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12.08.2019 – 13:34

The Stars Group

The Stars Group Reports Second Quarter 2019 Results; Updates 2019 Full Year Guidance; Appoints New Independent Director

Toronto (ots/PRNewswire)

The Stars Group Inc. (NASDAQ: TSG) (TSX: TSGI) today reported its financial results for the second quarter ended June 30, 2019, provided updated 2019 full year guidance ranges, announced the appointment of an additional independent director to its Board of Directors, and provided certain additional highlights and updates. Unless otherwise noted, all dollar ($) amounts are in U.S. dollars.

"The second quarter underpinned the success of last year's acquisitions, particularly with the record performance of Sky Betting & Gaming and our increasing product and geographic diversification, as we continue to transform and position the business to execute on our strategy for strong, sustainable future growth," said Rafi Ashkenazi, The Stars Group's Chief Executive Officer.

"2019 has been and remains a year of integration, execution and debt reduction," said Mr. Ashkenazi. "We are committed to those key strategic priorities for the rest of the year while we also build our foundation and momentum to become a market leader in the U.S. We are confident that the actions we have taken over the last year, and are pursuing now, including to reassess our fixed cost base, put us in a strong position to deliver our mid-term growth targets from the end of 2019," concluded Mr. Ashkenazi.

Second Quarter
2019 Summary  
Consolidated  
                Three     Six      
                Months    Months   
                Ended     Ended    
                June      June 30, 
                30,                
In thousands    2019      2018        %         2019           2018  % Change
of U.S.                               Change                                 
Dollars(except                                                               
percentages                                                                  
and per share                                                                
amounts)                                                                     
Total revenue   637,618   411,512     54.9    %      1,218,002       804,403     51.4   %
Gross profit    463,708   327,875     41.4    %      881,456         640,502     37.6   %
(excluding                                                                               
depreciation                                                                             
and                                                                                      
amortization)                                                                            
Operating       93,955    1,064       8,730.4 %      155,492         114,931     35.3   %
income                                                                                   
Net earnings    4,629     (154,824)   103.0   %      32,287          (80,463)    140.1  %
(loss)                                                                                   
Adjusted Net    137,469   131,023     4.9     %      243,069         269,785     (9.9)  %
Earnings ¹                                                                               
Adjusted        236,734   168,271     40.7    %      432,089         343,293     25.9   %
EBITDA ¹                                                                                 
Adjusted        37.1    % 40.9      % (9.3)   %      35.5      %     42.7     %  (16.9) %
EBITDA Margin                                                                            
¹                                                                                        
Diluted         0.02      (1.01)      101.7   %      0.12            (0.52)      122.6  %
earnings                                                                                 
(loss) per                                                                               
Common Share                                                                             
($/Share)                                                                                
Adjusted        0.48      0.60        (19.4)  %      0.87            1.27        (31.6) %
Diluted Net                                                                              
Earnings per                                                                             
Share                                                                                    
($/Share) ¹                                                                              
Net cash        173,208   164,011     5.6     %      283,593         296,080     (4.2)  %
inflows from                                                                             
operating                                                                                
activities                                                                               
Free Cash Flow  84,820    84,856      -       %      47,307          167,115     (71.7) %
¹                                                                                         
As at        June 30,   December   %     
             2019       31, 2018   Change
Long-term    5,195,398  5,666,075  (8.3)  %
debt -                                     
principal                                  
Long-term    5,088,915  5,446,958  (6.6)  %
debt -                                     
carrying                                   
value                                      
Cash -       339,239    392,853    (13.6) %
operational                                 

_____________________________

1 Non-IFRS measure. For important information on The Stars Group's non-IFRS measures, see below under "Non-IFRS Measures" and the tables under "Reconciliation of Non-IFRS Measures to Nearest IFRS Measures".

- Revenue - Revenue for the quarter increased primarily as a result 
  of the contribution from Sky Betting & Gaming, which The Stars 
  Group acquired in July 2018. During the quarter, online sports 
  betting was The Stars Group's largest product vertical (36% versus 
  20% in 2018), followed by online casino (31% versus 25% in 2018) 
  and online poker (30% versus 53% in 2018), while 79% of 
  consolidated revenues were derived from locally regulated or taxed 
  markets (61% in 2018). Additional segment specific factors 
  impacting revenue are described below. 
- Debt and Cash - During the quarter, The Stars Group prepaid $250 
  million outstanding on its USD first lien term loan, and ended the 
  quarter with approximately $339.2 million in operational cash and 
  $5.1 billion of debt on its balance sheet, resulting in Net Debt of
  $4.7 billion. 
- FOX Bet - In May, The Stars Group and FOX Sports announced plans to
  launch FOX Bet, the first-of-its kind national media and sports 
  wagering partnership in the United States. In addition to a 
  commercial agreement of up to 25 years and associated product 
  launches, including real-money and free-to-play games, FOX also 
  acquired 4.99% of The Stars Group's then-issued and outstanding 
  common shares for aggregate proceeds of $236.0 million. FOX Bet 
  currently remains on track to launch in applicable states prior to 
  the start of the NFL season. 
- U.S. Market Access Update - In July, The Stars Group announced 
  agreements with Penn National Gaming and the Akwesasne Mohawk 
  Casino Resort in New York, providing market access for online 
  betting and gaming in up to ten states and extending The Stars 
  Group's aggregate market access to up to 20 states, subject to 
  license availability, state law and regulatory approvals. 
- Appointment of Independent Director - The Board appointed John 
  Schappert, effective August 12, 2019, as a new independent director
  and member of the Board's Compensation and Technology Committees. 
  Mr. Schappert, 49, has served as the Chairman and Chief Executive 
  Officer of Shiver Entertainment, a private company that develops 
  video game software for consoles (PlayStation 4, Xbox One, Nintendo
  Switch), PC, and mobile phones and tablets, since 2012. Mr. 
  Schappert also currently serves as the Chairman of Motorsport 
  Games, a private company that develops and publishes video games, 
  and Pipeworks Studios, a private company that develops video games 
  and software, since 2019 and 2018, respectively. Prior to this, Mr.
  Schappert served as the Chief Operating Officer for Zynga Inc. 
  (Nasdaq: ZNGA) from 2011 to 2012 and served on its board of 
  directors during that time. Mr. Schappert also previously served as
  the Chief Operating Officer for Electronic Arts Inc. (Nasdaq: EA) 
  from 2009 to 2011, and was Corporate Vice President of Microsoft 
  Corporation's (Nasdaq: MSFT) Interactive Entertainment Business 
  unit from 2007 to 2009. From 1998 until 2007, Mr. Schappert held 
  several positions for various divisions of EA, including Vice 
  President and General Manager of Electronic Arts Tiburon from 1998 
  until 2002, Senior Vice President and Group General Manager of 
  Electronic Arts Canada from 2002 until 2006, and Executive Vice 
  President and Chief Operating Officer of Worldwide Studios from 
  2006 until 2007. Mr. Schappert founded Tiburon Entertainment, the 
  developer of the Madden NFL video game franchise, in 1994 and 
  served as President and Chief Executive Officer until 1998, when it
  was acquired by EA. From 1991 until 1994, Mr. Schappert was a 
  software engineer and game developer for Visual Concepts. Mr. 
  Schappert earned an Associates of Arts degree from Miami Dade 
  Community College in Miami, Florida. 
- Technology Committee of the Board - On August 8, 2019, the Board 
  established a standing Technology Committee of independent 
  directors, which will have certain oversight and monitoring 
  responsibilities with respect to technology-related risks and the 
  overall role of technology in executing The Stars Group's business 
  strategy. The Technology Committee is currently comprised of Eugene
  Roman, John Schappert and Mary Turner, with Mr. Roman serving as 
  the chair. 

International

                Three           Six   
                Months          Months
                Ended           Ended 
                June            June  
                30,             30,   
In thousands    2019    2018    %        2019 2018            %     
of U.S.                         Change                        Change
Dollars                                                             
(except                                                             
otherwise                                                           
noted)                                                              
Stakes          249,276 248,572 0.3    %      524,535 471,557        11.2   %
Betting Net     7.3 %   7.9  %  (7.6)  %      7.3 %   7.7 %          (5.2)  %
Win Margin (%)                                                               
Revenue                                                                       
Poker           191,496 216,986 (11.7) %      405,645 462,856        (12.4) %
Poker Constant  201,830 216,986 (7.0)  %      436,686 462,856        (5.7)  %
Currency                                                                     
Revenue                                                                      
Gaming          104,300 101,941 2.3    %      203,208 208,651        (2.6)  %
Gaming          111,058 101,941 8.9    %      219,170 208,651        5.0    %
Constant                                                                     
Currency                                                                     
Revenue                                                                      
Betting         18,284  19,635  (6.9)  %      38,333  36,321         5.5    %
Betting         18,425  19,635  (6.2)  %      40,330  36,321         11.0   %
Constant                                                                     
Currency                                                                     
Revenue                                                                      
Other           7,792   11,673  (33.2) %      15,299  24,173         (36.7) %
Other Constant  10,126  11,673  (13.3) %      18,299  24,173         (24.3) %
Currency                                                                     
Revenue                                                                      
Total revenue   321,872 350,235 (8.1)  %      662,485 732,001        (9.5)  %
Constant        341,439 350,235 (2.5)  %      714,485 732,001        (2.4)  %
Currency                                                                     
Revenue                                                                      
QAUs            1.9     2.0     (4.9)  %                                     
(millions)                                                                   
QNY ($/QAU)     163     167     (2.4)  %                                     
Constant        172     167     2.9    %                                     
Currency                                                                     
Revenue QNY                                                                  
Gross profit    248,911 281,076 (11.4) %      509,353 585,922        (13.1) %
(excluding                                                                   
depreciation                                                                 
and                                                                          
amortization)                                                                
Gross profit    77.3 %  80.3 %  (3.7)  %      76.9 %  80.0 %         (3.9)  %
margin (%)                                                                   
General and     107,259 106,447 0.8    %      206,234 211,667        (2.6)  %
administrative                                                               
Sales and       36,863  42,255  (12.8) %      77,145  87,224         (11.6) %
marketing ¹                                                                  
Research and    9,287   8,358   11.1   %      15,889  16,177         (1.8)  %
development                                                                  
Operating       95,502  124,016 (23.0) %      210,085 270,854        (22.4) %
income                                                                       
Adjusted        143,223 164,467 (12.9) %      302,563 350,874        (13.8) %
EBITDA 2                                                                     
Adjusted        44.5 %  46.9 %  (5.1)  %      45.7 %  47.9 %         (4.6)  %
EBITDA Margin                                                                
(%) 2                                                                        
Net Deposits    307     322     (4.7)  %                                     
(millions)                                                                    

_____________________________

1 Sales and marketing includes $1.2 million and $2.7 million for the three and six months ended June 30, 2019, respectively, that the Corporation excluded from its consolidated results as it related to certain non-gaming related transactions with the United Kingdom segment.

2 Non-IFRS measure. For important information on The Stars Group's non-IFRS measures, see below under "Non-IFRS Measures" and the tables under "Reconciliation of Non-IFRS Measures to Nearest IFRS Measures".

- Poker - Poker revenue for the quarter decreased year-over-year 
  primarily as a result of 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. 
- Gaming - Gaming revenue for the quarter increased year-over-year 
  primarily as a result of organic growth in most markets, but was 
  adversely impacted by foreign exchange fluctuations. Organic growth
  from recently launched products, including "Spin of the Day" and 
  the continued roll-out of new casino games, more than offset the 
  impact of exited markets, notably Switzerland (gaming and betting) 
  and Slovakia (gaming, betting and poker) during the first quarter, 
  and regulatory disruptions in certain markets, including local 
  restrictions on some methods of payment processing. 
- Betting - Betting revenues for the quarter decreased year-over-year
  primarily as a result of a lower Betting Net Win Margin and adverse
  foreign exchange fluctuations. Stakes, however, were stable 
  year-over-year with underlying growth offset by the positive impact
  of the FIFA World Cup in the prior year period and adverse foreign 
  exchange fluctuations. 
- Customers - QAUs decreased primarily due to reduced activity in 
  certain markets and the closure of certain markets, each as noted 
  above. 
- International Senior Management Appointments - In July, The Stars 
  Group appointed Gino Appiotti as President of the International 
  segment, having previously served as its Managing Director of 
  Poker. Mr. Appiotti has served The Stars Group in various senior 
  capacities since 2011 and will report to Mr. Ashkenazi. In 
  addition, Severin Rasset was appointed Managing Director & 
  Commercial Officer of Poker, previously serving as Director of 
  Poker Innovation and Operations, and Asaf Noifeld was appointed 
  Managing Director of Casino, previously serving as Director of 
  Casino Product, Innovation and Operations, and succeeding Bo 
  Wanghammar, who will assume a new, broader strategic advisor role 
  to the International segment. 

United Kingdom

                Three      Six   
                Months     Months
                Ended      Ended 
                June 30,   June  
                           30,   
In thousands    2019       2018     %        2019  2018       %     
of U.S.                             Change                    Change
Dollars                                                             
(except                                                             
otherwise                                                           
noted)                                                              
Stakes          1,507,379  -               - %     3,012,351  -         - %
Betting Net     9.7 %      -      %        - %     7.3 %      -      %  - %
Win Margin (%)                                                             
Revenue                                                             
Poker           2,714      -               - %     6,004      -         - %
Gaming          92,591     -               - %     182,894    -         - %
Betting         146,443    -               - %     220,940    -         - %
Other ¹         11,128     -               - %     22,135     -         - %
Total revenue   252,876    -               - %     431,973    -         - %
QAUs            2.2        -               - %                         
(millions)                                                             
QNY ($/QAU)     112        -               - %                         
Gross profit    177,621    -               - %     299,146    -         - %
(excluding                                                                 
depreciation                                                               
and                                                                        
amortization)                                                              
Gross profit    70.2 %     -      %        - %     69.3 %     -      %  - %
margin (%)                                                                 
General and     108,488    -               - %     217,075    -         - %
administrative                                                             
Sales and       30,717     -               - %     65,311     -         - %
marketing                                                                  
Research and    3,535      -               - %     7,871      -         - %
development                                                                
Operating       34,881     -               - %     8,889      -         - %
income                                                                     
Adjusted        101,053    -               - %     143,272    -         - %
EBITDA 2                                                                   
Adjusted        40.0 %     -      %        - %     33.2 %     -      %  - %
EBITDA Margin                                                              
(%) 2                                                                       

____________________________

1 Other revenue includes $1.2 million and $2.7 million for the three and six months ended June 30, 2019, respectively, that the Corporation excluded from its consolidated results as it related to certain non-gaming related transactions with the International segment.

2 Non-IFRS measure. For important information on The Stars Group's non-IFRS measures, see below under "Non-IFRS Measures" and the tables under "Reconciliation of Non-IFRS Measures to Nearest IFRS Measures".

- Revenue - Revenue for the quarter, which on a local currency (Great
  Britain pound sterling) basis was a Sky Betting & Gaming record, 
  was primarily driven by strong growth in QAUs and Stakes, largely 
  as a result of the success of investments in promotional activity 
  in the first quarter, including during the Cheltenham Festival, one
  of the U.K.'s most popular horse racing events. Betting Net Win 
  Margin was 9.7%, slightly above the historical long-term average of
  approximately 9%. 
- Customers - Record QAUs and Stakes in the quarter, which were 
  primarily a result of the successful promotional activity and 
  ongoing product innovation and improvements across betting and 
  gaming offerings, in each case exceeding the positive impact of the
  FIFA World Cup in the prior year period. Stakes continued to see 
  strong growth from increased new customer engagement, while QAUs 
  also continued to benefit from the on-going roll-out of 
  personalized promotions and new and exclusive content across the 
  Sky Betting & Gaming brands, including the recent launches of Sky 
  Bingo Arcade and Sky Lotto, a new free-to-play game. 

Australia

                Three     Six   
                Months    Months
                Ended     Ended 
                June      June  
                30,       30,   
In thousands    2019      2018 ¹         %       2019      2018           %     
of U.S.                                  Change            ¹              Change
Dollars                                                                         
(except                                                                         
otherwise                                                                       
noted)                                                                          
Stakes          742,312          710,269         4.5     %      1,496,638         867,726    72.5   %
Betting Net     8.5     %        8.6     %       (1.2)   %      8.3       %       8.3     %  -      %
Win Margin (%)                                                                                       
Revenue                                                                         
Betting         63,226           61,277          3.2     %      124,346           72,402     71.7   %
Other           844              -               -       %      1,898             -          -      %
Total revenue   64,070           61,277          4.6     %      126,244           72,402     74.4   %
QAUs            0.21             -               -       %                                 
(millions)                                                                                 
QNY ($/QAU)     295              -               -       %                                 
Gross profit    38,376           46,799          (18.0)  %      75,657            54,435     39.0   %
(excluding                                                                                           
depreciation                                                                                         
and                                                                                                  
amortization)                                                                                        
Gross profit    59.9    %        76.4    %       (21.6)) %      59.9      %       75.2    %  (20.3) %
margin (%)                                                                                           
General and     28,821           40,270          (28.4)  %      54,903            44,607     23.1   %
administrative                                                                                       
Sales and       13,304           12,262          8.5     %      24,068            16,473     46.1   %
marketing                                                                                            
Research and    576              768             (25.0)  %      2,149             984        118.4  %
development                                                                                          
Operating loss  (4,325)          (6,501)         33.5    %      (5,463)           (7,629)    28.4   %
Adjusted        7,192            13,489          (46.7)  %      15,822            12,643     25.1   %
EBITDA 2                                                                                             
Adjusted        11.2    %        22.0    %       (49.1)  %      12.5      %       17.4    %  (28.2) %
EBITDA Margin                                                                                        
(%) 2                                                                                                 

_____________________________

1 The Stars Group acquired 62% of BetEasy on February 27, 2018 and a further 18% on April 24, 2018, with BetEasy acquiring William Hill Australia on the same day.

2 Non-IFRS measure. For important information on The Stars Group's non-IFRS measures, see below under "Non-IFRS Measures" and the tables under "Reconciliation of Non-IFRS Measures to Nearest IFRS Measures".

- Revenue - Revenue for the quarter increased year-over-year 
  primarily as a result of Stakes growth driven by the migration of 
  customers of the former William Hill Australia business to the 
  BetEasy platform and the launch of MyRewards towards the end of the
  first quarter. This was partially offset by the positive impact of 
  the FIFA World Cup in the prior year period. Betting Net Win Margin
  of 8.5% was in line with the long-term historical average.
- Customers - QAUs improved from the prior quarter driven by 
  continued player acquisition, but decreased from the prior year 
  period primarily as a result of the migration of customers of the 
  former William Hill Australia business to the BetEasy platform 
  beginning in August 2018, and an increased focus on high-value, 
  recreational customers. QNY benefited from encouraging results from
  the continued roll-out of MyRewards, allowing for targeted, 
  personalized promotions.
- Kayo Sports - In May 2019, BetEasy announced a new partnership with
  Kayo Sports to become the exclusive wagering partner of the 
  Australian multi-sport streaming service. Under the two-year 
  agreement, BetEasy and Kayo will work together to deliver 
  innovative content, statistics and promotional integrations that 
  deepen engagement and enhance the wagering and viewing experience 
  for Australian customers. 

For additional information regarding The Stars Group's reporting segments and major lines of operations, please see The Stars Group's interim condensed consolidated financial statements for the three and six months ended June 30, 2019 (the "Q2 2019 Financial Statements"), including note 5 therein, and management's discussion and analysis thereon (the "Q2 2019 MD&A").

2019 Updated Full Year Guidance

The Stars Group is updating its 2019 full year consolidated financial guidance ranges as follows:

- Revenue of between $2,500 and $2,575 million (previously $2,640 and
  $2,765 million); 
- Adjusted EBITDA of between $905 and $930 million (previously $960 
  and $1,010 million); and 
- Adjusted Diluted Net Earnings per Share of between $1.68 and $1.83 
  (previously $1.87 and $2.11). 

In addition to the updated assumptions detailed below, the expected revenue and Adjusted EBITDA ranges reflect the impact of negative foreign exchange fluctuations, a historically low Betting Net Win Margin in the first quarter for the United Kingdom segment, the slower than planned recovery in certain disrupted markets and some delays in launching The Stars Group's newly licensed operations in certain jurisdictions, such as Switzerland.

In addition to approximately $15 million for negative foreign exchange fluctuations, the expected Adjusted EBITDA range also reflects the impact of the following factors:

- Approximately $40 million for The Stars Group's investment in FOX 
  Bet and its U.S. operations; and 
- An offsetting underlying improvement in operations, primarily 
  driven by an operational excellence program to streamline certain 
  fixed costs and currently expected sequential improvements in 
  disrupted markets. 

The Stars Group continues to expect to achieve the medium-term financial and leverage target ranges set out in its news release on March 27, 2019, but now over the three to five year period from the updated 2019 financial guidance ranges above.

In addition, to provide further clarity with respect to certain key assumptions and the impact of its 2018 acquisitions on its full year 2019 expected results, The Stars Group is also updating information for certain financial items, which unless noted below remain unchanged from the previously announced ranges:

- Depreciation and amortization (excluding purchase price allocation 
  amortization) of between $75 and $85 million; 
- Cash interest expense of between $280 and $290 million (previously 
  between $290 and $300 million); 
- Effective tax rate (applied to Adjusted EBITDA less cash interest 
  expense and non-purchase price allocation related depreciation and 
  amortization) of approximately 10% (previously between 8% and 10%);
- Diluted Shares of 283 million (previously 277 million); and 
- Capital expenditures, which includes estimated spend on intangible 
  assets, property, plant and equipment and certain development 
  costs, of approximately $150 million (previously between $110 and 
  $150 million) 

These unaudited expected results, targets and other information reflect management's view of current and future market and business conditions, including certain accounting assumptions and, other than as noted directly above or below, assumptions of (i) expected Betting Net Win Margin of approximately 8.5% (with the remainder of the year and the medium-term targets unchanged from the previous estimates of approximately 9%), (ii) no further material changes in the current challenging operating conditions in certain markets from prior regulatory changes, including constraints on payment processing and accessing certain products, and no material changes to current expectations with respect to certain macroeconomic or political events, including Brexit, (iii) no other material regulatory events or material changes in applicable taxes or duty rates, (iv) no other material investments associated with the entry into new markets and no material change in The Stars Group's current estimate of its aggregate addressable U.S. market size of approximately 23 states and $9.3 billion by 2025, (v) other than as updated below, no further material foreign currency exchange rate fluctuations, particularly against the Euro, Great Britain pound sterling and Australian dollar, (vi) no material impairment or write-down of the assets to which depreciation and amortization relates, (vii) no material change in the prevailing EURIBOR or LIBOR rates as at June 30, 2019 (previously December 31, 2018) and no material adverse impact on applicable hedging counterparties, (viii) no material change in the mix of taxable income by jurisdiction, rate of corporate tax or tax regimes in the jurisdictions in which The Stars Group currently operates; (ix) no material change in the mix of geographies where The Stars Group currently offers its products, and (x) no material change in The Stars Group's Diluted Shares.

Such guidance, targets and information are also now based on an updated Euro to U.S. dollar exchange rate of 1.12 to 1.00 (previously 1.135 to 1.00), a Great Britain pound sterling to U.S. dollar exchange rate of 1.22 to 1.00 (previously 1.31 to 1.00) and an Australian dollar to U.S. dollar exchange rate of 0.69 to 1.00 (previously 0.712 to 1.00), for the second half of 2019.

Consolidated Financial Statements, Management's Discussion and Analysis and Additional Information

The Stars Group's Q2 2019 Financial Statements, Q2 2019 MD&A, and additional information relating to The Stars Group and its business, can be found on SEDAR at www.sedar.com, Edgar at www.sec.gov and The Stars Group's website at www.starsgroup.com. The financial information presented in this news releases was derived from the Q2 2019 Financial Statements.

In addition to press releases, securities filings and public conference calls and webcasts, The Stars Group intends to use its investor relations page on its website as a means of disclosing material information to its investors and others and for complying with its disclosure obligations under applicable securities laws. Accordingly, investors and others should monitor the website in addition to following The Stars Group's press releases, securities filings and public conference calls and webcasts. This list may be updated from time to time.

Conference Call and Webcast Details

The Stars Group will host a conference call today, August 12, 2019 at 8:30 a.m. ET to discuss its financial results for the second quarter 2019 and related matters, and provide additional detail with respect to the information in this news release, its webcast presentation and related filings. To access via tele-conference, please dial +1-877-451-6152 or +1-201-389-0879 ten minutes prior to the scheduled start of the call. The playback will be made available two hours after the event at +1-844-512-2921 or +1-412-317-6671. The Conference ID number is 13693490. To access the webcast please use the following link: http://public.viavid.com/index.php?id=134939.

Reconciliation of Non-IFRS Measures to Nearest IFRS Measures

The tables below present reconciliations of Adjusted EBITDA, Adjusted Net Earnings and Adjusted Diluted Net Earnings per Share to net earnings (loss), which is the nearest IFRS measure. For additional information, see "Reconciliations" in the Q2 2019 MD&A.

              Three Months 
              Ended June   
              30, 2019     
In thousands  International  United          Australia  Corporate  Consolidated
of U.S.                      Kingdom                                           
Dollars                                                                        
Net earnings  95,502                 34,881             (4,325)                 (121,429)   4,629    
(loss)                                                                                               
Income tax    -                      -                  -                       (21,081)    (21,081) 
expense                                                                                              
Net           -                      -                  -                       (68,245)    (68,245) 
financing                                                                                            
charges                                                                                              
Operating     95,502                 34,881             (4,325)                 (32,103)    93,955   
income                                                                                               
(loss)                                                                                               
Depreciation  39,377                 60,146             9,404                   154         109,081  
and                                                                                                  
amortization                                                                                         
Add (deduct)                                                                   
the impact                                                                     
of the                                                                         
following:                                                                     
Stock-based   -                      -                  -                       4,726       4,726    
compensation                                                                                         
(Gains)       (463)                  44                 -                       93          (326)    
losses from                                                                                          
investments                                                                                          
(Recovery)    (1)                    2,499              -                       -           2,498    
impairment                                                                                           
of                                                                                                   
intangible                                                                                           
assets                                                                                               
Other costs   8,808                  3,483              2,113                   12,396      26,800   
Total         8,344                  6,026              2,113                   17,215      33,698   
adjusting                                                                                            
items                                                                                                
Adjusted      143,223                101,053            7,192                   (14,734)    236,734  
EBITDA                                                                                                
              Six Months   
              Ended June   
              30, 2019     
In thousands  International  United          Australia  Corporate  Consolidated
of U.S.                      Kingdom                                           
Dollars                                                                        
Net earnings  210,085                8,889              (5,463)                 (181,224)   32,287    
(loss)                                                                                                
Income tax    -                      -                  -                       (7,983)     (7,983)   
expense                                                                                               
Net           -                      -                  -                       (115,222)   (115,222) 
financing                                                                                             
charges                                                                                               
Operating     210,085                8,889              (5,463)                 (58,019)    155,492   
income                                                                                                
(loss)                                                                                                
Depreciation  77,356                 121,817            18,846                  356         218,375   
and                                                                                                   
amortization                                                                                          
Add (deduct)                                                                   
the impact                                                                     
of the                                                                         
following:                                                                     
Stock-based   -                      -                  -                       7,462       7,462     
compensation                                                                                          
(Gains)       (530)                  44                 -                       93          (393)     
losses from                                                                                           
investments                                                                                           
Impairment    11                     2,641              -                       -           2,652     
of                                                                                                    
intangible                                                                                            
assets                                                                                                
Other costs   15,641                 9,881              2,439                   20,540      48,501    
Total         15,122                 12,566             2,439                   28,095      58,222    
adjusting                                                                                             
items                                                                                                 
Adjusted      302,563                143,272            15,822                  (29,568)    432,089   
EBITDA                                                                                                 
                     Three Months 
                     Ended June   
                     30, 2018     
In thousands of      International  United    Australia  Corporate  Consolidated
U.S. Dollars                        Kingdom                                     
Net earnings (loss)  125,084                -            (6,501)                 (273,407)   (154,824) 
Income tax recovery  -                      -            -                       3,404       3,404     
Net financing        -                      -            -                       (160,360)   (160,360) 
charges                                                                                                
Net earnings from    1,068                  -            -                       -           1,068     
associates                                                                                             
Operating income     124,016                -            (6,501)                 (116,451)   1,064     
(loss)                                                                                                 
Depreciation and     35,987                 -            8,588                   10          44,585    
amortization                                                                                           
Add (deduct) the                                                                
impact of the                                                                   
following:                                                                      
Acquisition-related  -                      -            -                       95,627      95,627    
costs and deal                                                                                         
contingent forwards                                                                                    
Stock-based          -                      -            -                       3,265       3,265     
compensation                                                                                           
(Gain) loss from     (270)                  -            5                       -           (265)     
investments                                                                                            
Impairment of        959                    -            -                       -           959       
intangible assets                                                                                      
Other costs          3,775                  -            11,397                  7,864       23,036    
Total adjusting      4,464                  -            11,402                  106,756     122,622   
items                                                                                                  
Adjusted EBITDA      164,467                -            13,489                  (9,685)     168,271    
                     Six Months   
                     Ended June   
                     30, 2018     
In thousands of      International  United    Australia  Corporate  Consolidated
U.S. Dollars                        Kingdom                                     
Net earnings (loss)  271,922                -            (7,629)                 (344,756)   (80,463)  
Income tax recovery  -                      -            -                       2,249       2,249     
Net financing        -                      -            -                       (198,711)   (198,711) 
charges                                                                                                
Net earnings from    1,068                  -            -                       -           1,068     
associates                                                                                             
Operating income     270,854                -            (7,629)                 (148,294)   114,931   
(loss)                                                                                                 
Depreciation and     73,956                 -            9,868                   19          83,843    
amortization                                                                                           
Add the impact of                                                               
the following:                                                                  
Acquisition-related  -                      -            -                       110,818     110,818   
costs and deal                                                                                         
contingent                                                                                             
forwards                                                                                               
Stock-based          -                      -            -                       5,648       5,648     
compensation                                                                                           
Loss from            247                    -            -                       -           247       
investments                                                                                            
Impairment of        1,074                  -            -                       -           1,074     
intangible assets                                                                                      
Other costs          4,743                  -            10,404                  11,585      26,732    
Total adjusting      6,064                  -            10,404                  128,051     144,519   
items                                                                                                  
Adjusted EBITDA      350,874                -            12,643                  (20,224)    343,293    
                     Three        Six   
                     Months       Months
                     Ended June   Ended 
                     30,          June  
                                  30,   
In thousands of      2019         2018               2019  2018       
U.S. Dollars                                                          
(except per share                                                     
amounts)                                                              
Net earnings (loss)  4,629               (154,824)         32,287        (80,463)    
Income tax expense   21,081              (3,404)           7,983         (2,249)     
(recovery)                                                                           
Earnings (loss)      25,710              (158,228)         40,270        (82,712)    
before income taxes                                                                  
Add (deduct) the                                                      
impact of the                                                         
following:                                                            
Interest accretion   14,088              9,029             22,357        21,080      
Loss on debt         -                   124,976           -             124,976     
extinguishment                                                                       
Re-measurement of    (3,335)             3,697             (12,713)      3,697       
contingent                                                                           
consideration                                                                        
Re-measurement of    (12,200)            -                 (34,800)      -           
embedded derivative                                                                  
Unrealized foreign   (292)               -                 1,340         -           
exchange (gain)                                                                      
loss on financial                                                                    
instruments                                                                          
associated with                                                                      
financing                                                                            
activities                                                                           
Ineffectiveness on   5,708               -                 7,564         -           
cash flow hedges                                                                     
Acquisition-related  -                   95,627            -             110,818     
costs and deal                                                                       
contingent forwards                                                                  
Amortization of      87,789              31,482            177,744       62,858      
acquisition                                                                          
intangibles                                                                          
Stock-based          4,726               3,265             7,462         5,648       
compensation                                                                         
Gain from            (326)               (1,333)           (393)         (821)       
investments and                                                                      
earnings from                                                                        
associates                                                                           
Impairment of        2,498               959               2,652         1,074       
intangible assets                                                                    
Other costs          26,800              23,036            48,501        26,732      
Adjust for income    (13,697)            (1,487)           (16,915)      (3,565)     
tax expense                                                                          
Adjusted Net         137,469             131,023           243,069       269,785     
Earnings                                                                             
Adjusted Net                                                          
Earnings                                                              
attributable to                                                       
Shareholders of The  136,584             129,237           241,410       269,469     
Stars Group Inc.                                                                     
Non-controlling      885                 1,786             1,659         316         
interest                                                                             
Diluted Shares       282,399,213         215,380,175       278,181,337   212,449,078 
Adjusted Diluted     0.48                0.60              0.87          1.27        
Net Earnings per                                                                     
Share                                                                                 

The table below presents certain items comprising "Other costs" in the reconciliation tables above:

               Three   Six   
               Months  Months
               Ended   Ended 
               June    June  
               30,     30,   
In thousands   2019    2018          2019  2018  
of U.S.                                          
Dollars                                          
Integration    4,899          11,467       12,922   11,467 
costs of                                                   
acquired                                                   
businesses                                                 
Financial      1,083          4,330        2,113    2,049  
expenses                                                   
Restructuring  2,320          1,426        6,229    2,058  
expenses                                                   
AMF, foreign   6,511          2,875        9,220    4,659  
payments and                                               
other                                                      
investigation                                              
and related                                                
professional                                               
fees                                                       
Lobbying       3,290          2,665        6,562    5,658  
(U.S. and                                                  
Non-U.S.) and                                              
other legal                                                
expenses                                                   
Professional   8,643          102          10,463   553    
fees in                                                    
connection                                                 
with non-core                                              
activities                                                 
Retention      -              117          -        234    
bonuses                                                    
(Gain) loss    (393)          41           (393)    41     
on disposal                                                
of assets                                                  
Other          447            13           1,385    13     
Other costs    26,800         23,036       48,501   26,732  

The table below presents a reconciliation of Free Cash Flow to net cash flows from operating activities, which is the nearest IFRS measure:

              Three     Six   
              Months    Months
              Ended     Ended 
              June 30,  June  
                        30,   
In thousands  2019      2018            2019  2018     
of U.S.                                                
Dollars                                                
Net cash      173,208          164,011        283,593     296,080  
inflows from                                                       
operating                                                          
activities                                                         
Customer      12,995           (14,090)       (2,346)     (13,901) 
deposit                                                            
liability                                                          
movement                                                           
              186,203          149,921        281,247     282,179  
Capital                                                
expenditure:                                           
Additions to  (18,887)         (9,759)        (39,033)    (16,190) 
deferred                                                           
development                                                        
costs                                                              
Additions to  (4,131)          (5,676)        (8,178)     (9,261)  
property and                                                       
equipment                                                          
Additions to  (13,971)         (9,415)        (18,505)    (11,842) 
intangible                                                         
assets                                                             
Interest      (50,524)         (34,790)       (142,285)   (66,278) 
paid                                                               
Debt          (13,870)         (5,425)        (25,939)    (11,493) 
servicing                                                          
cash flows                                                         
(excluding                                                         
voluntary                                                          
prepayments)                                                       
Free Cash     84,820           84,856         47,307      167,115  
Flow                                                                

The table below presents a reconciliation of Net Debt:

In thousands of U.S. Dollars                   As at June 30, 2019
Current portion of long-term debt              35,750              
Long-term debt                                 5,053,165           
Less: Cash and cash equivalents - operational  339,239             
Net Debt                                       4,749,676            

The table below presents a reconciliation of The Stars Group's updated 2019 financial guidance ranges for Adjusted EBITDA and Adjusted Diluted Net Earnings per Share to their corresponding 2018 historical balances. Reconciliations of such 2018 historical balances to their nearest non-IFRS measures are as presented in the news release issued by The Stars Group on March 6, 2019, under the heading "Reconciliation of Non-IFRS Measures to Nearest IFRS Measures".

                 2018    2019      2019    
                 Actual  Full      Full    
                         Year      Year    
In millions of           Guidance  Guidance
U.S. Dollars             Low1      High1   
(except per                                
share amounts)                             
Operating        253     330       355     
Income (loss)                              
Depreciation     283     450       430     
and                                        
amortization                               
Add (deduct)                               
the impact of                              
the following:                             
Adjusting        136     10        20      
items2                                     
Other            109     115       125     
costs3                                     
Total            245     125       145     
Adjustments                                
Adjusted EBITDA  781     905       930     
Depreciation     41      85        75      
and                                        
amortization4                              
Interest5        184     290       280     
Taxes6           22      50        53      
Adjusted Net     534     480       522     
Earnings                                   
Adjusted Net                               
Earnings                                   
attributable to                            
Shareholders of  531     475       518     
Stars Group                                
Inc.                                       
Non-controlling  3       5         4       
Interest                                   
Diluted Shares   243     283       283     
Adjusted         2.19    1.68      1.83    
Diluted Net                                
Earnings per                               
Share                                       

_____________________________

1 For relevant assumptions, see above under "2019 Updated Financial Guidance". Note that certain reconciling or adjusting items and costs for 2019 cannot be projected or predicted with reasonable certainty without unreasonable effort due to a number of factors, including variability from potential foreign exchange fluctuations impacting financial expenses, the nature and timing of other non-recurring or one-time costs (such as impairment of intangibles assets and certain professional fees), which could vary materially based on actual events or transactions or unknown or unpredictable variables, as well as the typical variability arising from the preparation and completion of annual financial statements, including, without limitation, certain income tax provision accounting, annual impairment testing and other accounting matters. Other adjusting items and costs (such as stock-based compensation, acquisition and integration-related costs, operational efficiency-related costs and other strategy-related expenses) may otherwise reveal commercially or competitively sensitive information. The Stars Group has also not provided a reconciliation of the non-IFRS measures to the nearest IFRS measures included in its updated full year 2019 guidance provided in this news release because of these reasons.

2 With respect to the relevant adjusting items for 2018, see the Adjusted EBITDA reconciliation in the news release issued by The Stars Group on March 6, 2019, under the heading "Reconciliation of Non-IFRS Measures to Nearest IFRS Measures". With respect to 2019, The Stars Group currently expects to incur and adjust for substantially similar items as it did in 2018 except for "acquisition-related costs and deal contingent forwards", which related to the acquisitions of Sky Betting & Gaming and BetEasy and comprised the majority of such adjusting items in that year.

3 With respect to the Other costs for 2018, see the "Other costs" reconciliation in the news release issued by The Stars Group on March 6, 2019, under the heading "Reconciliation of Non-IFRS Measures to Nearest IFRS Measures". With respect to 2019, The Stars Group currently expects to incur and adjust for substantially similar costs as it did in 2018.

4 "Depreciation and amortization" means total depreciation and amortization, excluding amortization of acquisition intangibles, which is not adjusted for in this measure.

5 "Interest" means total net financing charges, including interest on long term debt and other interest (income) expense but excluding interest accretion, ineffectiveness on cash flow hedges, re-measurement of deferred contingent consideration, and re-measurement of embedded derivatives, each of which is not adjusted for in this measure.

6 "Taxes" means total income tax expense, excluding the impact of tax on "Adjusting items" and "Other costs" included in the calculation of Adjusted EBITDA for each period.

For additional information on The Stars Group's non-IFRS measures, see the Q2 2019 MD&A, including under the headings "Management's Discussion and Analysis", "Non-IFRS Measures, Key Metrics and Other Data", "Segment Results of Operations" and "Reconciliations".

About The Stars Group

The Stars Group is a provider of technology-based product offerings in the global gaming and interactive entertainment industries. Its brands have millions of registered customers globally and collectively are leaders in online and mobile betting, poker, casino and other gaming-related offerings. The Stars Group owns or licenses gaming and related consumer businesses and brands, including PokerStars, PokerStars Casino, BetStars, Full Tilt, FOX Bet, BetEasy, Sky Bet, Sky Vegas, Sky Casino, Sky Bingo, Sky Poker, and Oddschecker, as well as live poker tour and events brands, including the PokerStars Players No Limit Hold'em Championship, European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour, Asia Pacific Poker Tour, PokerStars Festival and PokerStars MEGASTACK. The Stars Group is one of the world's most licensed online gaming operators with its subsidiaries collectively holding licenses or approvals in 21 jurisdictions throughout the world, including in Europe, Australia, and the Americas. The Stars Group's vision is to become the world's favorite iGaming destination and its mission is to provide its customers with winning moments.

Cautionary Note Regarding Forward Looking Statements

This news release contains forward-looking statements and information within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable securities laws, including, without limitation, certain financial and operational expectations and projections, such as certain future operational and growth plans and strategies, and certain financial items relating to the full year 2019 results. Forward-looking statements and information can, but may not always, be identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "would", "should", "believe", "objective", "ongoing", "imply", "assumes", "goal", "likely" and similar references to future periods or the negatives of these words or variations or synonyms of these words or comparable terminology and similar expressions. These statements and information, other than statements of historical fact, are based on management's current expectations and are subject to a number of risks, uncertainties, and assumptions, including market and economic conditions, business prospects or opportunities, future plans and strategies, projections, technological developments, anticipated events and trends and regulatory changes that affect The Stars Group and its customers, partners, suppliers and industries in which it operates or may operate in the future. Although The Stars Group and management believe the expectations reflected in such forward-looking statements and information are reasonable and are based on reasonable assumptions and estimates as of the date hereof, there can be no assurance that these assumptions or estimates are accurate or that any of these expectations will prove accurate. Forward-looking statements are inherently subject to significant business, regulatory, economic and competitive risks, uncertainties and contingencies that could cause actual events to differ materially from those expressed or implied in such statements. Specific risks and uncertainties include, but are not limited to: customer and operator preferences and changes in the economy; reputation and brand growth; competition and the competitive environment within addressable markets and industries; macroeconomic conditions and trends in the gaming and betting industry; ability to predict fluctuations in financial results from quarter to quarter; ability to mitigate tax risks and adverse tax consequences, including, without limitation, changes in tax laws or administrative policies relating to tax and the imposition of new or additional taxes, such as value-added and point of consumption taxes, and gaming duties; The Stars Group's substantial indebtedness requires that it use a significant portion of its cash flow to make debt service payments; impact of inability to complete future or announced acquisitions or to integrate businesses successfully, including, without limitation, Sky Betting & Gaming and BetEasy; contractual relationships of The Stars Group with FOX Corporation and Sky plc and/or their respective subsidiaries; an ability to realize all or any of The Stars Group's estimated synergies and cost savings in connection with acquisitions, including, without limitation, the acquisition of Sky Betting & Gaming and the Australian acquisitions; ability to mitigate foreign exchange and currency risks; legal and regulatory requirements; potential changes to the gaming regulatory framework, including without limitation, those that may impact The Stars Group's ability to access and operate in certain jurisdictions, whether directly or through arrangements with locally based operators; the heavily regulated industry in which The Stars Group carries on its business; ability to obtain, maintain and comply with all applicable and required licenses, permits and certifications to offer, operate and market its product offerings, including difficulties or delays in the same; social responsibility concerns and public opinion; protection of proprietary technology and intellectual property rights; intellectual property infringement or invalidity claims; and systems, networks, telecommunications or service disruptions or failures or cyber-attacks and failure to protect customer data, including personal and financial information. These factors are not intended to represent a complete list of the factors that could affect The Stars Group; however, these factors as well as other applicable risks and uncertainties include, but are not limited to, those identified in its most recently filed annual information form, including under the heading "Risk Factors and Uncertainties", and in its most recently filed management's discussion and analysis, including under the headings "Caution Regarding Forward-Looking Statements", "Risk Factors and Uncertainties" and "Non-IFRS Measures, Key Metrics and Other Data", each available on SEDAR at www.sedar.com, EDGAR at www.sec.gov and The Stars Group's website at www.starsgroup.com, and in other filings that The Stars Group has made and may make in the future with applicable securities authorities in the future, should be considered carefully. Investors are cautioned not to put undue reliance on forward-looking statements or information. Any forward-looking statement or information in this news release are expressly qualified by this cautionary statement. Any forward-looking statement or information speaks only as of the date hereof, and The Stars Group undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Non-IFRS Measures

This news release references non-IFRS financial measures. The Stars Group believes these non-IFRS financial measures will provide investors with useful supplemental information about the financial and operational performance of its business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating its business, identifying and evaluating trends, and making decisions. The Stars Group believes that such non-IFRS financial measures provide useful information about its underlying, core operating results and trends, enhance the overall understanding of its past performance and future prospects and allow for greater transparency with respect to metrics and measures used by management in its financial and operational decision-making.

Although management believes these non-IFRS financial measures are important in evaluating The Stars Group, they are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS. They are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS. These measures may be different from non-IFRS financial measures used by other companies any may not be comparable to similar meanings prescribed by other companies, limiting its usefulness for comparison purposes. Moreover, presentation of certain of these measures is provided for period-over-period comparison purposes, and investors should be cautioned that the effect of the adjustments thereto provided herein have an actual effect on The Stars Group's operating results. In addition to QNY, which is defined below under "Key Metrics and Other Data",

The Stars Group provides the following non-IFRS measures in this news release:

Adjusted EBITDA means net earnings before financial expenses, income tax expense (recovery), depreciation and amortization, stock-based compensation, restructuring, net earnings (loss) on associate and certain other items as set out in the reconciliation tables under "Reconciliation of Non-IFRS Measures to Nearest IFRS Measures" above.

Adjusted EBITDA Margin means Adjusted EBITDA as a proportion of total revenue.

Adjusted Net Earnings means net earnings before interest accretion, amortization of intangible assets resulting from purchase price allocations following acquisitions, stock-based compensation, restructuring, net earnings (loss) on associate, and certain other items. In addition, as previously disclosed, The Stars Group makes adjustments for (i) the re-measurement of contingent consideration, which was previously included in, and adjusted for through, interest accretion, but starting with The Stars Group's interim condensed consolidated financial statements and related notes for the three and nine months ended September 30, 2018 (the "Q3 2018 Financial Statements"), it is a separate line item, (ii) the re-measurement of embedded derivatives and ineffectiveness on cash flow hedges, each of which were new line items in the Q3 2018 Financial Statements, and (iii) certain non-recurring tax adjustments and settlements. Each adjustment to net earnings is then adjusted for the tax impact, where applicable, in the respective jurisdiction to which the adjustment relates. Adjusted Net Earnings and any other non-IFRS measures used by The Stars Group that relies on or otherwise incorporates Adjusted Net Earnings that was reported for previous periods have not been restated under the updated definition on the basis that The Stars Group believes that the impact of the change to those periods would not be material.

Adjusted Diluted Net Earnings per Share means Adjusted Net Earnings attributable to the Shareholders of The Stars Group Inc. divided by Diluted Shares. Diluted Shares means the weighted average number of Common Shares on a fully diluted basis, including options, other equity-based awards such as warrants and any convertible preferred shares of The Stars Group then outstanding. The effects of anti-dilutive potential Common Shares are ignored in calculating Diluted Shares. Diluted Shares used in the calculation of diluted earnings per share may differ from diluted shares used in the calculation of Adjusted Diluted Net Earnings per Share where the dilutive effects of the potential Common Shares differ. See note 8 in the Q2 2019 Financial Statements. For the three and six months ended June 30, 2019, Diluted Shares used for the calculation of Adjusted Diluted Net Earnings per Share equaled 282,399,213 and 278,181,337, respectively, compared with 215,380,175 and 212,449,078 for the prior year periods, respectively.

Constant Currency Revenue means IFRS reported revenue for the relevant period calculated using the applicable prior year period's monthly average exchange rates for its local currencies other than the U.S. dollar. Currently, The Stars Group provides Constant Currency Revenue for the International segment and its applicable lines of operations. It does not currently provide Constant Currency Revenue for the United Kingdom and Australia segments because The Stars Group does not yet have full reported comparative periods for these segments as a result of the respective acquisition dates of Sky Betting & Gaming and BetEasy, and with respect to BetEasy, the Corporation had not yet completed the previously announced migration of the former William Hill Australia customers onto the BetEasy platform. The Corporation intends to provide information on the impact of foreign exchange rates for these segments either individually or on a consolidated basis when applicable reported comparative period information is available that the Corporation believes would be reasonably comparable to the current periods as noted above.

Free Cash Flow means net cash flows from operating activities after adding back customer deposit liability movements and after capital expenditures and debt servicing cash flows (excluding voluntary prepayments).

Net Debt means total long-term debt less operational cash.

For additional information on certain of The Stars Group's non-IFRS measures and the reasons why it believes such measures are useful, see above and the Q2 2019 MD&A, including under the headings "Management's Discussion and Analysis", "Non-IFRS Measures, Key Metrics and Other Data", "Segment Results of Operations" and "Reconciliations".

Key Metrics and Other Data

The Stars Group provides the following key metrics in this news release:

QAUs for the International and Australia reporting segments means active unique customers (online, mobile and desktop client) who (i) made a deposit or transferred funds into their real-money account with The Stars Group at any time, and (ii) generated real-money online rake or placed a real-money online bet or wager during the applicable quarterly period. The Stars Group defines "active unique customer" as a customer who played or used one of its real-money offerings at least once during the period, and excludes duplicate counting, even if that customer is active across multiple lines of operation (Poker, Gaming and/or Betting, as applicable) within the applicable reporting segment. The definition of QAUs excludes customer activity from certain low-stakes, non-raked real-money poker games, but includes real-money activity by customers using funds (cash and cash equivalents) deposited by The Stars Group into such customers' previously funded accounts as promotions to increase their lifetime value.

QAUs for the United Kingdom reporting segment (which currently includes the Sky Betting & Gaming business operations only) means active unique customers (online and mobile) who have settled a Stake (as defined below) or made a wager on any betting or gaming product within the applicable quarterly period. The Stars Group defines "active unique customer" for the United Kingdom reporting segment as a customer who played at least once on one of its real-money offerings during the period, and excludes duplicate counting, even if that customer is active across more than one line of operation.

QNY means combined revenue for its lines of operation (i.e., Poker, Gaming and/or Betting, as applicable) for each reporting segment, excluding Other revenue, as reported during the applicable quarterly period (or as adjusted to the extent any accounting reallocations are made in later periods) divided by the total QAUs during the same period.

Net Deposits for the International segment means the aggregate of gross deposits or transfer of funds made by customers into their real-money online accounts less withdrawals or transfer of funds by such customers from such accounts, in each case during the applicable quarterly period. Gross deposits exclude (i) any deposits, transfers or other payments made by such customers into The Stars Group's play-money and social gaming offerings, and (ii) any real-money funds (cash and cash equivalents) deposited by The Stars Group into such customers' previously funded accounts as promotions to increase their lifetime value.

Stakes means betting amounts wagered on The Stars Group's applicable online betting product offerings, and is also an industry term that represents the aggregate amount of funds wagered by customers within the betting line of operation for the period specified.

Betting Net Win Margin means Betting revenue as a proportion of Stakes.

The Stars Group is also continuing the process of integrating its recent acquisitions, as applicable, and implementing its recently changed operating and reporting segments, and once complete, The Stars Group may revise or remove currently presented key metrics or report certain additional or other measures in the future.

For additional information on The Stars Group's key metrics and other data, see the Q2 2019 MD&A, including under the headings "Non-IFRS Measures, Key Metrics and Other Data" and "Segment Results of Operations".

UNAUDITED      
INTERIM        
CONDENSED      
CONSOLIDATED   
STATEMENTS OF  
EARNINGS (LOSS)
                 Three      Six   
                 Months     Months
                 Ended      Ended 
                 June 30,   June  
                            30,   
In thousands of  2019       2018             2019  2018     
U.S. Dollars                                                
(except per                                                 
share and share                                             
amounts)                                                    
Revenue          637,618           411,512         1,218,002   804,403   
Cost of revenue  (173,910)         (83,637)        (336,546)   (163,901) 
(excluding                                                               
depreciation                                                             
and                                                                      
amortization)                                                            
Gross profit     463,708           327,875         881,456     640,502   
(excluding                                                               
depreciation                                                             
and                                                                      
amortization)                                                            
General and      (276,440)         (262,786)       (535,797)   (404,093) 
administrative                                                           
Sales and        (79,915)          (54,899)        (164,258)   (104,317) 
marketing                                                                
Research and     (13,398)          (9,126)         (25,909)    (17,161)  
development                                                              
Operating        93,955            1,064           155,492     114,931   
income                                                                   
Gain (loss) on   3,335             (3,697)         12,713      (3,697)   
re-measurement                                                           
of deferred                                                              
contingent                                                               
payment                                                                  
Gain on          12,200            -               34,800      -         
re-measurement                                                           
of embedded                                                              
derivative                                                               
Unrealized       292               -               (1,340)     -         
foreign                                                                  
exchange gain                                                            
(loss) on                                                                
financial                                                                
instruments                                                              
associated with                                                          
financing                                                                
activities                                                               
Other net        (84,072)          (156,663)       (161,395)   (195,014) 
financing                                                                
charges                                                                  
Net financing    (68,245)          (160,360)       (115,222)   (198,711) 
charges                                                                  
Net earnings     -                 1,068           -           1,068     
from associates                                                          
Earnings (loss)  25,710            (158,228)       40,270      (82,712)  
before income                                                            
taxes                                                                    
Income tax       (21,081)          3,404           (7,983)     2,249     
(expense)                                                                
recovery                                                                 
Net earnings     4,629             (154,824)       32,287      (80,463)  
(loss)                                                                   
Net earnings                                                
(loss)                                                      
attributable to                                             
Shareholders of  4,757             (153,645)       32,670      (78,194)  
The Stars Group                                                          
Inc.                                                                     
Non-controlling  (128)             (1,179)         (383)       (2,269)   
interest                                                                 
Net earnings     4,629             (154,824)       32,287      (80,463)  
(loss)                                                                   
Earnings (loss)                                             
per Common                                                  
Share (U.S.                                                 
dollars)                                                    
Basic            $0.02             ($1.01)         $0.12       ($0.52)   
Diluted          $0.02             ($1.01)         $0.12       ($0.52)   
Weighted                                                    
average Common                                              
Shares                                                      
outstanding                                                 
(thousands)                                                 
Basic            281,689           152,788         277,557     150,523   
Diluted          282,399           152,788         278,181     150,523    
UNAUDITED      
INTERIM        
CONDENSED      
CONSOLIDATED   
STATEMENTS OF  
FINANCIAL      
POSITION       
                 As at June  As at   
                 30,         December
                             31,     
In thousands of  2019        2018    
U.S. Dollars                         
ASSETS                               
Current assets                       
Cash and cash    339,239              392,853    
equivalents -                                    
operational                                      
Cash and cash    326,628              328,223    
equivalents -                                    
customer                                         
deposits                                         
Total cash and   665,867              721,076    
cash                                             
equivalents                                      
Restricted cash  9,239                10,819     
advances and                                     
collateral                                       
Prepaid          45,296               43,945     
expenses and                                     
other current                                    
assets                                           
Current          105,196              103,153    
investments -                                    
customer                                         
deposits                                         
Accounts         121,190              136,347    
receivable                                       
Income tax       25,074               26,085     
receivable                                       
Total current    971,862              1,041,425  
assets                                           
Non-current                          
assets                               
Restricted cash  10,677               10,630     
advances and                                     
collateral                                       
Prepaid          31,605               32,760     
expenses and                                     
other                                            
non-current                                      
assets                                           
Non-current      15,418               14,906     
accounts                                         
receivable                                       
Property and     139,532              85,169     
equipment                                        
Income tax       24,686               15,611     
receivable                                       
Deferred income  8,405                1,775      
taxes                                            
Derivatives      62,518               54,583     
Intangible       4,590,758            4,742,699  
assets                                           
Goodwill         5,256,819            5,265,980  
Total            10,140,418           10,224,113 
non-current                                      
assets                                           
Total assets     11,112,280           11,265,538 
LIABILITIES                          
Current                              
liabilities                          
Accounts         439,349              424,007    
payable and                                      
other                                            
liabilities                                      
Customer         421,084              423,739    
deposits                                         
Current          29,556               39,189     
provisions                                       
Derivatives      10,051               16,493     
Income tax       60,419               72,796     
payable                                          
Current portion  18,764               -          
of lease                                         
liability                                        
Current portion  35,750               35,750     
of long-term                                     
debt                                             
Total current    1,014,973            1,011,974  
liabilities                                      
Non-current                          
liabilities                          
Lease liability  44,121               -          
Long-term debt   5,053,165            5,411,208  
Long-term        3,637                4,002      
provisions                                       
Derivatives      40,675               6,068      
Other long-term  -                    79,716     
liabilities                                      
Income tax       11,659               18,473     
payable                                          
Deferred income  574,392              580,697    
taxes                                            
Total            5,727,649            6,100,164  
non-current                                      
liabilities                                      
Total            6,742,622            7,112,138  
liabilities                                      
EQUITY                               
Share capital    4,355,902            4,116,287  
Reserves         (525,270)            (469,629)  
Retained         535,431              502,761    
earnings                                         
Equity           4,366,063            4,149,419  
attributable to                                  
the                                              
Shareholders of                                  
The Stars Group                                  
Inc.                                             
Non-controlling  3,595                3,981      
interest                                         
Total equity     4,369,658            4,153,400  
Total            11,112,280           11,265,538 
liabilities and                                  
equity                                            
UNAUDITED      
INTERIM        
CONDENSED      
CONSOLIDATED   
STATEMENTS OF  
CASH FLOWS     
                 Six      
                 Months   
                 Ended    
                 June 30, 
In thousands of  2019       2018
U.S. Dollars                    
Operating                       
activities                      
Net earnings     32,287          (80,463)  
(loss)                                     
Add (deduct):                   
Income tax       7,983           (2,249)   
expense                                    
(recovery)                                 
recognized in                              
net earnings                               
(loss)                                     
Net financing    115,222         198,710   
charges                                    
Depreciation     218,375         83,843    
and                                        
amortization                               
Stock-based      7,462           5,948     
compensation                               
Unrealized loss  656             68,996    
on foreign                                 
exchange                                   
Unrealized gain  (485)           (164)     
on investments                             
Impairment of    2,652           1,074     
property and                               
equipment and                              
intangible                                 
assets                                     
Net earnings     -               (1,068)   
from associates                            
Realized (gain)  (292)           28        
loss on current                            
investments and                            
promissory note                            
Income taxes     (46,512)        (15,772)  
paid                                       
Changes in       (57,433)        18,525    
non-cash                                   
operating                                  
elements of                                
working capital                            
Customer         2,346           13,901    
deposit                                    
liability                                  
movement                                   
Other            1,332           4,771     
Net cash         283,593         296,080   
inflows from                               
operating                                  
activities                                 
Investing                       
activities                      
Acquisition of   -               (310,563) 
subsidiaries,                              
net of cash                                
acquired                                   
Additions to     (18,505)        (11,842)  
intangible                                 
assets                                     
Additions to     (8,178)         (9,261)   
property and                               
equipment                                  
Additions to     (39,033)        (16,190)  
deferred                                   
development                                
costs                                      
Net (purchase)   (2,043)         16,044    
sale of                                    
investments                                
utilizing                                  
customer                                   
deposits                                   
Settlement of    (675)           (2,713)   
minimum revenue                            
guarantee                                  
Net investments  -               1,068     
in associates                              
Other            (356)           (1,137)   
Net cash         (68,790)        (334,594) 
outflows from                              
investing                                  
activities                                 
Financing                       
activities                      
Issuance of      235,963         646,000   
Common Shares                              
Transaction      -               (24,225)  
costs on                                   
issuance of                                
Common Shares                              
Issuance of      1,784           27,627    
Common Shares                              
in relation to                             
stock options                              
Issuance of      -               425,041   
long-term debt                             
Repayment of     (367,875)       (106,493) 
long-term debt                             
Transaction      -               (23,061)  
costs on                                   
long-term debt                             
Repayment of     (8,064)         -         
lease liability                            
principal                                  
Interest paid    (142,285)       (66,278)  
Acquisition of   -               (48,240)  
further                                    
interest in                                
subsidiaries                               
Proceeds on      4,894           30,918    
loan issued to                             
the holders of                             
non-controlling                            
interest                                   
Net cash         (275,583)       861,289   
(outflows)                                 
inflows from                               
financing                                  
activities                                 
(Decrease)       (60,780)        822,775   
increase in                                
cash and cash                              
equivalents                                
Unrealized       5,571           (6,090)   
foreign                                    
exchange                                   
difference on                              
cash and cash                              
equivalents                                
Cash and cash    721,076         510,323   
equivalents -                              
beginning of                               
period                                     
Cash and cash    665,867         1,327,008 
equivalents -                              
end of period                               

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