SBC News Voice of the Sports Betting Industry
Our countdown of the most-read stories from SBC Leaders magazine in 2024 begins with Elisa Marcante’s evaluation of the competition between international and local operators in Brazil, which originally appeared in Issue 33.
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As Flutter and MGM Resorts flex their muscles in Brazil, Lívia Troise, CEO of Betmais, Fellipe Eduardo Fraga, Business Director of EstrelaBet, and Andreas Bardun, founder and CEO of KTO, speak exclusively to SBC Leaders the battle for market leadership between Brazil’s operators and increased international competition
International operators have been circling the Brazilian betting and gaming market for a while but the first significant moves became apparent when Fanduel owner Flutter Entertainment was revealed to be in negotiations with Betnacional over an acquisition of the Brazilian operator for a figure believed to be in the region of $1.3bn.
Flutter’s move was closely followed by MGM Resorts announcing an alliance with Rio-based media group O Globo, which will bring the US operator’s BetMGM brand to Brazil.
MGM Resorts CEO and President Bill Hornbuckle said the partnership will help the brand enter the national market more quickly. Like in Canada, MGM has chosen a local solution for the local market. Its LeoVegas subsidiary will power the Brazilian BetMGM, rather than its US jointly venture partner Entain.
Lívia Troise, the Chief Executive Officer of independent Brazilian operator Betmais, is not alone in expecting more. She says she is preparing for a period of “intense activity”.
“The regulation and market reconfiguration we are experiencing should drive consolidation between major players and smaller operations,” says Troise.
She believes the M&A frenzy should benefit the market as a whole, as it will reduce the number of operators and allow the most prepared to remain, which should in turn increase the quality of services and boost investment.
Troise is expecting a period of fierce competition in which smaller brands may struggle to survive. However, the CEO of Betmais believes these smaller operators could benefit from niche markets.
International brands such as Betano and Bet365 have swooped for huge market share but Flutter’s potential purchase price of Betnacional reveals the value and strength of the country’s indigenous brands. So who are the leading independent operators?
Brazil’s leading independents
While you can measure these things in multiple different ways, Flutter target Betnacional is probably the leading independent Brazil-born brand in the market. The very fact that Flutter is chasing it – it tends to go for market leaders – and the reported price of $1.3bn suggest as much.
Merging with Flutter would not be its first strategic move this year. Parent company NSX Group acquired TVBet earlier in 2024. TVBet expanded Betnacional’s coverage in the North East of Brazil, where TVBet is strong.
Like many Brazilian operators, Betnacional is licensed in Curaçao, at least until it gains a Brazilian licence. It sponsors the Campeonato Carioca, and ventured into new segments, becoming the official sponsor of singer-songwriter Seu Jorge and singer Ludmilla.
In just six years, Esportes da Sorte has established itself as Betnacional’s biggest local rival. Located in Pernambuco, in the northeast of the country, the company signed sponsorship agreements with football clubs such as Grêmio FBPA and Sport Club Corinthians Paulista.
Betmais is one of the pioneers of the Brazilian betting market. The São Paulo-based operator was founded in 2014 and holds an operating licence granted by the Government of Curaçao.
In the lead-up to legalisation, the company has increased its marketing investment by 3.4 times and, as a result, achieved a 5.1-fold increase in deposit volume and a 257 per cent increase in monthly active users (MAU).
“The average first time depositors (FTDs) amount is R$500 ($90), well above the Brazilian market average,” says Troise, who says gross gaming revenue has increased by 136 per cent and estimates the operator’s market share at 4 per cent.
EstrelaBet has offices in São Paulo and Belo Horizonte, the capital of Minas Gerais. The platform was launched in 2019 and is another Curaçao-licensed entity. The operator is the official sponsor of Futsal and Beach Soccer for the Brazilian Football Confederation and has signed sponsorship contracts with several clubs, including SC Internacional and Botafogo Futebol Clube.
EstrelaBet CEO Fellipe Fraga says the industry has been undergoing a cultural transformation process: “It’s never a simple path, but it has been successful.”
Fraga says the company has approximately 10m players and more than 400 employees.
Other local brands of note include Bet7k, Brazino777 and Galera.bet.
International operators in Brazil
While the cupboard is not exactly bare beyond the companies mentioned above, the market share of other local operators is likely below 1 per cent. International operators such as Betano, Bet365, Blaze, KTO, Sportingbet and Superbet have emerged as Brazilian market leaders, with all sitting safely within the national top 20 by market share.
Kaizen Gaming International’s Betano brand was the first to apply for a federal licence to operate, submitting its application to the federal government on May 26th of this year.
Betano is the official sponsor of several national and international football clubs and events, including the Brasileirão Betano and Copa América 2024 championships, and Atlético Mineiro football club.
Its marketing muscle has paid dividends across Latin America and it is Brazil’s leading operator on most metrics. According to Similarweb, Betano had 7.2 per cent of Brazilian gambling traffic over the summer of this year. According to Google Trends, it ranked first among betting sites.
Bet365 is almost as well-known to players in Brazil, as it is in its UK homeland. It sits just below Betano in Similarweb’s ranking and on Google Trends’ list of the most visited online betting sites. The platform had a monthly average of 112.4 million visits and a traffic share of 1.72%. Like Betano, the company stood out due to its advertising and SEO efforts, with both brands being regarded as serious and transparent with users.
While the Curaçao-headquartered Prolific Trend is not a Brazilian native, its Blaze brand has gone to all sorts of lengths to prove its legitimacy in the local market and could be a target for international acquirors.
It faced and overcame allegations of actions contrary to national betting regulations. The São Paulo Court of Justice, after finding no irregularities, recognized that Blaze was operating legally and allowed the company to continue its activities in Brazil.
It was founded just five years ago and is one of only five operators to be licensed by the Rio de Janeiro State Lottery, which allows it to operate in Rio de Janeiro state. It is the main sponsor of Santos FC, and counts Brazil’s most famous current player Neymar as a brand ambassador.
Founder and CEO Andreas Bardun launched Malta-based KTO Group in 2018 after a conference exchange with SBC founder Rasmus Sojmark, who told him to stop moaning and form his own company. He did just that with a specific focus on Latin America. Its Brazilian launch came a year later and it has quickly established itself in the top 20.
The company withdrew its betting brand from Chile and Peru in August this year to focus solely on the Brazilian market.
Sportingbet’s prominence in the Brazilian market owes much to the prescient vision of former COO Kenny Alexander. As CEO of GVC Holdings (which would later become Entain under his successor), Alexander also acquired Brazilian bingo and sports betting operator Betboo for just €21m in 2009.
Alexander is long gone but his legacy remains, as Sportingbet sits among Brazil’s leading brands.
Among many subplots in the emerging market, Entain’s head-to-head with its US joint venture partner MGM Resorts (see above) will be an intriguing prospect. With Sportingbet firmly established, Entain has a head start but, as evidenced by its splashy entry in the UK, MGM Resorts is likely to spend big to establish the BetMGM brand in Brazil.
Brazil vs the Rest of the World
Predicting how the native brands perform against international competition is a complex task, admits Troise, but the precedents in other markets are good.
The Betmais CEO claims national betting companies have more extensive knowledge of the market, and this could be an important differential in competition with global operators. She also believes the Brazilian companies may become “more agile and flexible in responding to local needs”.
However, she acknowledges that few can match the scale, know-how, and financial resources of a Bet365 or Betano. She is not alone in highlighting the importance of data analysis, artificial intelligence and personalisation as keys to improving local products but also highlights the creation of “an integrated betting ecosystem”.
In essence, she is talking about expanding the portfolio beyond sports betting and into casino games, lottery products, poker, esports, and more.
“This could also be an important strategy for retaining bettors and increasing the average ticket,” says Troise and each product will have a particular local flavour that niche operators might be able to find.
EstrelaBet’s Fraga says: “The most crucial aspect for the future is the organisation of national operators to adopt a leadership stance and actively participate in market development.”
To this end, Troise says the industry needs to step up and improve its advertising. As with other newly-regulated markets, the issue of advertising will be of huge importance during the early stages of Brazil’s new regime.
Troise states: “We need to conduct educational campaigns explaining how the rules work, best practices, and the risks involved in the industry. All of this is essential to promote a healthier and more responsible betting environment.”
Fraga says regulation of the market will have a big impact on all brands operating in Brazil and that success will depend on how well local operators adapt to it and innovate to remain competitive. He says: “Local operators will strengthen international partnerships, generating new innovation tools and human resource development capable of supporting the local industry.”
KTO founder Bardun sees this as a key battleground, where finding experienced staff in a new industry will be a challenge. He encourages young Brazilians to look to the betting and gaming industry for career opportunities.
Troise is confident that experience counts. She cannot see a new entrant matching an operator that has been in the market for 10 or 20 years, as many of those mentioned in this article. However, we have seen rapid growth from the likes of KTO and EstrelaBet. The latter’s Business Director Fraga emphasises the possibility of new market leaders emerging over the next few years.
All agree there will be consolidation and none would count themselves out from being involved in that process.
Bardun says: “We are exploring partners, joint ventures and also launching our own second brand but no decision has been made as of yet. Our growth strategy is what it has always been, we are working relentlessly and we were always the underdogs that kept on coming.”
“The next decade will be challenging but also fascinating,” asserts Troise. “The brands that manage to adapt to changes, innovate, and understand consumer needs will be the big winners.”
In turn, Bardun emphasises that the market is open and “ready for players who want to take advantage of opportunities, whether local or global”.
The KTO CEO believes that the Brazilian betting market will always be vibrant and competitive: “If we keep growing and innovating, I’m sure Brazil will become a key market in the global betting industry.”
