Flutter Entertainment is canceling its signature live poker tournament in Sochi and essentially wiping out its earnings in Russia and Ukraine for 2022, chief executive Peter Jackson confirmed.
boss Paddy Power has canceled the six-day PokerStars European Poker Tour festival, scheduled to start on March 23, due to Russia’s invasion of Ukraine last week.
The company is now predicting that most of the £60m it makes from the two countries in 2021 will effectively be lost from this year’s profits.
“We expect very little from Ukraine at this point,” Mr Jackson told a media call after the group’s results on Tuesday.
“Actually, the income from this area will practically go nowhere for the rest of the year.”
The proceeds from Russia and Ukraine represent about 6 percent of the total profits of the multinational corporation, one of the leading gambling companies in the world.
The Canceled Tournament is a live stream where Flutter runs a series of online qualifying tournaments through its PokerStars brand.
The company employs 80 contractors in Ukraine and has Mr. Jackson said two employees directly in Russia.
“Our immediate priority is our colleagues in the vicinity. We are doing everything we can to support them.”
Flutter’s share price plummeted after earnings disappointed investors as the impact of safer gambling measures in the UK and Ireland on its business.
Profit for 2021 is below consensus forecast at just over 1 billion euros and on lower corporate guidance, sending shares down nearly 12.4pc in Dublin amid fresh bad news about business in Russia and Ukraine.
Analysts have revised their expectations downward, noting that regulatory trends are blowing heavily on strong performance in the US and Australian bull markets.
Goodbody slashed its earnings forecast by 7pc, citing safe gambling rules in Flutter’s main UK market and an upcoming Gambling Act Review, which is expected to affect online revenue.
House broker Davy is less concerned about challenges in the UK and is optimistic about growth in the US, which is deregulation of online gambling state by state.
“Flutter’s repeated guidance shows its dominant position and economics in its most important market,” said analyst Michael Mitchell.
“Benefits from a number of competitive advantages and scale, it has the potential to reach US profitability on an economic basis and faster.”
Mr. Jackson said Flutter already has a 40% share of the online gambling market in the US and will be profitable there next year. He added that the company still expects further growth in the UK from “entertainment-focused players”.
Flutter says it gets 55 per cent less revenue from ‘higher value’ customers than it did in 2019, estimating it took in £90m last year by implementing measures Safer gambling.
Mr. Jackson says betting shops remain an important part of Flutter’s brand personality in the UK and Ireland.
