Flutter and Entain have warned that Brazil’s decision to prohibit online gambling could affect their full-year results, with both operators revising expectations following the measure introduced by President Luiz Inacio Lula da Silva.
The provisional ban must receive congressional approval within 120 days to become permanent. The measure was introduced as Brazil seeks to address rising levels of gambling addiction in the country.
Entain, the London-listed owner of Ladbrokes and Sportingbet, lowered its full-year online net gaming revenue outlook to growth of between 4% and 6% following the decision. The company also expects underlying earnings to come in at the lower end of its previous guidance range of £910 million ($1,203.8 million) to £960 million ($1,270 million).
Brazil had been expected to generate about 5% of Entain’s total online net gaming revenues this year. However, the company said the country’s contribution to earnings was forecast to be “modest” because of the “challenging and highly competitive operating environment” in the market.
Entain said it would comply with the provisional measure but described itself as “disappointed” by an announcement that it said was made “without consultation of industry stakeholders regarding its significant adverse consequences”.
The market reaction extended to Entain’s shares, which fell 4% in Monday afternoon trading on the FTSE 250.
Flutter, the New York-listed owner of Paddy Power and Betfair, estimated that a shutdown of its Brazilian operations for the remainder of 2026 would reduce full-year revenue by about $70 million and underlying earnings by approximately $20 million.
The company said it was “extremely disappointed” with the ban and was “reviewing all available options, including the potential to appeal”. It added: “Flutter continues to engage constructively with the Brazilian authorities on sensible, effective regulation to protect customers from the risks of the unregulated market.”
Flutter also disclosed the carrying value associated with its Brazilian business. This largely comprises $539 million in goodwill, $127 million in online customer relationships, $124 million in trademarks and $31 million related to computer software and technology.
The restrictions follow Lula’s decision on Friday to sign an order that “prohibits all sports betting and online casinos”, creating an additional challenge for gambling operators already facing higher taxation in the UK.
Earlier this month, Entain disclosed plans to cut around 400 jobs worldwide, citing increased gambling taxes. The company also warned that further positions could be at risk amid speculation that the Chancellor is considering doubling machine games duty in the Budget.