PokerStars revenue plunged by more than 96% in the island according to the latest third quarter financial performance figures from parent company The Stars Group.

It appears the island has lost out to the rival offshore gaming jurisdiction of Malta.

While group revenue as a whole increased 8.8% to 622.4 million dollars (nearly £500m) there’s been a huge fall in the island where PokerStars has a base at King Edward Road, Onchan Head, and a smaller office in Douglas.

According to the statistics Isle of Man revenue in the three months to the end of September was 3.4 million dollars (£2.7m) compared to 93.5 million dollars (£73.2m) in the same period last year. That’s a fall of more than 96%.

The Stars Group three month figures also revealed that poker revenues were down while gaming and betting revenues had risen.

It appears the migration of the ’dotcom’ licence from the Isle of Man to Malta may be a significant factor in the decline in returns for the island company where more than 400 people are employed.

Malta’s revenue has risen by more than 27% in the same three months period.

Castletown based gambling analyst Warwick Bartlett speculated on possible reasons why the island has lost out to Malta.

He said the Mediterranean island is an EU member state, unlike the Isle of Man, and that enables, under the Treaty of Rome, for access to other member states. And this included some member states that don’t have e-gaming legislation including Germany and the Netherlands.

Also he said Malta ’insists’ that every company that trades there has a back office team of people and does not operate as a ’brass plate’ firm.

And he said Malta appeared to have more people on the ground who have the experience in this field to fill vacancies.

The figures come hard on the heels of the news in September, revealed by Isle of Man Newspapers, that PokerStars had told staff that it would be making redundancies in the island, citing ’headwinds over the last year, including disruptions in our key markets’.

It is understood that 80 people in the Isle of Man were given notice that their jobs were potentially at risk.

Stars Group replied to Business News after we asked why there appeared to have been such a dramatic drop in revenue for the Isle of Man side of the business.

A spokesman said the latest financial statement regarding the Isle of Man ’reflects the revenue attributable to each gaming licence or approval, as opposed to the jurisdiction where the customer was located.

’As a normal course of business, we work closely with multiple regulators and governments around the world to offer our products in a safe and fair manner consistent with our regulatory requirements and operate efficiently with a focus on optimising player experience and customer service.

’The Stars Group has recently taken the decision to migrate the B2C (business to customer) business offered pursuant to its Isle of Man gaming licence (.com) to the Maltese licensing structure (.eu).’

But he stressed: ’The Isle of Man office will remain an important operational hub for The Stars Group’s central and shared services teams. With respect to a decline in poker revenue, and growth in gaming revenue - we offer a wide range of products and services to our customers, and changes in business mix over time reflect multiple factors, including the range of products and the popularity of such products.’

Mr Bartlett, director of the Gambling Betting and Gaming Consultants, said the huge drop in revenue should be a cause for concern for the island.

He said: ’From the information published in the accounts and the migration of business to the Maltese, I believe this will create a loss of gambling tax revenue for the Isle of Man Government. It reflects a trend that started some two to three years ago of Malta becoming a favoured jurisdiction for online gambling companies.

The Isle of Man lost Paddy Power’s online gaming business when the Irish betting giant moved it to Malta a few years ago.

The third quarter figures also reveal that revenue in Australia went up by 36.4% while in the UK it was 35%.

Rafi Ashkenazi, chief executive of The Stars Group, touches upon this in his introduction to the results.

He said: ’Our third quarter results were robust and in line with our expectations, supported by strong revenue growth in our United Kingdom and Australia segments, which helped offset both the ongoing disruption in certain of our lower-priority international markets and continued foreign exchange headwinds across the business.’

He refers to the USA where British gambling companies have been scrambling for business after the rules were relaxed in certain states last year.

Mr Ashkenazi said: ’We have also made rapid progress in the U.S. following our landmark FOX Sports deal in May, with the launch of our FOX Bet products at the start of the professional football season in New Jersey and Pennsylvania, and some very encouraging early signs from our FOX Sports Super 6 nationwide free-to-play games.’

Mr Ashkenazi also mentions the planned mega merger with Flutter, the parent company of Paddy Power. He said the link up would create ’a global leader in online betting and gaming, and we are working diligently to bring the proposed combination to closing’.

The Stars Group is expected to own approximately 45.36% of the share capital.

’We remain highly focused on our key strategic priorities of integration, execution and debt reduction.’

He added: ’Not only have we largely completed the integration of Sky Betting & Gaming, but we currently expect to exit 2019 with a run-rate of the full $100 million of expected cost synergies and are beginning to execute on our plans for revenue upside through Sky Bet in Italy and Germany and our developing UK ecosystem. The merger with Flutter is set to be completed in the second or third quarter of next year.