Meridian Holdings Inc. (NASDAQ: MRDN) on Tuesday reported a third-quarter net loss attributable to the company of $13.3 million, or $(1.05) per share, a sharp reversal from net income of $0.6 million a year earlier, as the sports betting and gaming group absorbed $11.5 million in non-cash impairment charges and grappled with regulatory upheaval in Brazil. The results, announced via NEWMEDIAWIRE, underscore the regulatory and operational risks facing international gaming operators even as the company's core business generated cash and continued to pay down debt.
The largest impairment, $5.5 million, stemmed from the full write-off of the company's Brazilian gaming license and related intangible assets after Brazil issued Provisional Measure No. 1,394/2026 on September 25, prohibiting fixed-odds betting, including online casinos, by all operators. Operators were forced to take platforms offline and return player balances in early October, and existing federal authorizations were terminated without reimbursement of fees already paid. Meridian suspended its Brazilian operations and does not expect to resume gaming there during the remainder of 2026, though it intends to maintain a limited local presence while Congress and the courts decide on the measure. Revenue from Brazil was not material to the company, but the write-off contributed significantly to the quarterly loss.
A further $5.9 million goodwill impairment was recorded in the reporting unit holding RKingsCompetitions Ltd., the company's 80% interest in Classics Holdings Co. Pty Ltd., which owns Classics For A Cause Pty Ltd and GMAG, after continued operating losses. Combined revenue at RKings and Classics for a Cause fell 19% to $9.1 million, reflecting lower transaction volumes and average customer spending due to increased market competition and reduced effectiveness of certain digital advertising channels. The company also faces regulatory changes in Australia, where amendments to the Interactive Gambling Act affecting trade promotion gambling services take effect January 1, 2027, and Classics for a Cause is working on changes to its business model to comply. After the impairment, goodwill on the balance sheet was $3.0 million as of September 30, 2026.
Third-quarter revenue was $46.0 million, down 3% year-over-year, while net loss was $14.7 million and Adjusted EBITDA was $0.4 million, compared with Adjusted EBITDA of $4.8 million in the prior-year period. The company attributed the decline to customer-favorable sports results, lower revenue at RKings and Classics for a Cause, and higher operating costs, including marketing around the FIFA World Cup at Meridianbet Group and bad-debt expense at GMAG.
Despite the loss, Meridian Holdings highlighted its financial resilience. For the first nine months of 2026, revenue grew 10% to $146.3 million, operating cash flow was $17.7 million, and the company repaid $9.0 million of debt. Total debt fell 47% to $24.1 million as of September 30, 2026, and net debt declined 65% to $8.1 million, marking a seventh consecutive quarter of deleveraging without raising additional equity capital. The company ended the quarter with $16.0 million in cash and cash equivalents against $7.8 million of bank and other loans. In September 2026, Meridian extended the remaining $15.6 million of acquisition consideration owed to former Meridianbet Group owners, who are related parties, to November 1, 2031, with no interest.
Meridianbet Group, the company's largest segment, grew nine-month revenue 16% to $103.8 million, led by online casino revenue up 21% to $46.9 million. In the third quarter, however, segment revenue rose just 2% to $33.1 million as online sports betting revenue fell 15% to $8.7 million on a lower margin of 7.4%, compared with 8.2% a year earlier. The company now expects full-year 2026 revenue of between $195 million and $198 million, assuming it does not resume operations in Brazil, and anticipates a modest increase in sports betting revenue in the fourth quarter, historically its strongest, alongside continued online casino growth.
