Playtech issued a warning that it expects its profits for the year to be at the low end of projections as it deals with a crackdown on online gambling in Malaysia.
Management at the Isle of Man-based business said it expected annual profits to be 5 percent lower than the bottom end of market expectations, prompting analysts to wipe about €20m (£17.8m) off their full-year earnings forecasts and sending Playtech shares down about 20 percent, reported the UK’s Daily Telegraph newspaper.
The company is seen by analysts as having a problem in the unregulated market of Malaysia, where the government is moving to block its citizens from accessing gambling sites. The government is also considering banning all online gambling.
Malaysian Deputy Prime Minister Ahmad Zahid Hamidi is quoted as saying that the government hasn’t decided on whether the change of the law will be in the form of an amendment or if the Parliament will craft a new preventive law that will specifically target online gambling activities, the Telegraph said.
Some analysts told the newspaper that as much as five percent of Playtech’s revenue could come from the Malaysian market.
Also, the company’s contract with Sun Bingo, which involves Playtech providing the technology for the game, has continued to cause problems for the company.
Playtech chief executive Mor Weizer has said the company has been forced to spend more money than projected to attract customers to the bingo site. In its update this week, the company said the contract “remains challenging” partly due to the re-launch of the new Sun Bingo site.
