PokerStars Owner Cuts Isle of Man Jobs as Poker Vertical Decreases – Casino News Daily
Online gambling giant The Stars Group is set to cut jobs at its PokerStars headquarters in the Isle of man, citing regulatory headwinds faced by its online poker business over the past year as the reason for its decision.
The company said earlier this week that despite its decision to reduce its Isle of Man workforce, the island will remain “a critical operational hub.”
Local news outlet IOMToday this week reported that The Stars Group has informed its Isle of Man employees that there would be redundancies and that 80 people have been given notice that their job is at risk. It was also understood that 10 staff members are expected to be sacked by the end of the year and others will follow over the next 18 to 24 months.
PokerStars, the online poker division of The Stars Group, employs around 450 people at two locations in the Isle of Man – its headquarters at Onchan Head and an office in the capital Douglas.
PokerStars moved to the Isle of Man back in 2005 when it employed just five people. The poker operator set up its headquarters in Douglas Bay Complex at Onchan Head and then bought the building in 2012.
The PokerStars brand boasts presence across multiple jurisdictions, but the past year has served multiple regulatory challenges to the major online poker brand.
Many Headwinds in Key Markets
Following initial reports about The Stars Group potentially cutting its Isle of Man workforce, the company issued a statement to confirm those and provide reasons to justify its decision.
The company said that its “international segment (PokerStars) has faced many headwinds over the last year, including disruptions in some of our key markets.” The statement read further that they are now pursuing “operational initiatives, including cost-optimisation opportunities, as we’ve done in the past to reassess our fixed cost base and realign our costs with our global growth strategy.”
The Stars Group noted that they believe the proposed job redundancies on the Isle of Man “are a component of our overall plans to position us to deliver our mid-term growth targets and long-term sustainable growth.”
The Stars Group’s poker revenue dropped 11.7% year-on-year in the second quarter of the year and 12.4% in the six months to June 30, 2019. The company’s latest quarterly report also showed that poker was replaced by sports betting as its largest product vertical. Wagering revenue accounted for 36% of the group’s consolidated revenues, while poker accounted for 30%. In the second quarter of 2018, poker revenue represent 53% of the group’s overall revenue for the period.
Of the performance of its poker product, The Stars Group said in its latest financial report that the revenue decrease was due to
“adverse foreign exchange fluctuations and continued disruptions and regulatory headwinds in certain markets, including reduced deposits by customers as a result of local restrictions on some methods of payment processing and on certain methods of downloading The Stars Group’s poker applications, which was partially offset by continued organic growth in most other markets.”
Some of the headwinds PokerStars had to face this past year included payment processing restrictions in Russia and Norway, and the brand’s exit from Switzerland and Slovakia.
The Stars Group said that apart from the personal impact on the individuals that are set to lose their jobs at the company, the pending redundancies at its two Isle of Man offices “will have little forseeable impact on our overall operations” in the island.
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Source: casinonewsdaily.com