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Malaysian gambling crackdown continues to weigh on Playtech

A crackdown on gambling by Malaysian prime minister Najib Razak is continuing to hurt technology company Playtech - REUTERS
A crackdown on gambling by Malaysian prime minister Najib Razak is continuing to hurt technology company Playtech - REUTERS

A regulatory crackdown against online gambling in Malaysia has continued to weigh on technology provider Playtech, following its profit warning less than three months ago. 

The Isle of Man-based company, founded by billionaire Teddy Sagi, said customer numbers had not recovered in the Asian nation, where leaders last year announced a major clampdown on gambling companies operating there.

The move forced Playtech to issue a profit warning in November. Now the company says it has almost no business in Malaysia in spite of the country making up 5pc of revenues in 2016.

This news prompted shares to fall as much as 13pc, taking them back towards the low the stock hit on November’s profit warning, although they later pared losses to end the day 2.9pc lower. 

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Profit margins were also squeezed as its consumer facing division, which includes Sun Bingo, became a larger part of the group.

Playtech said it was in discussions with News UK, the owner of The Sun, about the problematic bingo proposition which has seen the technology company having to spend more money than planned on developing the game and attracting customers.