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    How Tax Hike Plans At Entain (LSE:ENT) Has Changed Its Investment Story

    Simply Wall St·10/31/2026 23:36:55
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    • Entain has quantified an additional annual cost of about £25 million from the UK government’s decision to lift Machine Games Duty on certain gaming machines from 20% to 25% starting April 2027, and plans to use shop estate changes, efficiency moves and market share efforts to offset this by the end of 2028.
    • The same tax move that pressures Entain’s UK and Ireland retail margins could also thin out weaker rivals, giving the group a chance to capture customers who may be displaced if competitors close outlets or scale back.
    • We will now look at how Entain’s investment narrative could shift as it absorbs higher UK Machine Games Duty into its retail model.

    Compare how Entain is handling tax and regulatory pressure with a curated list of other companies screened for resilience in tougher conditions through our 5 resilient stocks with low risk scores

    Entain Investment Narrative Recap

    To own Entain, you need to believe the business can turn regulated online betting, retail shops and proprietary tech into stronger cash generation despite heavier tax and compliance headwinds. The higher UK Machine Games Duty adds cost, but management is already targeting mitigation through estate changes and efficiency, so the core thesis around better quality earnings remains intact.

    In the short term, the key catalyst is whether cost optimisation, portfolio pruning and tech investment actually show through in profit improvement from a still loss making base. The biggest risk is that tax and regulatory pressure, from the UK to markets like Brazil, keeps eating into margins faster than operational gains can offset.

    The clearest linked development is Entain flagging that UK Machine Games Duty will move from 20% to 25% from April 2027, with an estimated £25 million annual cost. Management aims to offset that by the end of 2028 through shop rationalisation, operational efficiencies and pursuing market share where weaker peers may retrench.

    For investors, the key question is execution. If estate changes, data driven marketing and tech driven cost savings land as planned, that supports the story of earnings recovery and eventual cash flow improvement. If not, the combination of higher tax, legal scrutiny such as the AUSTRAC case, and already weak historical returns could keep the stock in the penalty box.

    Entain Earnings Assumptions Behind Analyst Forecasts

    Entain's narrative includes analyst projections of £5.4 billion in revenue and £319.7 million in earnings by 2029. These figures are based on assumptions of relatively flat annual revenue growth and an earnings increase of about £935.2 million from a current loss of £615.5 million.

    Uncover why Entain's fair value indicates an 85% potential upside to its current price that could narrow faster than many investors expect.

    LSE:ENT 1-Year Stock Price Chart
    LSE:ENT 1-Year Stock Price Chart

    Exploring Other Perspectives

    The most optimistic analysts focus on Entain’s potential to turn cost savings into much higher earnings, not just absorb taxes like the Machine Games Duty hike. Before this news, the bullish group was modelling about £6.2b of revenue and £758.0m of earnings by 2029. You can treat that as one possible path and compare it with your own view.

    Explore 3 other Entain fair value estimates, including one that suggests as much as 103% upside from the current price!

    Decide For Yourself

    Don't just follow the ticker. Dig into the data and build a conviction that's truly your own.

    Looking For More Ideas Beyond Entain?

    If you want to stress test your thesis on Entain and see how it stacks up against other opportunities, the Simply Wall St Screener can help you quickly surface stocks that fit different risk and return profiles.

    • For investors who care most about balance sheet strength and business durability, start with this list of solid balance sheet and fundamentals (10 results) to see which companies may hold up better when conditions get tougher.
    • If you are hunting for potential mispricing, a good next step is to scan a 12 high quality undervalued stocks that blend resilient cash generation with what our models flag as attractive value.
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