Brazil’s digital betting ban could cost Irish gambling giant Flutter Entertainment more than €60 million in lost revenue, the group predicted on Monday.
President Luiz Inácio Lula da Silva banned online sports betting and casinos at the weekend in a provisional order likely to require the approval of Brazil’s congress to stay in place.
Flutter calculates that the ban could cost it $70 million (€61.5 million) in lost revenue and around $20 million in earnings should it remain for the rest of the year.
The group, owner of Paddy Power and Betfair, stopped offering sports betting and digital gaming in Brazil once the president announced the ban.
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Flutter shares fell more than 4 per cent at the open in New York. The stock is down 71 per cent over the past year.
“Flutter is extremely disappointed by this development and is reviewing all available options, including the potential to appeal,” said the company.
The group continues to “engage constructively with the Brazilian authorities” on effective regulation, according to its statement.
Lula’s executive order is likely to require congressional approval or amendment within 120 days to remain in place, according to Flutter.
“Should congress reject this measure, we would expect our online sports betting and igaming activity to recommence,” said the group.
New York-listed Flutter has operations in 80 different countries, including Ireland, Britain, the US and Australia.
This month it announced that Irish bookmaker Paddy Power could close up to 100 shops across Ireland and Britain by the year’s end.
The group is grappling with increased competition and stricter regulation across several markets. It lost €256 million in the three months to June 30th.
Chief executive Peter Jackson will step down this week in favour of Dan Taylor, head of its international business.
Brazil legalised online betting in 2018 but it has since been blamed for income loss caused by addiction.
Lula’s ban comes just days before an election that pits the left-wing president against Liberal Party candidate, Flávio Bolsonaro, son of jailed former leader, Jair Bolsonaro.
Opinion polls have the pair neck-and-neck ahead of the first round of voting.
Bolsonaro dismissed the ban as political while Brazilian football clubs warned that it could cost them sponsorship income.
Punters have a week to withdraw funds from online betting accounts while the bank blocks anyone from making new deposits
Meanwhile, Flutter rival Entain, owner of Ladbrokes, Coral and Sportingbet, also said the Brazilian ban would hit its earnings.
The London-listed company told markets on Monday that its earnings would be at the “lower end” of its existing prediction that 2026 earnings would be between £910 million (€1.06 billion) and £960 million.
Entain expected Brazil to contribute 5 per cent of online net gaming revenue, although it believed earnings from this would be modest because of the country’s “challenging and highly competitive operating environment”.
