Stars Group Points to Potential Problems in Russian Market

In its 2017 earnings report, the Stars Group pointed to possible new regulations in the Russian market as potentially troublesome. The company—owners of PokerStars—expects that new online gaming rules in Russia could impact its ability to process payments from gamblers. The new rules, expected to go into effect in May, would mean Russian banks will no longer be able to do business with foreign payment processors or gambling operators who have been blacklisted by the government.

Stars Group Points to Potential Problems in Russian Market

Stars Group is predicting a difficult year in the Russian market as new rules regarding payment processing go into effect there.

In its 2017 earnings report, the company said the new rules, scheduled to go into effect in May, will make it difficult to process payments from Russian gamblers. Though Russia has not said exactly how it will enforce the rules, they could mean Russian banks will no longer be able to do business with foreign payment processors or gambling operators who have been blacklisted by the government.

Stars Group CEO Rafi Ashkenazi told analysts that his team has contingency plans to deal with Russia’s actions, according to a report at casino.org.

“We have plan As and plan Bs and plan Cs for every type of scenario that may happen in the market,” Ashkenazi said. “We are monitoring, we are assessing, and we are ready.”

Stars Group considers Russia a grey market with no regulatory or legal guidelines available for offshore online gambling sites. Russia, however, has been steadily reforming its online gambling rules and has begun issuing licenses for sports betting.

The report also showed solid earnings for Stars Group in 2017. Total annual revenue was up 13.6 percent for fiscal 2017, at more than $1.3 billion. Other earnings figures were also up, with net earnings rising by more than 25 percent.

That growth, however, slowed in the fourth quarter of 2017 and Stars Group projected that the trend would continue in 2018. The company is predicting just a six to 12 percent growth rate in revenues when compared to the previous year. Earnings per share also came up just a bit short of analysts’ estimates, returning $0.54 per share, rather than the predicted $0.57, the casino.org report said.

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