Entain expecting Brazil growth to level out

Entain Anticipates Steady Growth Amid Regulatory Changes in Brazil’s Gambling Market

Entain has reported a remarkable 48% year-on-year revenue growth in Brazil, as highlighted in its Q3 trading update. This performance marks the second consecutive quarter of such robust growth, following similar gains in Q2. Chief Financial Officer Rob Wood describes this surge as the “headline grabber” of the company’s Q3 results. With the anticipated launch of the legal online sports betting and iGaming market set for January 1, 2025, Brazil is poised to play a pivotal role in Entain’s strategic roadmap.

Currently, Entain operates in Brazil under its Sportingbet brand. The company is among the 98 enterprises authorized to conduct business during the transitional regulatory phase from October 1 to December 31, 2024. If Entain secures federal authorization from the Secretariat of Prizes and Bets (SPA), it will continue its operations in Brazil beyond 2025.

Despite these ambitious growth plans, Wood cautions that the introduction of a regulated market will lead to a deceleration in growth rates. “Growth from Brazil in 2025 is likely to be much more moderate,” Wood informed analysts during the Q3 earnings call on October 17. “However, it’s clear that Brazil is an absolutely vital market for us.”

Entain to Enhance Marketing Investments in Brazil

As Brazil gears up to become a competitive battleground for the global gambling giants, with entities such as Betano and Caesars Sportsbook entering the fray alongside established local brands like Rei do Pitaco and Esportes da Sorte, Entain recognizes the importance of increasing its marketing spend. Wood noted that the company is devising strategies to effectively reach Brazilian bettors, with an anticipated rise in marketing expenditures set for 2025.

“We’re evaluating the optimal level of our marketing budget, which will undoubtedly increase from 2024,” Wood explained. “We expect to see one or two significant new entrants or amplified marketing budgets from existing formidable competitors.”

The strong return on investment in Brazil has prompted Entain to ramp up its marketing investments for the current year. “Brazil is a market we intend to compete in and excel within,” he emphasized.

To enhance its appeal to local bettors, Entain has deployed a dedicated team in Brazil, focused on localization and a comprehensive product offering. Wood elaborated, “Sameer [Deen, Entain’s Chief Commercial Officer and President] has discussed our initiatives, such as optimizing withdrawal payment processes, enriching our game content, and ensuring the availability of popular local games like Aviator. Our front-end capabilities have significantly improved, benefiting from advancements associated with BetMGM.”

Regulatory Landscape in Brazil’s Gambling Market

As the launch of Brazil’s legal gambling market approaches, scrutiny of the sector has intensified, particularly concerning regulatory measures surrounding advertising and payment methods. Concerns have been raised about a possible postponement of the January 1, 2025 launch date.

Nonetheless, Entain’s CEO, Gavin Isaacs, remains optimistic about the timeline, asserting the company’s alignment with existing regulations. “We do not anticipate any delays, and we advocate for a well-structured regulatory environment,” Isaacs stated. “Our operations thrive under regulatory frameworks, which we view as advantageous.”

Wood concurred, adding, “Many of the proposed measures appear sensible from our viewpoint—such as the banning of credit cards and ensuring that advertising sufficiently highlights responsible gambling practices. These aspects seem relatively straightforward and are aligned with our business ethics.”

In conclusion, as Brazil transitions to a regulated gambling market, Entain is strategically positioned to leverage its existing brand presence and enhance customer engagement through increased investment in localized marketing initiatives while adhering to forthcoming regulatory standards.