Brazil's Gambling Ban Shakes Industry: Entain's Forecasts and Expert Reactions

President Lula da Silva abruptly decided to ban online gambling in Brazil, catching many by surprise. Entain has reduced its outlook towards the lower end of its guidance due to the decision. Experts believe the measure has slim chances of becoming permanent. Trade groups have called on the Supreme Court to intervene.

The measure applies with immediate effect, meaning that companies have not been able to accept new depositors since last week. There has been a 141% increase in new and unregulated gambling websites following the announcement of Provisional Measure 1,394. Entain's net gaming revenue outlook is between 4% and 6%, and underlying earnings are at the lower end of the guidance between £910m and £960m.

Entain is cutting 400 jobs across its Customer Care roles and may have further reductions. DigiPlus, a company that bet big on Brazil’s nascent iGaming market, has kept a hopeful outlook. Regulus Partners estimates the chance of the measure remaining in place is only 5%.