Operators prepare for Brazil launch

As the gambling sector reveals its Q3 performance metrics, iGB delves into how operators navigated the Brazilian landscape and their future strategies in this promising market.

With Brazil poised to officially launch its regulated sports betting market on January 1, 2025, Flutter Entertainment is strategically positioning itself to make a notable impact.

In September, Flutter took a significant step by announcing its acquisition of a 56% stake in NSX Group, the operator behind the popular Brazilian brand Betnacional. The deal, valued at $350 million (£266.5 million/€316 million), underscores Flutter’s commitment to establishing a strong foothold in Brazil.

For the nine months ending September 30, Flutter reported a 4% increase in year-over-year revenue from Brazil. During the earnings call that followed their Q3 results announcement, CFO Rob Coldrake expressed enthusiasm about the imminent market launch.

“We possess a solid strategy for Brazil,” Coldrake stated, highlighting Flutter’s growth with its existing brands. “The acquisition of NSX is an exciting development for us.”

This acquisition will lead to the creation of a new entity, ‘Flutter Brazil,’ which will integrate Flutter’s established Betfair brand with NSX Group’s offerings, including Pagbet, MrJack.bet, and Betpix.

“We believe this positions us effectively to leverage the opportunities within Brazil’s dynamic market, and as discussed at our Investor Day, we are eager to invest in this brand in 2025,” Coldrake added.

Entain Expects Brazil Growth to Stabilize Post-Launch

Nevertheless, the burgeoning legal market will introduce a new wave of competition for established players. Entain’s CFO Rob Wood anticipates that the rapid growth experienced in Brazil will decelerate once the market officially opens its doors.

In its Q3 trading results, Entain reported an impressive 48% boost in revenue from Brazil, a continuation of similar growth observed in Q2. Wood characterized this achievement as a “headline grabber,” reflecting a significant operational turnaround and establishing Brazil as the fastest-growing sector for the company.

However, Wood provided a note of caution regarding future growth, indicating that the legal market launch will come with stringent regulations, particularly affecting marketing strategies.

During a conference call on October 17, Wood remarked, “While we see Brazil as a critical market for us, growth is likely to moderate post-launch in 2025 due to these regulatory changes.”

Entain is currently operational in Brazil under the Sportingbet brand, part of a group of 223 entities approved to operate as the country transitions to a fully regulated environment next year.

MGM Poised for Launch in Brazil in January

MGM Resorts CEO Bill Hornbuckle has indicated that BetMGM aims to enter the Brazilian market in January, pending licensing approval.

This follows MGM’s recent strategic alliance with Grupo Globo, the largest media conglomerate in Latin America. Hornbuckle noted that the partnership would be instrumental to their success in Brazil.

“This collaboration is significant as it allows MGM to leverage LeoVegas technology and access 70 million consumers, providing critical insights into Brazil’s betting landscape,” Hornbuckle stated during the Q3 results call on October 30. “This aligns with our broader strategy to expand our global digital footprint and tap into emerging markets.”

While partnerships between gaming operators and media outlets have seen varied success, Hornbuckle expressed confidence in this agreement.

“This is not a typical sponsorship arrangement; it is an equity partnership,” he clarified. “Grupo Globo has invested advertising dollars in exchange for equity, and we believe their extensive reach, controlling approximately 80% of the viewership in Brazil, will enhance our competitive stance.”

Rush Street Interactive Takes a Cautious Stance on Brazil

As leading operators vie for dominance in Brazil, Rush Street Interactive (RSI) is adopting a more measured approach. During their Q3 results presentation, RSI identified Brazil as a potential market for expansion while maintaining a presence in other profitable Latin American jurisdictions, including Mexico, Colombia, and Peru.

Following a successful Q3, where monthly active users in the region rose 122% year-on-year to 329,000 and revenue nearly doubled, CEO Richard Schwartz emphasized a cautious strategy toward entering Brazil.

“We see immense long-term potential in Brazil, but we are taking a wait-and-see approach to thoroughly assess the opportunity relative to other options,” Schwartz stated during the conference call on October 30. “We will continue to monitor developments and will re-engage when new insights emerge.”

Super Group Retreats While Betsson Continues to Grow in LatAm

In Q3, Betsson reported record revenues for the second consecutive quarter, showcasing a 34.2% growth in Latin America, translating to €69.4 million, primarily driven by casino operations in Colombia, Peru, and Argentina. Betsson is currently pursuing a license in Brazil and operates under the Betsson.com domain during the transition period.

While numerous operators prepare for Brazil’s market launch, Super Group’s Betway has opted to withdraw from the licensing process, joining more than 20 others in this decision. Super Group’s President and CCO Richard Hasson stated their focus is on markets that offer a clearer path to profitability.

“Brazil is currently a hot topic, but we’re not moving forward there aligned with our broader strategic goals,” Hasson articulated.

On a positive note, Kambi CEO Werner Becher expressed optimism regarding the “exciting opportunities” for their turnkey sportsbook in Brazil, as they anticipate launching early next year after securing a partnership with KTO to replace a previous supplier.