For years, the gaming industry has been waiting for Brazil, the 'sleeping giant', to finally open its doors as a regulated market. This is about to become a reality on January 1st, and with most of the gaming industry having published their third-quarter results, iGaming Business (iGB) examines how operators have performed in the region and their plans for the future there.
Brazil will launch its legal betting market on January 1, 2025, and one operator hoping to make a real impact in the market is the giant Flutter Entertainment.
In September, Flutter announced that it had agreed to acquire an initial 56% stake in NSX Group, which operates the Brazil-focused Betnacional brand. The deal is worth $350 million.
For the nine months ended September 30, Flutter reported an annual revenue growth in Brazil of 4%. In its earnings call following the third-quarter results release, CFO Rob Coldrake spoke about the operator's excitement about the market opening.
"We are very confident about our approach in Brazil," Coldrake told reporters. "We have grown with our brands that we already have there. We are very excited about the NSX acquisition.”
The acquisition of NSX will create a new business "Flutter Brasil", which will combine Flutter's existing Betfair brand with the Pagbet, MrJack.bet, and Betpix skins from NSX Group.
"We feel this gives us the ability to really move forward in Brazil and invest in this brand in 2025, as we outlined on Investor Day, it's something we are planning to do and really capitalize on what we see as a very exciting market with lots of opportunities".
Entain anticipates that Brazil's growth will stabilize after the success of the third quarter
However, the launch will bring a wave of new competition to the market incumbents. Entain's CFO, Rob Wood, for example, expects that the rapid growth in Brazil will slow down once the legal market comes into operation in the New Year.
In its third-quarter business results, Entain recorded an annual revenue growth in Brazil of 48%, having also achieved this figure in the second quarter. The success in the country was described by Wood as the "headline" of Entain's third-quarter results. This follows a major operational turnaround, becoming its fastest-growing market.
However, Wood warned that growth in Brazil would slow down for Entain after the market launch. The launch brings with it stringent regulations, including new controls for marketing.
Wood told analysts on a call on October 17: "Growth in Brazil in 2025 will likely be much more moderate. But clearly, Brazil is a really important market for us.”
Entain is currently active in Brazil with Sportingbet, one of the 223 currently approved to do business in the country by the end of 2024 as part of the transition period.
MGM expects launch in Brazil in January
MGM Resorts' CEO and president, Bill Hornbuckle, expects BetMGM to launch in Brazil in January, if it receives a license.
This follows MGM's entry into the third quarter in a strategic venture with Brazil-based Grupo Globo, the largest media group in Latin America. BetMGM's ability to leverage this media presence will be vital for the business's success in Brazil, said Hornbuckle.
"This venture is significant as it allows us to leverage MGM's LeoVegas technology and gain access to 70 million people, providing invaluable insights into the Brazilian consumer market", explained Hornbuckle during MGM's third-quarter earnings call on October 30. "This aligns with a broader strategy to expand our digital footprint globally and explore emerging markets".
Partnerships between operators and media companies have had mixed results lately, but Hornbuckle feels this venture is different.
"This is not a standard sponsorship deal, this is really a capital deal", explained Hornbuckle. “They [Grupo Globo] invested advertising dollars for capital. We love Globo as a partner and its scale. It literally controls about 80% of the eyes in Brazil. And we think our product offering will be substantial and significant”.
Rush Street Interactive adopts a cautious approach to Brazil
With a number of high-profile operators looking to make their mark in Brazil, Rush Street Interactive (RSI) is taking a more patient approach to the market.
Brazil was listed by RSI as a market for “potential expansion” in its third-quarter results, with the business already active in other Latin American markets of Mexico, Colombia, and Peru. Other markets RSI is considering for expansion include Ecuador, Chile, and Argentina.
It is also having success in the region, with RSI's CEO, Richard Schwartz, revealing on a third-quarter results call that monthly active users (MAUs) increased 122% year-over-year to 329,000 in Latin America, while revenue was nearly double that of the same period last year.
Despite these achievements, Schwartz and RSI are not rushing into Brazil. “Brazil is a really exciting long-term market”, he told analysts on October 30. “And while we appreciate the long-term opportunity it presents us, we continue to take a cautious wait-and-see approach as we really want to assess the opportunity against all the other opportunities we are also considering”.
"So, I think at this point, we will continue monitoring, tracking, and will return when there is something new to share”.
Super Group withdraws Betway from Brazil, Betsson observes growth in Latin America
Betsson achieved record revenue for the second consecutive quarter in Q3, driven by growth in regions such as Latin America and Western Europe.
In Latin America, Betsson's revenue increased 34.2% to a record €69.4 million, driven by the casino in markets such as Colombia, Peru, and Argentina. Betsson has applied for a license in the legal Brazilian market and is already active in the transition period with its domain betsson.com.
Many operators are gearing up for the launch in Brazil, but one candidate that has dropped out of the process is Super Group's Betway, which is one of at least 20 that have withdrawn.
In the post-Q3 results call on November 6, Super Group's president and CCO, Richard Hasson, explained that the operator was focusing on other markets, where it can chart a path to profitability.
"Brazil is obviously being talked about a lot across the industry right now", said Hasson. "This is a market where we are not currently proceeding in line with all the markets we are observing".
Meanwhile, Kambi's CEO, Werner Becher, described the "exciting opportunities" for the supplier's turnkey sportsbook in Brazil, where it expects to be operational early next year.
Kambi has already taken over a partnership with operator KTO from a competing supplier in Brazil.
Source: iGB
