Entain anticipates growth slowdown in Brazil’s legal market

Bruna Garcia October 22, 2024

Entain, a leading global sports betting and gaming group, is bracing for a potential slowdown in its rapid growth in Brazil following the anticipated launch of the regulated market in January 2025. Despite reporting a substantial 48% year-on-year revenue increase in Brazil during its Q3 trading update last Thursday (17), the company’s CFO, Rob Wood, has indicated that the market’s expansion will likely moderate once the legal framework takes effect.

Entain’s presence in Brazil is already significant, with its Sportingbet brand among the 98 companies currently authorized to operate during the regulatory transition period – between October 1st and December 31st. The company is actively seeking federal authorisation with the Secretariat of Prizes and Bets (SPA) to continue its operations in the country beyond 2025.

However, Wood acknowledged that the introduction of new regulations, including potential restrictions on marketing, will likely impact user behaviour and, consequently, the company’s growth trajectory. “Growth from Brazil in 2025 is likely to be much more moderate,” he stated during the Q3 earnings call. “But clearly Brazil is a really important market for us.”

Despite the anticipated slowdown, Entain remains committed to Brazil as a strategic market. The company is actively exploring ways to enhance its marketing efforts and appeal to Brazilian bettors, recognizing the increasing competition from both domestic and international rivals.

More money in marketing to compete in Brazil

Entain is considering a significant increase in its marketing spend for 2025 to effectively compete in the Brazilian market. Beyond marketing, Entain is focusing on other key areas to attract Brazilian bettors. The company is leveraging its local team and investing in product localisation to cater to the specific preferences of Brazilian consumers.

While the legal market in Brazil is eagerly anticipated, there have been growing concerns regarding certain regulatory measures, such as advertising restrictions and payment limitations. Some industry observers have expressed concerns that these measures could lead to delays in the market’s launch.

However, Entain’s CEO, Gavin Isaacs, remains optimistic about the January 1st, 2025 launch date, expressing confidence in the current regulatory framework. “We don’t expect there to be a delay, but we do encourage regulation,” Isaacs said. “We are fully regulated and that’s what we operate best in.”

Wood echoed this sentiment, stating that Entain generally supports the proposed regulatory measures, including restrictions on credit card usage and advertising requirements.

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