M&A has already proven attractive to international operators as an efficient entry into the market
Flutter is one such company, last year agreeing to acquire an initial 56% stake in NSX Group, operator of the Brazil-facing Betnacional brand, for US$350 million. That deal is expected to close next quarter, but the company is already observing positive signs in Brazil, experiencing constant currency revenue growth of 19% in the market over Q4 2024.
Flutter expecting US$100 million Brazil hit in 2025
The company did warn it was expecting a US$100 million EBITDA loss in Brazil this year relating to its launch and the NSX acquisition. Although Flutter’s group CFO Rob Coldrake was confident in the business’ future in Brazil, especially with Betnacional among the first to gain a full licence in January.
“We think the market will start to shake out quite quickly,” Coldrake said during the post-results call on 5 March.
“But I think given our track record, given our capabilities, given our products, we are very confident in our ability to succeed in the Brazilian market and we’re very excited to get started with NSX.”
CEO Peter Jackson revealed the company would continue to seek out M&A opportunities, saying: “We’ve got this US$1 billion of share repurchase this year. So M&A will continue to be an important part of our strategy, but we have to make sure it’s the right opportunities for us in terms of delivering the right financial returns.”
Entain’s Brazil expectations exceeded in Q4
Entain and its Sportingbet brand achieved impressive results during the quarter, reporting revenue growth of 41% year-on-year in Brazil for the full year, aided by active player growth of 42%.
Sportingbet is another brand that gained a full licence early on.
Speaking to analysts during their earnings call on 6 March, interim CEO Stella David and CFO Rob Wood said they were bullish on the company’s hopes in Brazil, particuarly following updates to the product offering, which powered it to revenue growth of 65% in Q4.
Wood did caution that Entain’s growth in Brazil will level out in 2025 as comparisons get harder and the market adjusts to the new regulations.
David described Entain’s transition to regulation in Brazil as “relatively smooth”, however, and she is confident the company will continue to grow in that market.
“We now believe that with the changes we’ve made, we are well positioned to have strong growth going forward with our focused leadership teams and our improved and improving offering,” CEO Stella David said.
Betsson making strides across LatAm in Q4
While Brazil is the key focus for many operators in LatAm, European operator Betsson is taking a broader look at the region.
LatAm was Betsson’s largest growth segment in 2024 and ranked second in terms of market-by-market revenue.
Growth in Argentina, Colombia and Peru led Betsson to LatAm revenue growth in Q4 of 46.8% to €78.2 million, an all-time high for the company. It made up 26% of total revenue in Q4.
The company is taking a cautious approach in Brazil. Group CEO Jesper Svensson previously told iGB the company would focus predominantly on Spanish-speaking markets in the short-term, with investment in Brazil to increase over time.
Betsson AB CEO Pontus Lindwall echoed Svensson’s thoughts in its post-results earnings call on 6 February, telling analysts: “We foresee a competitive landscape. We want to enter that market in a slow fashion and analyse and learn. We don’t want to risk any part of our P&L and our profitability by going all-in in that market. So we will do a slow start during the year here in Brazil.”
Rush Street sets its sights on LatAm expansion
In Q4, Rush Street Interactive achieved 348,000 monthly active users in LatAm, up 71% year-on-year. It reported record revenue of US$40 million for the quarter in in the region, a 54% jump compared to the same period of last year.
The company listed Colombia, Mexico and Peru as its existing core markets, though interestingly the company also noted expansion opportunities into Brazil, Chile, Ecuador and Argentina with a potential total addressable market (TAM) in LatAm of US$16.1 billion by 2028.
When asked about potential M&A opportunities on its earnings call on 26 February, CEO Richard Schwartz suggested the company may look to that as an option to grow its LatAm market share.
“We’re actively assessing and considering options all the time,” Schwartz declared. “It’s what you have to do in our business, and we have a very clear focus on sort of line of sight that we have a profitable business in our company."
“We do have opportunities to improve it in Latin America potentially. We’re looking at options, bolt-on opportunities, anything that can add value for the shareholders.”
MGM eyeing 10% market share in Brazil
In August last year, MGM Resorts International established a joint venture with Grupo Globo, the largest media group in LatAm, to launch its BetMGM brand in Brazil.
While the brand has only launched in Brazil this year, meaning earnings were not reported in Q4, the 13 February earnings call saw executives give more detail on the company’s plans in the market.
CEO Bill Hornbuckle described it as a “significant market opportunity” while Gary Fritz, president of MGM Resorts International Interactive, said the company felt it would be competitive in Brazil with plans for a market share exceeding 10%.
“We’ve built a local management team on the ground in Brazil,” Fritz revealed. “It’s a US$7 billion TAM, we believe, in Brazil, and we’re excited to compete there on a level playing field.”
Increased spending related to the launch of BetMGM in Brazil will result in MGM Digital’s 2025 EBITDAR losses remaining relatively consistent with those in 2024.
The operator will be powered by the recently-purchased Tipico US platform and will report Brazil earnings via its digital segment which also includes LeoVegas’ BetMGM operations in Europe and the UK.
Colombia VAT a headwind for Kambi
Finally, Kambi said it expects the new VAT levy in Colombia to impact upcoming earnings.
The supplier’s total revenue for 2024 was €176.4 million, a 1.8% increase on the year prior, and CEO Werner Becher warned there could be tricky times ahead.
While this largely stemmed from partners such as Kindred and LeoVegas migrating away from Kambi’s turnkey sportsbook, Becher also highlighted the new temporary VAT on gambling in Colombia, which will be charged at a rate of 19% on deposits until the end of 2025.
Kambi’s Q4 results read: “Due to our market-leading position in Colombia, we estimate the levy will negatively impact revenue, and therefore also EBITA (acq), by €3-5 million.”
Codere hits a wall in Argentina
Elsewhere, Codere Online posted net gaming revenue (NGR) growth of €52.6 million in Q4, up 4% year-on-year. Though the company flagged it was struggling to penetrate the Argentina market.
Codere Online CEO Aviv Sher revealed Argentina’s regional licensing system was causing issues, with the company only holding a licence for the city of Buenos Aires, and not the province.
Despite its Argentina struggles, Codere Online’s revenue in Mexico was up 30% year-on-year across 2024, reaching €106.6 million. In Q4 NGR was up 10% to €22.8 million in the Central American region.
Source: iGB (by Kyle Goldsmith)
