Most gambling companies have already released their Q4 earnings, and iGB has studied the performance and future strategies of operators in the region.
Brazil launched its regulated online gambling market on January 1, with some listed international giants obtaining comprehensive licenses alongside local operators, entering a market expected to become one of the top three globally.
Mergers and acquisitions have shown attractiveness to international operators as an effective way to enter the market.
Flutter is one such company, which last year agreed to acquire an initial 56% stake in NSX Group (operator of the Betnacional brand targeting Brazil) for $350 million (£271.1 million/€323 million).
The deal is expected to be completed next quarter, but the company has already seen positive signs in Brazil, with currency revenue in Q4 2024 growing by 19%.
Flutter expects the Brazilian market to reach $100 million by 2025
The company indeed warned that due to its launch and acquisition of NSX, it expects an EBITDA loss of $100 million in Brazil this year. However, Flutter Group CFO Rob Coldrake is confident about the business's future in Brazil, especially since Betnacional was one of the first companies to receive a comprehensive license in January.
"We think the market will start to shake soon," Coldrake said in a post-earnings call on March 5.
"But I think, given our performance, capabilities, and products, we are very confident in our ability to succeed in the Brazilian market, and we are very excited to start NSX."
CEO Peter Jackson revealed that the company will continue to look for M&A opportunities, saying, "This year we have already repurchased $1 billion of stock.
"Therefore, M&A will continue to be an important part of our strategy, but we must ensure it is the right opportunity that can bring the correct financial return for us."
Entain exceeds expectations in Q4, achieving forecasts in the Brazilian market
Entain and its Sportingbet brand achieved remarkable performance this quarter, reporting that annual revenue in Brazil grew by 41% year-over-year, with active players increasing by 42%.
Sportingbet is another brand that obtained a comprehensive license early on.
Interim CEO Stella David and CFO Rob Wood expressed optimism about the company's prospects in Brazil to analysts in an earnings call on March 6, especially after product updates, which drove a 65% revenue increase in Q4.
Wood did warn that growth in Brazil for Entain would stabilize by 2025 as comparisons become more challenging and the market adjusts to new regulations.
However, David stated that Entain's regulatory transition in Brazil has been "relatively smooth," and she believes the company will continue to grow in the Brazilian market.
"We now believe that, with the changes we have made, under the leadership of our focused team and continuously improving products, we have the capability to achieve strong growth," David said.
Betsson makes progress in Latin America in Q4
While Brazil is a key focus for many operators in Latin America, European operator Betsson has set its sights on a broader area of the region.
Latin America was Betsson's largest growth area in 2024, ranking second in market revenue.
Growth in Argentina, Colombia, and Peru led to a 46.8% increase in Latin American revenue for Betsson in Q4, reaching €78.2 million, a new high for the company. Latin American revenue accounted for 26% of total revenue in Q4.
The company is cautious in Brazil. Group CEO Jesper Svensson previously told iGB that the company would initially focus on Spanish-speaking markets and gradually increase investment in Brazil.
Betsson AB CEO Pontus Lindwall expressed the same view at an earnings release on February 6, telling analysts, "We foresee the competitive landscape. We want to enter the market slowly, analyzing and learning.
"We do not want to risk any profits and profitability by investing all our funds in the market. Therefore, our start in Brazil this year will be relatively slow."
Rush Street focuses on Latin American expansion
In Q4, Rush Street Interactive's monthly active users in Latin America reached 348,000, a 71% year-over-year increase.
The company reported that revenue in the region reached a record $40 million this quarter, a 54% increase from the same period last year.
The company lists Colombia, Mexico, and Peru as its existing core markets, but interestingly, it also pointed out opportunities for expansion into Brazil, Chile, Ecuador, and Argentina, with the potential total addressable market (TAM) in Latin America reaching $16.1 billion by 2028.
When asked about potential M&A opportunities during an earnings call on February 26, CEO Richard Schwartz said the company might consider this as an option to expand its market share in Latin America.
"We have been actively evaluating and considering various options," Schwartz said, "This is something we must do in our business, and we are very clear about focusing on ensuring the company's profitability."
"We indeed have opportunities to improve the situation in Latin America. We are looking for various options, additional opportunities, and anything that can add value for shareholders."
MGM targets 10% market share in Brazil
Last August, MGM Resorts International formed a joint venture with Grupo Globo, Latin America's largest media group, to launch its BetMGM brand in Brazil.
Although the brand was only launched in Brazil this year, meaning Q4 earnings have not yet been reported, executives detailed the company's plans in the Brazilian market during an earnings call on February 13.
CEO Bill Hornbuckle described this as a "significant market opportunity," and Gary Fritz, President of MGM Resorts International Interactive, stated that the company believes it is competitive in Brazil and plans to capture more than 10% of the market share.
"We have already formed a management team locally in Brazil," Fritz revealed. "We believe the potential market size in Brazil is $7 billion, and we are excited to compete in a fair competitive environment."
The increased spending associated with the launch of BetMGM in Brazil will lead to an EBITDAR loss for MGM Digital in 2025, consistent with 2024.
The operator will be supported by the recently acquired Tipico US platform and will report Brazilian revenue through its digital division, which also includes LeoVegas's BetMGM business in Europe and the UK.
Colombian VAT poses a challenge for Kambi
Finally, Kambi stated that it expects the new VAT imposed on gambling in Colombia to impact future earnings.
The supplier's total revenue in 2024 was €176.4 million, a 1.8% increase from the previous year, and CEO Werner Becher warned of potential difficult times ahead.
While this is mainly due to partners like Kindred and LeoVegas no longer offering Kambi's turnkey sports betting, Becher also emphasized Colombia's new temporary VAT on gambling, which will impose a 19% tax rate on deposits until the end of 2025.
Kambi's Q4 performance showed: "Due to our leading market position in Colombia, we estimate this tax will have a negative impact on revenue, and thus EBITA (earnings before interest, taxes, and amortization) will also decrease by €3 million to €5 million."
Codere faces setbacks in Argentina
Additionally, Codere Online reported Q4 net gaming revenue (NGR) growth of €52.6 million, a 4% year-over-year increase. Despite this, the company indicated that it is struggling to enter the Argentine market.
Codere Online CEO Aviv Sher revealed that there are issues with the regional licensing system in Argentina, and the company only holds a license for the city of Buenos Aires, not the province.
Despite difficulties in the Argentine market, Codere Online's revenue in Mexico still grew by 30% year-over-year in 2024, reaching €106.6 million. In Q4, Central America's NGR grew by 10%, reaching €22.8 million.
