Entain is forecasting that its rapid growth in Brazil will become more moderate when the regulated market comes online in January. CFO Rob Wood also highlights the strong returns in the market.
Entain grows its revenue in Brazil
Entain reported 48% annual revenue growth in Brazil in its Q3 business update. This is already the second consecutive quarter of growth.
Chief financial officer Rob Wood described this growth as the “highlight” of Entain’s third-quarter results. Furthermore, he highlighted that the regulation of the online betting market is scheduled for January 1, 2025.
Entain is already present in Brazil with its Sportingbet brand. The platform is one of 100 companies currently approved to do business during the regulator’s transition period, between October 1 and December 31.
So, if you obtain federal authorization from the Secretariat of Prizes and Bets (SPA), you will be able to continue operating this brand in Brazil from 2025.
However, despite the big plans, Wood noted that Entain’s growth could slow. The licensed market will bring new regulations that will affect users, including restrictions on marketing.
“Brazil’s growth in 2025 will likely be much more moderate,” Wood told analysts on the third-quarter earnings call on Oct. 17. “But Brazil is clearly a very important market for us.”
Entain wants to increase marketing spending
Brazil is expected to be an extremely competitive market, with international giants such as Betano and Caesars Sportsbook joining established local brands in applying for a license.
As a result, Entain is currently studying how best to promote itself to attract Brazilian punters, with Wood noting that an expected increase in marketing spend can be expected in 2025.
“We are looking at what the right level of marketing budget should be and it will undoubtedly be higher than in 2024,” Wood explained. “So we expect one or two new material players or an increase in the marketing budgets of existing large players.”
“Returns are strong in Brazil and this led us to increase investment in marketing this year too. So it’s a market we want to play in and be successful in.”
But in terms of how it can attract bettors, Entain is already benefiting from having a new team in Brazil. The strategy is based on a strong product set to play a key role in your strategy.
“You’ve heard Sameer [Deen, Entain’s chief commercial officer and president] talk about things like outsourcing payments like cashouts, improving content, and making sure we have popular local games available in the Aviator game. The front-end has improved significantly, benefiting from BetMGM developments,” Wood added.
Regulation is on the way in Brazil
With the legal market just months away, there has been growing criticism against the gaming sector in Brazil regarding regulatory measures such as advertising and payments.
However, Entain CEO Gavin Isaacs remains confident that the launch will indeed take place in the new year, with Entain largely in agreement with the current regulations in place.
“We do not expect there to be a delay, but we encourage regulation. We are fully regulated and that is what we operate best at. So I think that would be something that they’re looking at and it could end up being an advantage for us,” Isaacs said.
“Some of the measures that are being looked at will be considered sensible from our point of view, such as a ban on credit cards, that advertising has a sufficient allocation to responsible gambling and all these things seem relatively simple.”
