An important topic has emerged in discussions between investors and leaders of publicly traded sportsbooks over the last year: Latin America. This interest was intensified by the recent launch of the regulated betting market in Brazil, which took place three weeks ago.
This new scenario has attracted companies looking to expand their operations to the Southern Hemisphere, especially while the performance of sports betting stocks in the US is less favorable. However, there are still several opportunities for growth in the United States.
According to PagSeguro International, a provider of financial services to bookmakers, Latin America is expected to become a sports betting market worth US$54 billion by 2026.
This number represents an increase of 150% compared to 2023. This growth prospect has generated enthusiasm on Wall Street. The two most successful betting stocks in the US in 2024 were Codere Online, a Latin America-focused sportsbook whose share prices have more than doubled in the last year, and Rush Street Interactive.
The latter saw its shares triple due to expansion in the markets of Mexico, Colombia and Peru, where growth is considerably faster than in the US.
Companies in Brazil and decrease in sports betting in the USA
The race for the Southern Hemisphere is evident, with at least 113 companies seeking to establish sports betting in Brazil. In contrast, in the US, the euphoria that characterized the start of sports betting appears to have waned. For example, in July, Super Group decided to leave the American market, less than three years after its entry.
Super Group, which believed its global Betway brand and marketing deals with NBA and NHL franchises and the Ted Lasso series would attract American bettors, encountered difficulties due to high taxes and marketing costs in several markets.
Three months before Betway‘s departure, 888 Holdings paid $50 million to cease operations under the Sports Illustrated brand. Additionally, several companies, such as Wynn and Betr, have chosen not to compete in individual states, surrendering their licenses in Massachusetts last year.
However, there are still significant opportunities for growth in the US. This year, online sports betting is scheduled to launch in Missouri, and the revenue generated is expected to be considerable, according to analysts at Jefferies Group.
Revenue in Missouri and possible regulation in other states
Missouri is expected to generate a $500 million gross gaming revenue (GGR) market based on its population, which is similar to Maryland and Colorado, which have $600 million and $465 million GGR markets , respectively.
In 2024, the US generated $12.7 billion in GGR, according to data compiled by Sportsbook Review.
Although Missouri is the only state confirmed to launch online sports betting in 2025, other states, such as Texas, Minnesota, Georgia, South Carolina and Oklahoma, present strong possibilities for regulation.
Each of these states is experiencing some political movement toward legalization, according to a Jefferies analysis.
Another state, Mississippi, recently saw legislation introduced to allow online betting, although a similar attempt failed last year. In the state of Alabama, legislation is also being considered, although previous efforts have not been successful.
Estimates and growth of sports betting in new states
The question of how big these new state markets can be is fundamental. If about six states with a reasonable chance of opening this year materialize, the U.S. sports betting market is expected to grow by a third.
GeoComply, a company that identifies user locations to ensure compliance in media rights and betting, estimates that the four largest potential markets cited by Jefferies—Texas, Georgia, South Carolina and Minnesota—could add up to $3.6 billion in revenue. gross revenue from games to the market. Three other states, such as Alabama, Mississippi and Nebraska, could contribute an additional $700 million.
GeoComply based its estimates on population and the average 15% tax on GGR, but noted an anecdotal increase in demand in these locations. During the NFL season, the company blocked 4.5 million attempts to access sportsbooks in Texas, a 56% increase compared to 2023.
Furthermore, over 27 million online betting attempts were registered in the other six states analyzed, significantly exceeding the previous year’s numbers. In Iowa, a location near Nebraska, there are 2,800 active accounts associated with Nebraska residents who travel to place bets, as noted by GeoComply.
Expansion of sports betting in the US
Finally, Jefferies still believes that the expansion of betting in the US could be significant. The company suggests DraftKings shares could triple as new states join the market over time.
In an ideal scenario, introducing states like Texas, California and Florida would gradually lower capital costs for bookmakers. However, this plan faces challenges as Texas Lieutenant Governor Dan Patrick has previously blocked sports betting legislation.
Additionally, efforts in California to legalize betting failed at the polls, and the Seminole tribe has legal control over online betting in Florida. However, Jefferies suggests this tribe may be open to licensing deals.