Kambi: Brazil's sharp bettors, low channeling slow profitability
Werner Becher, CEO of the sports betting provider, cooled excessive enthusiasm about the Brazilian market during his appearance at ICE. The executive warned that the mathematical sophistication of local players is putting much more pressure on profit margins than in Europe.
The first year of legal betting in Brazil has brought a dose of reality to the industry. While many operators expected a massive wave of recreational players, the on-the-ground experience has proven to be more complex and costly. Werner Becher, CEO of Kambi, acknowledged that the growth of their partners in the country during the third quarter did not meet initial expectations.
In exclusive statements to iGB during the ICE fair, Becher identified a critical factor that is eroding profitability: the player profile. Unlike other South American markets where leisure predominates, Brazil has an unusually high proportion of sophisticated or "sharp" bettors. These users do not bet out of passion for the team but use statistical models to find value and systematically make money, which forces operators to invest much more in risk management and trading.
The profile of the Brazilian bettor: Less leisure, more arbitrage, and pressure on the margin
Kambi’s diagnosis reveals a significant operational challenge. According to Becher, the number of casual bettors is much lower than projected, while the volume of aggressive players is high. This means that bookmakers face constant pressure on their hold margins, as they must pay out winnings more frequently to users who know how to exploit odds inefficiencies.
"Player profiling and risk management are much more important here than in Europe," explained the executive. This phenomenon forces platforms to tighten their betting limits faster, which in turn frictionally affects the user experience. Added to this is that estimates about the total addressable market (TAM) were inflated, fueled by investor euphoria that did not consider the technical barriers to entry.
Channeling and inflated estimates: The challenge of competing against the offshore market
Another factor that slowed progress was the "channeling rate," that is, the percentage of players migrating from the illegal to the regulated market. Becher admitted that this figure is lower than expected.
Industry experts point out that the tax structure of Law 14.790/23 is one of the causes. The 15% tax on player winnings (IRPF) exceeding a certain threshold acts as a disincentive, pushing "professional" users—precisely those Kambi identifies as the majority—to continue operating on offshore or cryptocurrency sites that do not withhold taxes and offer better odds. Despite this, South America already represents 20% of Kambi’s global business, with sustained growth in Colombia, Peru, and Argentina.
Beyond LatAm: Kambi looks to Asia and regulation in Thailand and Japan
With a long-term vision, the B2B technology provider is already charting its next frontier: Asia. Although Becher insists that Kambi only operates in 100% regulated markets, he expressed being "very optimistic" about the legal opening in Southeast Asia.
The executive specifically mentioned Thailand, Vietnam, and Japan as the next major targets. This interest is no coincidence. Thailand is currently advancing a bill to legalize entertainment complexes with casinos, which could lead to the regulation of sports betting. Becher projects that, "sooner or later," countries like India will stop tolerating the black market and move toward formalization, at which point Kambi will be ready to enter.
Financial recovery after the exit of Kindred and LeoVegas
On the corporate front, Kambi seeks to recover the growth of its gross revenues after several difficult quarters. In Q3, the company reported revenues of €37.4 million (USD 43 million), a year-on-year drop of 13.1%.
This decline is due to the migration of its former star clients, LeoVegas (acquired by MGM) and Kindred (now part of FDJ), who developed their own in-house betting platforms. However, Becher is confident in returning to positive numbers within the next two years, relying on geographic expansion and modular sales of services, no longer just as a complete platform but offering specific AI and trading products to tier-1 operators.
Tags: Brazil, Brazil sports betting, Brazil bettor profile, Brazil betting market, Kambi Brasil