(Image: iStock/ Hirug)
The biggest movement in the online betting It's happening far away from the public eye. With just a few months to go into effect, the regulation of calls bets accelerated the process of mergers and acquisitions and, according to estimates from the large banks involved in the negotiations, somewhere between 15 and 20 brands should change hands by January 2025, from when only companies accredited by the federal government will be able to operate in the Brazilian market. An example of this movement took place last week, when the American Flutter paid almost R$2 billion for a 56% stake in the Brazilian NSX, owner of the Betnacional brand.
But it is unlikely that any new business will repeat such an astronomical sum. Because there are few large companies available on the market. “I would say that we ended this year with between R$150 million and R$200 million in mergers and acquisitions in this sector”, calculates André Santa Ritta, associated with the Pinheiro Neto Advogados firm, in an account that does not consider the billion-dollar business. This year alone, the lawyer advised on four merger operations in this area. And there are two or three more in progress, according to him.
Santa Ritta informs that this movement began at the end of 2023, when the law that regulates betting in Brazil was approved. “And this consolidation process should intensify next year, with the imposition of a series of requirements for anyone who wants to operate in the country. “The Brazilian market is quite fragmented. There is talk of up to 2 thousand bets operating throughout the country. With the new regulations, there will be an increase in operating costs as there are a series of governance policies that need to be met.
Acquisition of brands and players
Flutter is not the only foreigner looking for Brazilian partners. The British Playtech, listed on the London Stock Exchange, is one of the largest suppliers of technology for online gaming in the world – it operates in 19 countries, has more than 7 thousand employees – and also operates in B2C. That's why the company spent US$5 million to buy 40% of the Brazilian Ocean 88 Holdings, owner of the Galerabet brand.
Money doesn't seem to be a problem for Playtec – last year revenue in the B2B division was 684 million euros and adjusted EBITDA was 182 million euros, while in the B2C division Playtech's revenue amounted to 1.037 billion euros and adjusted EBITDA of 250 million euros -, shortly after the purchase of Galerabet, the British company financed the purchase of two other brands: F12, from former futsal player Falcão, and Inovabet, from influencer Luva de Pedreiro. Both operate in the Pernambuco market. Buying local operators is important not only to enter regional markets, but also to expand the customer base.
Business goes beyond marking territory with brands in the national market. Débora Sejtman Gartner, partner in the M&A area at Demarest, reports that there is great movement in the financial market. The race is on to see who is responsible for the receipts and payments of bets. According to the law approved in Brazil, only entities authorized by the Central Bank can carry out these operations. “Before regulation, these transactions were made from any country – the most common being Malta and Curaçao – since there are several online gaming operators with operations outside Brazil”, explains Gartner.