Analyst: Brazilian igaming off to a positive start
Brazilian igaming platforms went live on 1 January and, so far, the data is “encouraging,” according to Jefferies Equity Research analyst James Wheatcroft.
Jefferies’ research showed elevated activity and competition within Brazil, with approximately 150 legal sites averaging 63.4 million visits per day.
The market leaders included Flutter Entertainment and Entain, with strong results also cited for several other firms.
In a 28 January investor note, Wheatcroft estimated that Brazil will generate US$4.7 billion in online activity by 2026, making it the world’s fourth-largest igaming jurisdiction. Entain’s Sportingbet holds a 5% market share at present and Flutter’s Betnacional a 6% one.
Other companies with even larger shares or commensurate ones were all privately held: Betano (19%), Superbet (14%), 7Games (6%), Estrelabet (6%) and Bet365 (6%).
Betano and Bet365 are among the legacy operators from Brazil’s previous gray-market period. During which time Betano and Bet365 combined for a 40% share of the business. However, Bet365 has now been displaced as number two by Superbet.
The 150 or so valid betting sites represent 14 approved licenses and another 52 provisional ones. All are taxed at 12% of gross gaming revenue.
Citing H2 Gambling Capital, Wheatcroft wrote that Brazil is expected to engender US$3.7 billion in gambling revenue this year, putting it ahead of New Jersey’s US$3.4 billion last year.
“By its second full year, Brazil is expected to be the fourth-largest regulated online gambling market globally, behind only the U.S., UK and Italy,” he added.
Wheatcroft further reported that igaming and online sports betting traffic peaked on 18 January, when 87.3 million visits were registered. To provide context, he noted that is 45% higher than average Brazilian web traffic to YouTube.
“We view the early Brazil web traffic data as a strong positive for companies across our gaming coverage,” Wheatcroft summarized. He added that not only were Flutter and Entain “seeing significant growth,” but the good business would redound to the benefit of Kambi and other B2B providers.
“Given the timing of the sports calendar, we expect initial growth is strongest in igaming, with the start of the soccer season in late March likely a further catalyst,” Wheatcroft concluded.
Meanwhile, earlier this week Brazil’s Secretary of Prizes and Betting at the Ministry of Finance, Regis Dudena, announced plans to certify and register B2B providers in Brazil.
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
