Entain set to drop from volatile FTSE100 index

City analysts expect Entain to be downgraded from the FTSE100 to the FTSE250 in the forthcoming quarterly review of the FTSE UK Index Series. Entain and volume housebuilder Persimmon are identified as the two companies most likely to leave the blue-chip index when FTSE Russell completes its latest ranking of UK-listed companies by market capitalisation. The anticipated demotion follows a sustained decline in Entain’s valuation. Its shares currently trade at around 530p, approximately 42% below their 52-week high of 916p. On a year-to-date basis the share price decline is closer to 30%, with the stock having ended 2025 at approximately 767p. Investor sentiment towards Entain reflects wider concerns surrounding UK and European gambling PLCs, as operators contend with higher taxes across core markets. Investors have subsequently placed a higher demand on cost controls, savings and profitability. In the UK, Remote Gaming Duty increased from 21% to 40% in April, to be followed by a rise in General Betting Duty from 15% to 25% next April. Operators have also faced tougher tax and regulatory conditions in markets including the Netherlands, France and Germany. Entain nevertheless outperformed market expectations in its H1 trading. Group net gaming revenue from continuing operations increased by 7% to £2.55bn, equivalent to growth of 5% on a constant-currency basis. Reported revenue rose by 7% to £2.51bn. The period included strong engagement during the FIFA World Cup across Entain’s UK and Irish brands, whilst Australia and Spain delivered above-guidance growth. UK and Ireland online NGR increased by 13% at constant currency, with Australia also up 13% and Spain rising by 28%. However, topline growth did not translate into higher underlying earnings. Group underlying EBITDA declined by 2% to £479.3m, while underlying operating profit fell by 10% to £318m, from £352. Entain said the benefit of its NGR outperformance was more than offset by a tripling in tax exposure which hit accounts with £90m in tax receipts during the interim period. Can Entain keep analysts’ faith? Despite the earnings decline, the results were received positively as underlying EBITDA exceeded analysts’ expectations of approximately £455m. Despite mounting fiscal headwinds, the H1 performance was positively welcomed by analysts. Investors have confidence that Entain is building a more resilient growth under Chief Executive Officer Stella David to return its business to long-term growth. Leadership has maintained its FY2026 guidance. Entain continues to target online NGR growth of 5–7% at constant currency and group underlying EBITDA of between £910m and £960m, excluding BetMGM parent fees. It expects an online EBITDA margin of 21–22% and aims to mitigate approximately 25% of the effect of the increased UK online gambling tax during 2026. The year represents an important test for Entain’s recovery, following statutory losses of £681m in 2025 and £461m in 2024. The 2025 deficit was heavily influenced by a £488m impairment charge connected to the increase in UK gambling taxes. The company’s FTSE 100 status had been in question following the HMRC settlement of and Crown Prosecution Settlement (CPS) of £615 settlement relating to historical conduct in GVC Holdings’ former Turkish-facing business. Entain has been a fixture of the FTSE 100 since June 2020, when the company operated under the GVC Holdings domain. Its development into a blue-chip gambling group followed GVC’s approximately £4bn acquisition of Ladbrokes Coral in 2018 — a deal that helped trigger a new cycle of M&A across the global gambling sector. Beyond gambling, uncertainty weighs on the LSE and all global markets due to the continued fallout of geographic conflicts, trade tariffs, inflation and bond-market volatility as liabilities facing all business segments.