Flutter and Entain have expressed concerns that Brazil's recent ban on online gambling may significantly influence their annual financial performance. This warning comes after President Luiz Inacio Lula da Silva introduced the provisional ban, which will require congressional approval within 120 days to become permanent.
The ban aims to tackle the increasing issue of gambling addiction in Brazil. Following this announcement, Entain, which owns brands like Ladbrokes and Sportingbet, has revised its expectations for online net gaming revenue growth, now forecasting an increase of only 4% to 6%. Additionally, the company anticipates that its underlying earnings will fall at the lower end of its previous guidance of £910 million ($1.2 billion) to £960 million ($1.27 billion).
Previously, Brazil was expected to contribute approximately 5% to Entain's total online net gaming revenues this year. However, the company indicated that the earnings from Brazil would be “modest” due to the “challenging and highly competitive operating environment” present in the market.
Entain has stated that it will adhere to the provisional ban but expressed disappointment over the lack of consultation with industry stakeholders regarding the potential negative impacts of this decision. This sentiment was reflected in the stock market, with Entain's shares dropping by 4% during Monday's afternoon trading on the FTSE 250.
Flutter, which operates brands like Paddy Power and Betfair, estimated that halting its Brazilian operations for the rest of 2026 could lead to a revenue decrease of around $70 million and a drop in underlying earnings of approximately $20 million. The company expressed its deep disappointment with the ban and is currently exploring all possible avenues, including the option to appeal. Flutter emphasized its commitment to working with Brazilian authorities to establish sensible regulations that protect consumers from the risks associated with unregulated markets.
Furthermore, Flutter revealed the carrying value of its Brazilian operations, which includes $539 million in goodwill, $127 million in online customer relationships, $124 million in trademarks, and $31 million related to software and technology.
The restrictions follow Lula’s recent order that prohibits all forms of sports betting and online casinos, posing additional challenges for gambling operators already facing increased taxation in the UK. Earlier this month, Entain announced plans to cut around 400 jobs globally due to rising gambling taxes, with concerns that further job cuts may be necessary if the Chancellor decides to double the machine games duty in the upcoming budget.