Q3 LatAm round-up: Slower-than-expected momentum in Brazil

Following the release of most gambling operators’ Q3 results, iGB takes a deeper look at their performances across LatAm and the strategic direction that companies are preparing to take.

Brazil has captured much of the gambling sector’s interest this year after regulation launched on 1 January, with a number of international giants entering the market.

One such company was Flutter, which created its new Flutter Brazil business after acquiring a 56% stake in NSX, the parent company of Brazil-facing brand Betnacional.

That deal was concluded in May and, in Q3, Flutter achieved $87 million in revenue from its Brazil venture. This was 412% higher than the $17 million it generated in the same quarter last year prior to the completion of the NSX deal, which largely came from its existing Betfair business.

But while Betnacional achieved record iGaming revenues in Q3, excluding M&A Flutter’s revenue during the quarter was actually down 18%, which Flutter attributed to the fact that Betfair Brazil was still continuing its recovery from the friction derived from the re-registration required at the start of regulation in January.

Despite the Betfair struggles, Flutter CEO Peter Jackson remains confident the company will succeed in Brazil.

“Brazil is an exciting growth opportunity for Flutter and we retain a strong conviction that scale operators with the best products will win the largest share of the market,” Jackson said in the Q3 report.

Entain hampered by poor sports margin

Entain, meanwhile, enjoyed a successful transition to the regulated market with its Sportingbet brand, reporting a 21% year-on-year NGR rise in Brazil during H1.

But Q3 was a different story, with NGR in Brazil down 11% despite 14% volume growth.

Entain deputy CEO and CFO Rob Wood put this down to “genuine bad luck from sports results”, stating the company is still trading on the right side of expectations when it comes to volume.

He expects sports margin to normalise over time, with the volume growth demonstrating why Flutter continues to be enthused about its future in Brazil.

It’s not just sports betting where Entain struggled during Q3, however, with Wood saying slow game authentication has hampered the company’s iGaming efforts in Brazil.

“iGaming is not particularly strong at the moment and all the growth is coming from sports,” Wood said on the earnings call. “We think this is a market-wide phenomenon, not just Entain.

“The good news is we think there’s a lot more growth to come out of gaming as we look forward. But so far in 2025, it’s been slow.”

BetMGM investing heavily in Brazil

Last August, MGM Resorts International struck a partnership with Grupo Globo, LatAm’s largest media group, to introduce the BetMGM brand to the Brazilian market as a joint venture.

The company has stated on a number of occasions that it is aiming to reach 10% market share in Brazil, and it reiterated this target in its Q3 presentation.

MGM achieved “strong growth” in Brazil during Q3 without giving direct figures. The company is focused on efficiently building brand awareness and customer acquisition, powered by its on-the-ground team led by MGM Brazil CEO Almir Ribeiro.

However, MGM Resorts International CFO Jonathan Halkyard said the company’s heavy investment in Brazil will likely lead to MGM Digital reaching an EBITDA loss of close to $100 million for the year.

Halkyard explained the company’s investment is in line with its roughly 50% stake in the JV, which is already showing positive signs.

“The venture has seen encouraging growth quarter-over-quarter throughout the year in active players, deposits and GGR,” Halkyard said on the company’s earnings call.

Record LatAm casino revenue for Betsson in Q3

Betsson continues to make significant efforts in LatAm, launching in Brazil and Paraguay during 2025 to add to its existing markets which include Argentina, Colombia and Peru.

It is proving a successful venture, with Betsson achieving year-on-year revenue growth of 10.2% to €76.5 million in LatAm over Q3.

This was powered by record casino revenue in the region, rising from €46.1 million in Q3 2024 to €56.6 million in the same period this year.

Casino growth helped to offset a year-on-year drop in sportsbook revenue from €23.1 million to €19.8 million. Betsson put this down to tough comparisons with last year’s Q3 which included the European Championship and Copa America football tournaments.

LatAm accounted for 26% of Betsson’s revenue in Q3, down from 28% in Q2.

Betsson CEO Pontus Lindwall pointed to Argentina, Peru and Colombia as key areas of focus, with the former continuing to show strong underlying growth in terms of deposits and turnover.

Codere Online positioned to become a leading player

Codere Online is currently operating in the LatAm markets of Mexico, Colombia and Panama, as well as certain provinces in Argentina.

Its current total addressable market (TAM) is €4.8 billion, although it noted in its Q3 presentation the combined TAM of online expansion markets, which includes Brazil, Peru and Uruguay, could be €8.4 billion by 2029.

In the presentation, the company said: “Codere Online is especially well positioned to become a leading player across the region.”

Mexico continues to be Codere Online’s biggest market, achieving market revenue of €26.8 million in Q3. This is ahead of the €22 million generated in its home market of Spain.

However, with Mexico’s government weighing up increasing the gambling tax rate from 30% to 50%, Codere Online said it may have to reconsider its investment into the market.

Outgoing CFO Oscar Iglesias, who will shortly be replaced by Marcus Arildsson, expects the tax to come in from 1 January.

“The discussions around capital allocation, I think, is a broader one, and it’s in the context of the discussions we’re having at the board level,” Iglesias told analysts.

“The tax obviously factors into … our appetite and willingness to invest into the market because it has an impact on the unit economics, the flow-through of every dollar of NGR to EBITDA in the business.  

“It’s still a little bit early to say what that means in terms of our plans for next year to invest in Mexico.” 

Codere Online is also working under the assumption that the 19% VAT in Colombia, which is set to end from the start of 2026, will be renewed.

Codere Online Executive Vice Chairman Moshe Edree explained the operator’s short- to mid-term strategy “does not include Colombia”, echoing CEO Aviv Sher’s post-Q2 comments that the company was pulling back in the market.

RSI confident Colombia VAT won’t be renewed

But while Codere Online is expecting the VAT to be renewed, Rush Street Interactive CEO Richard Schwartz said on the company’s post-Q3 earnings call that the business is predicting the tax will be scrapped.

Rush Street Interactive followed many other operators in absorbing the tax through player bonusing. This meant in Q3, while GGR from Colombia grew over 50%, net revenue was down 27%. Revenue across LatAm fell 11%.

Despite this, Rush Street Interactive believes it holds second place in Colombia, while it also claims to be among the top seven operators in Mexico.

Monthly active users in LatAm during Q3 were up 30% year-on-year to around 415,000.

Rush Street Interactive listed Brazil, Ecuador, Argentina and Chile as potential expansion opportunities.

When asked on the earnings call whether the situation in Colombia may dampen the company’s interest in further LatAm expansion, Schwartz responded by saying the company was still excited by the region.

“We believe those markets are at the infancy of growth,” Schwartz said. “And as we see in our growth ourselves, there’s lots of opportunity there, and it’s a very large population across Latin America that are in the process of or will be legalising online gaming in the future. So we certainly remain very excited for it.”

Kambi lowers FY2025 guidance due to slow Brazil progress

In its Q3 report, Kambi announced it was lowering its full-year 2025 guidance from an adjusted EBITDA of €20 million-€25 million to approximately €17 million.

The company said this was in part down to the Brazilian market developing more slowly than expected, with CFO David Kenyon stating the company isn’t seeing the growth in Brazil it had “hoped for”.

Kambi CEO Werner Becher said on the earnings call that while the Brazil market is continuously growing, he believes the overall pre-regulation market size was overstated.

“There’s a little bit of disappointment, I would say, in the entire industry about the Brazilian market,” Becher claimed.

“The legalised regulated market grew slower than expected because the black market is still very big there.”