LatAm Q2: Brazil Drives Growth, Colombia & Peru Taxes Rise
The second quarter of 2024 has consolidated Latin America as one of the most dynamic regions for the gaming industry, with Brazil leading after seven months of a regulated online market. However, fiscal challenges in Colombia and Peru continue to affect operators' strategies, forcing them to adapt to a changing and competitive regulatory environment.
Flutter has taken decisive steps in Brazil this year, acquiring 56% of NSX, the parent company of Betnacional, and forming Flutter Brazil, which also includes Betfair Brazil. This acquisition is already showing results: revenues in Brazil grew 144% in the second quarter, reaching 44 million dollars, offsetting a slight year-on-year decline at Betfair Brazil, attributed to adverse sports results and friction caused by new KYC requirements. Peter Jackson, CEO of Flutter, highlighted the potential of the Brazilian market and the importance of scaling and offering the best product to gain market share. The company’s strategy focuses on rapid improvements in product and marketing, aiming to strengthen its sportsbook and iGaming offering over the next 12 months.
Entain also reported solid performance in Brazil, with a 21% year-on-year increase in NGR during the first half, driven by success in the transition to the regulated market and high activity during the Club World Cup. Brazil accounted for 5% of Entain’s NGR in H1, although CEO Stella David acknowledged compliance difficulties due to user re-registration for KYC and a negative impact of 28 million pounds (38 million dollars) on the group’s EBITDA from taxes. David warned about market volatility and the risk of black market growth, especially given the possible permanence of the GGR tax increase from 12% to 18% and new advertising restrictions.
BetMGM, following its alliance with Grupo Globo in August 2023, reiterated its goal of reaching a 10% market share in Brazil. Bill Hornbuckle, CEO of MGM Resorts International, emphasized long-term optimism in the country, while Gary Fritz, president of MGM Resorts International Interactive, highlighted the strength of player values and the absence of concerns about the market’s size and health. The initial investment focused on product and, in the second quarter, on marketing to increase brand recognition.
Betsson recorded a record quarter in LatAm, with revenues increasing 35.4% to 84.7 million euros (99.3 million dollars), representing 28% of its global revenues. Peru and Argentina were key markets, and growth in sportsbook offset a slight decline in casino. Nevertheless, Betsson warned of possible advertising restrictions and tax increases in Brazil, Peru, and Colombia. CEO Pontus Lindwall reaffirmed the company’s caution regarding the volatility of newly regulated markets and its readiness for future expansions and acquisitions in Brazil once the environment stabilizes.
Codere Online maintains a cautious stance regarding Brazil, while Mexico remains a solid market, with revenues of 29 million euros in the second quarter and 36% growth in active customers, despite the devaluation of the Mexican peso. CEO Aviv Sher highlighted the ability to replicate successful strategies from Spain in Mexico but noted that entry into Brazil would require significant investment. In Colombia, the company has reduced operations to a minimum due to the impact of the temporary 19% VAT.
Rush Street Interactive (RSI) also identified Mexico as a strong growth market, with a 125% year-on-year increase in revenues and 42% more active users in LatAm, reaching 403,000 in the quarter. CEO Richard Schwartz expects Mexico to be one of the company’s main markets. However, VAT in Colombia has affected profitability, keeping net revenues flat despite a 70% increase in GGR. CFO Kyle Sauers expects profitability to recover in 2026, after the expiration of the temporary VAT. RSI is evaluating expansion into Chile, Ecuador, Brazil, and Argentina.
Super Group experienced a significant decline in LatAm, with revenues of 5 million dollars in the second quarter compared to 9 million the previous year, and from 16 to 10 million in the first half. The company attributed this drop to poor performance in Mexico and Betway’s exit from Brazil.
Meanwhile, Kambi took advantage of the launch of the regulated market in Brazil to increase the volume of operators in America by 3.4%, although the start was slower than expected. The Club World Cup was especially popular, generating 80% of bets on its global network.
In summary, the second quarter of 2024 confirms Brazil as the main growth engine in LatAm, while tax increases and regulatory restrictions in Colombia and Peru force operators to adjust their strategies. The region remains a focus of opportunities but also significant challenges for the gaming industry.
Tags: casino, igaming, regulator, market, sports, Brazil