Betting firms Flutter and Entain warn of hit from Brazil's online betting ban

Sept 28 (Reuters) - Betting firms Flutter Entertainment and Entain warned on Monday that Brazil's ban on online sports betting and gaming could dent their annual results if upheld, piling pressure on an industry already squeezed by high costs and regulatory scrutiny.

The ban adds to a bruising stretch for the betting industry and strikes at one of the industry's most coveted growth markets. Brazil only fully regulated online betting in January 2025 but rapidly became a prized destination for global operators.

"Flutter is extremely disappointed by this development and is reviewing all available options, including the potential to appeal," the FanDuel owner said in a statement, with Ladbrokes owner Entain echoing the sentiment.

Shares of US-listed Flutter were up 1.1% in premarket trading, while Entain was down 4.2% at 1224 GMT.

"As Brazil was still in investment mode, the profit impacts are relatively modest; however, it does potentially remove a region with attractive long-term growth prospects," Davy analyst Paul Ruddy said.

Brazil's provisional measure revokes online betting licences and requires congressional approval within 120 days to remain in force.

FIRMS TALLY UP BRAZIL EXPOSURE

Entain had expected Brazil to represent about 5% of its online net gaming revenue in 2026, while the country only accounted for 1% of Flutter's total revenue at the end of 2025.

However, the ban could result in a $70 million reduction to Flutter's 2026 revenue, with a $20 million hit to its adjusted core profit, the company said.

Entain said it expects 4-6% online NGR growth for 2026 if the ban is upheld. Excluding Brazil, the growth target would remain at the top end of its 5%-7% guidance range on a constant currency basis. It also forecast underlying core profit at the lower end of its previously guided £910 million to £960 million ($1.2 billion to $1.3 billion) range, as Brazil's earnings contribution is expected to be modest.

Swiss lottery and betting group Allwyn AG scrapped its annual profit margin guidance following the betting ban. Analysts at Peel Hunt forecast a marginal impact on Playtech's 2026 earnings.

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(Reporting by Anushka Chourasia and Yamini Kalia in Bengaluru; Editing by Nivedita Bhattacharjee, Rashmi Aich, Emelia Sithole-Matarise and Andrea Ricci )