First, similar to most bariatric procedures, the newly created stomach pouch is considerably smaller and facilitates significantly smaller meals, which translates into less calories consumed.
Additionally, because there is less digestion of food by the smaller stomach pouch, and there is a segment of small intestine that would normally absorb calories as well as nutrients that no longer has food going through it, there is probably to some degree less absorption of calories and nutrients.
Most importantly, the rerouting of the food stream produces changes in gut hormones that promote satiety, suppress hunger, and reverse one of the primary mechanisms by which obesity induces type 2 diabetes.