over the company’s black-market activities in Turkey. Nygaard-Andersen, who became CEO of Entain in January 2021, steered the company through a challenging period amid Turkish allegations over a seven-year span through 2017. The allegations were first made long before Nygaard-Andersen joined the company.

In North America, Entain maintains a 50% stake in BetMGM, a joint venture with MGM Resorts.

“Under Jette’s leadership, Entain has executed a fundamental strategic shift towards regulated or regulating markets, overhauled its governance, transformed its operations, and significantly improved its customer offering,” Entain Chairman Barry Gibson said in a statement. “We are all indebted to Jette for her dedication to steering the company through such a difficult time.”

Implications of Turkish settlement

Last week, U.K.’s Crown Prosecution Service entered into a Deferred Prosecution Agreement with Entain to settle the HM Revenue & Customs (HMRC) investigation into the company’s alleged transgressions in Turkey. Entain, formerly known as GVC Holdings, sold off the Turkish unit prior to its acquisition of Ladbrokes Coral in 2018. The Turkish division made up a considerable part of GVC’s operations, generating 2016 revenue of approximately €100 million ($110 million). There is a fertile black market in Turkey after the country banned non-state online gambling in 2006.

Questions around potential bribery allegations surfaced in 2019, two years after GVC Holdings sold Turkish unit Sportingbet to Rospo Malta, a third-party firm that provided IT services to the company. At the time, former GVC boss Kenny Alexander owned a stud farm in Scotland with Ron Watts, one of three owners of Rospo, the Sunday Times reported. The conduct related to Entain’s Turkish business stemmed from the company’s failures to prevent bribery pursuant to Section 7 of the U.K. Bribery Act 2010.

In an unprecedented deal, Entain agreed to pay a fine of £585 million ($732.4 million) to settle the bribery charges. Among the mitigating factors in the settlement, Entain provided significant cooperation to the investigation and made wholesale changes of senior management in the years since the Turkish sale, Justice Victoria Sharp wrote in last week’s approved summary of judgment.

Ladbrokes owner Entain’s CEO resigns after firm’s bribery probe settlement https://t.co/bSFPDfI6yW pic.twitter.com/RKWpYRt1Bg

— Reuters UK (@ReutersUK) December 13, 2023

“The past three years have been rewarding and challenging in equal measure. The resolution of the HMRC investigation into the legacy business, which was sold by a former management team in 2017, offers a clean inflection point for me and for Entain,” Nygaard-Andersen said in Wednesday’s statement. “The Group is now safe, stable, and sustainable, and I believe that this is the right time to move on to other business and career opportunities.”

Nygaard-Andersen received praise from colleagues and industry advisors for her focus on responsible gambling during her tenure. Under her leadership, Entain designed the Advanced Responsibility and Care program, an initiative that incorporated artificial intelligence into detecting behavioral markers for problem gambling.

Still, the executive faced criticism for some M&A missteps, namely a £750 million offer for Polish sportsbook operator STS that an activist investor felt overvalued the company. More recently, Goldman Sachs downgraded Entain amid growth concerns over its online gaming division. The executive also pejoratively received the nickname “Private Jette” for her proclivity for using company-provided jets to reportedly attend several Grand Prix events.

Merger questions resurface

This fall, Nygaard-Andersen appeared on a panel at the Global Gaming Expo (G2E) in Las Vegas with Bill Hornbuckle, her CEO counterpart at MGM Resorts. Under the joint online sports betting venture, MGM Resorts provides the imprimatur of the company’s globally recognized brand while Entain powers the sophisticated tech stack for the platform.

On a hectic sports day, Entain’s sports betting platform handles about seven times the traffic of Amazon on a typical Black Friday, according to BetMGM.

As rumors flew of a potential breakup, Hornbuckle attempted to quash them at the prominent conference. Speaking before a large crowd at the Sands Expo Center, Hornbuckle told CNBC reporter Contessa Brewer that he was satisfied with the structure of the partnership. Moments later, Nygaard-Andersen concurred, informing the audience that BetMGM remained a “great marriage” for both parties. 

On the final day of G2E, a high-level U.K. gambling source told Sports Handle that he would not be surprised if merger speculation picked up once Entain reached a settlement on the DPA.

“Departure of Jette Nygaard-Andersen comes after several costly acquisitions and company’s languishing share price”

Gambling group Entain’s chief steps down https://t.co/ZsCq2EVsEK

— Alfonso Straffon (@astraffon) December 13, 2023

Speculation on a possible MGM-Entain divorce first grew intense as early as 2021, when DraftKings made a $22 billion cash-and-stock proposal to acquire Entain. The proposal doubled an $11 billion offer from MGM earlier that year that Entain rejected, claiming it substantially undervalued the company. DraftKings later abandoned the proposal.

While MGM Resorts may consider several strategic options in the coming weeks, analysts will closely monitor the possibility of a renewed acquisition attempt. As of Wednesday afternoon, Entain traded at 847.80 pence, producing a market capitalization of $5.43 billion.

Alternatively, MGM Resorts could make a bid to acquire Entain’s 50% stake in BetMGM, effectively buying out its partner in the venture. Though BetMGM remains one of the top operators of a casino and sports betting app in the U.S., the venture is looking to increase market share on the sportsbook side.

The Entain board named Stella David, a non-executive director, as interim CEO. David will take the helm this week and will remain in the position until a permanent replacement is named, the company said.

Entain shares ticked up 44 pence on Wednesday, gaining more than 5% on the news of Nygaard-Andersen’s departure. Still, Entain has fallen more than 25% since Nygaard-Andersen took the position in 2021.

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