After crashing another 15% today is this FTSE blue-chip now the best share to buy today?

In my view, the best share to buy is often the one that has taken the biggest beating, as it has the greatest comeback potential.

So my ears pricked up at news that the Entain (LSE: ENT) share price has just (14 October) plunged 15% following reports that Chancellor Rachel Reeves is planning a £3bn tax raid on the gambling industry in her autumn Budget. 

The international sports betting specialist is today’s biggest FTSE 100 faller by far and I’m wondering if this is a buying opportunity for me.

Entain shares were starting to recover

I’ve had the stock on my radar for some time, because I felt it was being unfairly overlooked by investors.

Entain, whose brands include Ladbrokes, Coral, Sportingbet, PartyCasino and PartyPoker, has been a losing bet lately, falling 18.97% over 12 months. It’s paying the price for an acquisition spree by former CEO Jette Nygaard-Andersen, which has yet to reap dividends. A bribery investigation into its former Turkish business cast a further shadow (as did the £585m settlement with the Crown Prosecution Service).

I was hoping things would start to pick up with industry veteran Gavin Isaacs taking the helm from 2 September. Luck was on his side as an update published seven days later showed second-half online net gaming revenues (NGRs) were beating expectations.

This followed a positive first half, with NGR jumping 8% to £2.6bn, helped by stronger-than-expected win margins during the Euros.

I was a whisker away from buying Entain to tap into its huge potential via its 50:50 US joint venture with MGM Resorts International, known as BetMGM.

Yet I was also uneasy. The gambling industry will always be controversial and faces constant regulatory pressure. Its ads can be pretty in-your-face, and we know how addictive gambling can be. This makes it an easy target for a Chancellor in need of some cash.

Enter Rachel Reeves. She’s rumoured to be doubling some of the taxes levied on online casinos and bookmakers on 30 October. There are a lot of wild Budget rumours flying around at the moment, so I’ve no idea whether that’s going to happen.

FTSE 100 buying opportunity

It’s a blow for Entain shareholders because the stock had jumped 15% over the last month, but an opportunity too, as the long-term picture looks positive to me.

BetMGM’s quarterly revenues are steadily rising with further growth expected in the second half of the year.

Entain still has plenty of challenges, aside from the regulators. Net debt climbed from £2.75bn in 2022 to £3.29bn last year. Although it still had available cash of £1.3bn on 30 June.

Unfortunately, the shares aren’t in bargain territory, trailing at 17.39 times earnings. A price-to-sales ratio of exactly 1 suggests the stock is fairly valued, with investors paying £1 for each £1 of sales the company makes. The yield’s a modest 2.51%. So not quite the unmissable bargain I hoped.

Speculation about the gambling tax hike will no doubt swirl until the Budget, so buying Entain shares today is a bit of a punt. I think I’ll wait. But I’ll be watching them like a hawk.