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 93