Ladbrokes, owner of more than 2,300 betting shops in Ireland and Britain, said first-half profit dropped 21 per cent as horse-racing and soccer results favoured customers.
Net income was £74.7 million , or 12.4 pence per share, from £94 million, or 15.5 pence per share in the same period a year earlier.
"The economic and trading environment remains challenging and continuing uncertainty makes forecasting difficult," said chief executive officer Christopher Bell.
Rival William Hill warned on full-year profits on Tuesday, saying trading had been hit by a drop in the number of customers at weekends and a run of unfavourable results.
Ladbrokes said it was cutting its dividend by 31 percent to 3.5 pence given the results to date and uncertain outlook.
The company also said it would follow William Hill in transferring its online sportsbook operations to Gibraltar but would keep its telephone betting call centre in Britain.
Mr Bell said the company expected to save in excess of £7 million per annum from the move.
Ladbrokes is looking to sell its Italian retail business and Mr Bell said the company has received expressions of interest.
Analysts at UBS say the book value of the business is about £50 million.
Shares in Ladbrokes, which have lost nearly a third of their value over the past year, were up 2.5 per cent to 171.6 pence in early trading this morning.
Agencies