Shares in the owner of Ladbrokes crashed to a six-year low after it warned earnings would be hit following Brazil’s online gambling ban.

FTSE 250 firm Entain said it was ‘disappointed’ with the decision as the country tries to clamp down on surging levels of gambling addiction.

New York-listed Flutter, which owns Paddy Power and Betfair, also said it was ‘extremely disappointed by this development’ and may appeal.

Shares in Entain fell 5.1 per cent, or 22.7p, to 426.9p – their lowest level since March 2020 when bookies were closed following the outbreak of Covid-19.

The firm said it would comply with the provisional ban, which must secure congressional approval within 120 days to become permanent.

Entain downgraded its full-year online net gaming revenues outlook to between 4 per cent and 6 per cent as a consequence, and said underlying earnings were expected at the lower end of its guidance of between £910million and £960million.

Brazil was expected to account for around 5 per cent of its total online net gaming revenues this year, though it said the earnings contribution was forecast to be 'modest' because of the 'challenging and highly competitive operating environment' in the country.

Earlier this month, Entain revealed around 400 jobs were being cut worldwide as it blamed increased gambling taxes and warned more could be at risk amid speculation the Chancellor is planning to double machine games duty in the Budget.

The group, which also owns brands including Coral, said it had launched a consultation that could see a fifth of its 2,000-strong customer care jobs go across 11 countries, including the UK, as part of ongoing efforts to 'address the impact of the UK's increased gambling taxes'.

It did not reveal how many jobs would go in the UK as part of the consultation, which is set to end by November.