December 19, 2024

“Our medium-term plan was always to join the sports betting market,” said Augusto on a phone call. “We wanted to follow the same path as DraftKings and FanDuel. In daily fantasy sports, we pretty much fly solo—we have more than 90% share of the market,” in Brazil.
The rollout of sports wagering in Brazil has been complex. In 2018, sports betting was made legal but no regulatory framework was put in place, which led to a series of sports betting operators creating an offshore “gray market.” Starting with the new year, the sports betting market in Brazil will be regulated, opening up another large market for mainstream sportsbooks to enter the country.
“If you’re a serious company, you want these markets to be regulated so you can operate on a plain and clean scenario,” said Augusto. “It’s way more safe for you to operate, grow, serve the customers. You don’t have any prejudice if the market’s regulated.” RDP elected not to operate in the gray market to maintain good relations with the Brazilian government, he added. “We’re the good guys of the market.”
As it stands, the betting market for Brazil is fairly fragmented. Betano, a subsidiary of Greece’s publicly traded OPAP, is the market leader with 23% share, followed by the privately held UK firm Bet365 with 20%, according to an OpenBet white paper citing data from H2 Gambling Capital. The competition promises to get stiffer, with at least 113 businesses having applied for a Brazilian license, according to the OpenBet paper.
It easy to see why so many are clamoring to get in. While it’s not quite as large an opportunity as the U.S., regulated Brazilian sports betting should still be quite sizable, growing to $10 billion in its first five years, according to the OpenBet report. By comparison, legal U.S. sports wagering revenue was $10.9 billion last year on $120 billion in bets, according to the American Gaming Association.

“It has huge potential, but there is no clear market leader, so in a regulated market someone can establish a really good position and start driving the market,” said Augusto. Certainly the hope is the payoff is the same following the strategy of Flutter Entertainment’s FanDuel and DraftKings—those businesses started as daily fantasy operators and now combined control about 74% of the U.S. sports betting business. FanDuel co-founder and former CEO Nigel Eccles sits on RDP’s board of directors.
Among new entrants planning a move into Brazil are FanDuel, which bought 56% of NSX Group for $350 million in September. NSX operates Betnacional, which is the No. 4 market share leader in the Brazilian gray market. “There’s a huge prize to play for. And our focus is on investing for future success, very much akin to our strategy that you’ve seen in America,” said Dan Taylor, CEO, International for Flutter Entertainment, in a September call with investors, citing the purchase of NSX.
Other international sportsbooks, including MGM Resorts, Rush Street Interactive, and (at least as of February this year) Endeavor Group’s OpenBet, have told investors they are eying entering Brazil sports betting, too.
But, like the U.S. market, the size of the Brazilian wagering market doesn’t guarantee making money. Super Group, the parent of global sportsbook brand Betway—which gave up on the U.S. sports market this year—has told its investors it’s not interested in Brazil given the influx of competitors expected there. DraftKings’ Jason Robins told investors in August the company has no plan to enter Latin America, preferring to remain focused on the U.S.
RDP’s Augusto believes he has an edge from two things: The app is a native Brazilian build, so it more naturally appeals to Brazilians than a global or imported sportsbook will, with integration in their app of the types of statistics Brazilians love to pour over. The second is RDP’s eight million fantasy sports user base, which is eager for the company to expand to betting, Augusto said. “One of the biggest media brands here launched a survey asking users what their favorite sports betting brand was and Rei do Pitaco was rated seventh, even though we’re not sports betting yet. We’ve got the brand, and it’s a sports betting brand.”

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