Four years ago, Entain entered Central Europe with the momentum of a buyer sweeping emerging markets. In 2022, it acquired 75% of Croatia's SuperSport for approximately €690 million, and in 2023, it acquired Poland's sports betting king STS for £750 million. Both transactions, along with Czech EMMA Capital, were incorporated into the joint venture platform Entain CEE. The head of corporate expansion at the time declared that the long-term vision was to enter more than a dozen Eastern European countries, without exception. However, on June 25 this year, Entain agreed to sell 20% of Entain CEE back to EMMA Capital for approximately €425 million, reducing its stake from 67.5% to 47.5%, with the control subsequently transferred. This was not a forced sale due to a performance slide—on the contrary, the CEE division's net gaming revenue reached £522 million in 2025 (up 7% year-on-year), with EBITDA rising by the same margin to £183.7 million, with STS and SuperSport each firmly holding the market leadership. PASA's official website noted that the real push behind the sale was not in Warsaw or Zagreb, but in London—after the UK remote gambling tax was abruptly increased from 21% to 40%, the effective tax rate on Entain's UK business had exceeded 80%.
The UK took a hit, Central Europe was forced to transfuse
Reuters first disclosed the transaction negotiations on June 18, making the causal chain quite clear: since April, the UK had raised the remote gambling tax from 21% to 40%, and the sports betting tax from 15% to 25%, with Entain's stock price tumbling about 30% since the tax reform was announced, and the effective tax rate on UK profits soaring to over 80%. Rothschild & Co Redburn analyst Andrew Tam calculated that the implied enterprise value of the CEE transaction was about £1.83 billion (9.3 times EBITDA), and pointed out that Italy might be the next target for sale. His logic was straightforward—after slimming down the balance sheet, investors would focus on BetMGM, the "main course."
But why start with CEE? The answer lies in the transaction structure. Entain, EMMA Capital, and the Juroszek family had a set of existing put/call option arrangements that made this transaction the easiest to execute quickly across the entire group. After the transaction, EMMA's stake increased to 42.5% and obtained the voting rights of the Juroszek family's 10% stake, achieving effective control. CEO Stella David characterized this transaction as "a decisive first step in the complete exit from Entain CEE," reflecting "robust capital allocation discipline," with the proceeds used to reduce debt, saving about £20 million in interest expenses annually.
Poland is not a market problem, it's a tax problem
Marek Prochota, a gambling lawyer at RM Legal in Wroclaw, offered an intriguing assessment of the Polish market—he described it as a "paradox." On one hand, the channelization rate for Polish sports betting is estimated at around 78%, quite impressive by continental standards, with strong market growth since the 2017 reforms and extremely strong product capabilities of local operators. On the other hand, the online casino channelization rate is only 61%, constrained by the natural bottleneck of a state monopoly. More fatally, the tax structure: Poland imposes a 12% turnover tax on betting amounts, not based on GGR.
"A 12% turnover tax fundamentally changes the economic model of this business," Prochota stated bluntly, "It compresses profit margins, restricts pricing flexibility, and forces licensed operators to be extremely disciplined and creative in marketing, CRM, and product development." Ironically, he believes this harsh environment has precisely forged the competitiveness of entities like STS—"Incumbents have learned how to survive in this environment, while many global operators are blocked by the tax burden and the lack of an online casino license."
But this comfort zone may not last long. Prochota judged that Poland, being "too big and too dynamic" a market, cannot be ignored indefinitely, even if tax reform may not come soon, Betano, Bet365, or MGM will eventually take a serious look at this table. In fact, pressure has been coming from multiple directions. Entain CFO Rob Wood admitted in Q1 2025 that Poland's GGR profit margin was "around 20%" and noted "increased promotional intensity by competitors"; by Q2, he was forced to acknowledge that Poland was the only market "losing some market share," due to competitors "sacrificing profits." In the first half of 2025, Poland's online revenue only increased by 2%, while Croatia's grew by 14% during the same period. David insisted on not "participating in a race to the bottom," stating that Poland "remains a market with long-term appeal."
Bet wrong: Online casino license waited four years without opening
Dr. Gabriele Stark-Lutkiewicz Schwenhost, a senior lawyer at CMS Law Firm's German office, broke down the core assumption when Entain initially acquired STS at a high price: "At the time of the transaction, the market generally believed that Poland would eventually move towards structural tax reform, even possibly opening up online casinos to private operators." Four years later, this assumption has still not materialized. She pointed out that Entain could empower STS through technology, data, transactions, CRM, and operational discipline, but "simply cannot replicate a multi-product sports betting plus casino full model in Poland, which is a fundamental constraint."
Prochota was equally cautious about political change. The next major election in Poland falls in autumn 2027, but "any favorable legal changes should be seen as potential additional benefits, not assumptions of the baseline scenario." His advice to potential buyers was almost a risk checklist: "Investors should assume a harsh tax environment, no private online casinos in the short term, intense competition, and slow regulatory evolution. Any liberalization is a 'bonus,' potentially of great value, but should not be relied upon as a prudent acquisition model."
A bigger picture: The survival rules for London-listed operators have changed
Schwenhost believes that the performance of Entain CEE—EBITDA still growing—means "it's hard to say that regulatory or strategic upside has been exhausted." This transaction reveals deeper logic than financial data: London-listed gambling operators are using even profitable, growing quality assets as tools to relieve balance sheet pressure in response to the domestic marginal tax rate of over 80% in the UK. Entain once claimed it was "fully capable of being a long-term industry winner"—what investors need to watch next is whether this confidence can still stand after saying goodbye to a steadily growing profit segment.
PASA's official website believes that Entain's transaction is essentially the product of two opposing forces squeezing together: the UK's tax hammer coming from one side and Poland's regulatory ceiling from the other. When a company pays £750 million in real money to enter a market and then has to voluntarily exit while performance is still growing four years later, this is itself the most honest footnote to the current European gambling regulatory and tax environment.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
Original deep gambling channel: https://t.me/gamblingdeep
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PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
