Gambling giant Flutter Entertainment announced it has completed the acquisition of an initial 56% stake in NSX Group (“NSX”), a leading Brazilian operator of the Betnacional brand for approximately $350m.
Under the transaction agreement, Flutter will merge Betfair Brazil with NSX to create a Flutter Brazil business. In addition, a mechanism has been put in place to enable Flutter to increase its shareholding in the future.
Peter Jackson, Flutter CEO, commented: “I am delighted to welcome NSX – the operator of leading Brazilian sports betting and iGaming brand, Betnacional – to the Flutter portfolio.
“The transaction demonstrates Flutter’s powerful optionality as an ‘and’ business and aligns perfectly with our strategy for value creating M&A. The combination of NSX’s extensive local expertise, alongside our existing Brazilian business and the advantages of the Flutter Edge, creates a compelling opportunity to capitalize on the exciting runway of future growth in Brazil.”
A Flutter press release stated the company expects “that the acquisition of NSX will contribute $220m additional revenues.”
Brazil gambling market
Brazil increased regulation around sports betting in January this year. The country had previously legalized fixed-odds sports gambling in 2018, but the lack of regulation meant many operators functioned without oversight.
The new rules introduced this year covered the following:
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Licensing: Operators are required to obtain licenses, costing R$30 million ($5 million). A total of 71 licenses were approved ahead of the market’s opening.
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Taxation: A tax system based on gross gaming revenue (GGR), putting the rate at 25%.
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Consumer Protection: Measures have been implemented to prevent money laundering, fraud, and promote responsible gambling.
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Advertising Restrictions: Strict guidelines were established to prevent targeting minors and vulnerable populations
Online casinos also operated in a gray area before the new regulations, and it is estimated that unregulated platforms generated $29.7 billion annually. The government began cracking down on the illegal betting industry last year and blocked over 2000 sites from operating in October.
By combining Betfair Brazil with Benacional, Flutter looks to cash in on all areas of the regulated betting industry. NSX entered the market in 2021, rapidly growing to be the number 4 operator by 2023. The company generated approximately $256 million last year, but is projected to make a loss of around $90 million this year due to investment in the newly regulated Brazilian gambling market.
International growth of Flutter
Flutter operates a diverse group of international gambling companies and will add NSX to that list. Betting brands include FanDuel, Sky Betting & Gaming, Sportsbet, PokerStars, Paddy Power, Sisal, Snai, tombola, Betfair, MaxBet, Junglee Games and Adjarabet.
The company operates in over 100 countries worldwide and has been adding more operators to its growing portfolio. In September last year, it acquired Snaitech from Playtech for €2.3 billion ($2.6 billion) in Italy. That followed takeovers of MaxBet in Serbia, Tombola in the UK, and Junglee Games in India in the last three years.
Across the company, Flutter reported Q1 revenue of $3.67 billion last month, lower than expectations of $3.84 billion. CEO Jackson expects the company to continue to grow, however, and commented, “The global regulated market opportunity is significant, and Flutter remains uniquely positioned to win.”
The move into the growing Brazilian market is an example of the company’s strategy to dominate global gambling.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling.
