Competition heats up in Brazil

An In-Depth Analysis of Q4 Performance in the Gambling Industry: Insights and Strategic Directions

The gambling industry continues to evolve rapidly, especially following the recent rollout of Brazil’s regulated online betting market on January 1. This development has prompted both established international operators and local entities to obtain full licenses, positioning Brazil as a potential top-three global gambling market. In this article, we delve into the performances of major gambling operators in Q4 and explore their strategies for capitalizing on this burgeoning market.

Flutter’s Bold Move into Brazil

Flutter Entertainment’s recent strategic maneuvers illustrate the growing interest in Brazil. The company secured an initial 56% stake in NSX Group, which operates the Brazil-centric Betnacional brand, for $350 million (£271.1 million/€323 million). This acquisition is poised to close in the upcoming quarter, and Flutter is already witnessing promising trends, with a reported constant currency revenue growth of 19% in Brazil during Q4 of 2024.

Despite projecting a $100 million EBITDA loss in 2025 due to launch costs and the NSX acquisition, Flutter’s leadership remains optimistic. Group CFO Rob Coldrake expressed confidence in the company’s ability to thrive in Brazil, noting Betnacional’s position as one of the first to achieve full licensing earlier this year. “We envision a swift market adjustment,” remarked Coldrake, highlighting Flutter’s competitive edge and innovative product offerings.

Entain Sets High Expectations in Brazil for Q4

Entain, a significant player in the gambling sector, reported remarkable Q4 results, with its Sportingbet brand achieving a 41% year-over-year revenue increase in Brazil, buoyed by a 42% rise in active player engagement. The company, which also obtained a full license early in 2024, saw a substantial 65% revenue growth in Q4, attributed to enhancements in its product offerings.

Yet, CFO Rob Wood warned that growth may stabilize in 2025 due to tougher market comparisons and the regulatory landscape. Nonetheless, interim CEO Stella David described the transition to a regulated environment as “relatively smooth” and maintains optimism for sustained growth in Brazil, citing strategic changes that position the company for future success.

Betsson’s Strategic Expansion Across Latin America

While Brazil garners significant attention from operators, Betsson illustrates the potential in a broader LATAM strategy. The company reported a remarkable 46.8% revenue increase in Q4, totaling €78.2 million, with notable growth in Argentina, Colombia, and Peru. This robust performance constituted 26% of Betsson’s total revenue during the quarter.

Adopting a cautious approach to Brazil, Group CEO Jesper Svensson emphasized a focus on Spanish-speaking markets initially, with a gradual increase in investment in Brazil. “We anticipate a competitive landscape,” Svensson stated, advocating for a measured entry that safeguards the company’s profitability.

Rush Street Targets LATAM Expansion

Rush Street Interactive made significant strides in LATAM during Q4, boasting 348,000 monthly active users—a 71% increase year-over-year. The company reported record revenue of $40 million, reflecting a 54% increase compared to the previous year. Core markets for Rush Street include Colombia, Mexico, and Peru, with an eye toward expansion into Brazil, Chile, Ecuador, and Argentina, projecting a total addressable market of $16.1 billion by 2028.

During its earnings call on February 26, CEO Richard Schwartz acknowledged potential M&A opportunities to enhance market share in LATAM, stating, “We are constantly evaluating options that add value for shareholders.”

MGM Resorts International has made headway by establishing a joint venture with Grupo Globo to introduce its BetMGM brand in Brazil. Although the brand’s earnings were not included in Q4 results since it launched in 2024, executives discussed their plans confidently during the February earnings call. CEO Bill Hornbuckle described Brazil as a “significant market opportunity,” aiming for a market share exceeding 10%.

With a dedicated local management team in place, MGM is well-positioned to compete in Brazil, where the total addressable market is estimated at $7 billion. Increased expenditure related to the BetMGM launch is expected to result in consistent EBITDAR losses with those projected for 2024.

Kambi Faces Challenges Due to Colombia’s New VAT

Kambi expressed concerns regarding the implementation of a new VAT in Colombia, which is set to impact future earnings. The supplier reported €176.4 million in total revenue for 2024—a modest 1.8% uptick from the previous year. CEO Werner Becher forewarned of turbulent times ahead due to this VAT, as calculations suggest potential revenue losses of €3 million-€5 million stemming from the new levy.

Codere Struggles with Licensing Challenges in Argentina

Codere Online experienced Q4 growth with net gaming revenue (NGR) totaling €52.6 million—up 4% year-on-year. However, challenges in penetrating the Argentine market persist, primarily due to its complex licensing system, where Codere only holds a license for Buenos Aires and not the surrounding province. Despite these challenges, Codere’s revenue in Mexico increased by 30% year-on-year, totaling €106.6 million across 2024.

In this dynamic gambling landscape, the strategic decisions and operational performances of these companies will be key to navigating growth opportunities, managing regulatory hurdles, and capitalizing on the ever-evolving market conditions. As Brazil and other emerging markets mature, operators must remain agile and innovative to thrive in this competitive environment.