Flutter, the owner of Australian online gambling operator Sportsbet, is expanding its wagering footprint in Brazil.
Recognised as the world’s largest online betting company, Flutter has announced it will buy a 56 per cent stake in NSX Group.
NSX operates the Brazilian gaming group Betnacional and Flutter will pay around $US350 million to merge it with its existing brand Betfair Brazil.
The move confirms Brazil as the next frontier for the world’s leading wagering companies as the country prepares for a fully regulated wagering betting landscape early next year.
Sports betting was legalised in Brazil in 2018 but the prospect of regulation is creating a flurry of business and potential deals.
Prominent brands such as bet365 and Betano have also made aggressive expansion moves in the country.
“The transaction fully aligns with Flutter’s strategy to invest in leadership positions in international markets, securing a podium position for Flutter on completion in the regulating and fast-growing Brazilian market,” Flutter said in a statement.
It described the deal as a “compelling acquisition” because most of the growth in sports betting has been delivered by locally focused brands in Brazil.
Flutter expects consolidation in a fully regulated Brazilian market will benefit established operators due to the associated tax, licensing and compliance costs.
Flutter is adopting a similar strategy to the one it has employed in the United States to capture market share and growth.
It is now the No.1 online wagering operator in America, operating FanDuel, a sports fantasy gaming platform run in unison with a sportsbook.
NSX has a 12 per cent share of the sports betting market in Brazil.
Warwick Barr
Flutter says NSX is expected to generate revenue of around $US256 million in 2024 - more than three times that of Betfair Brazil - returning a core profit of around $US34 million in 2024.
Under the terms of the deal, Flutter will be able to increase its shareholding in NSX after five and 10 years.
It anticipates the new Flutter Brazil company to lose around $US90 million-$US100 million in 2025 due to its investment drive.
Flutter switched from a secondary to primary New York Stock Exchange listing earlier this year, projecting that it will generate almost 40 per cent of its revenues from its US operations in 2024.
Warwick Barr
In Australia, Sportsbet reported a 10 per cent revenue decline during the second quarter of 2024.
In the three months to June 30, Flutter said its Australian operation’s revenue dropped by $US40 million year-on-year.
That followed a trend from the first quarter of 2024, which saw a six per cent decline compared to the same quarter in 2023.
But globally, Flutter remains an industry leader with $US11.8 billion revenue internationally for 2023 - up 25 per cent year-on-year- and $US3.6 billion worldwide for the quarter ended June 30, 2024.
