Flutter takes a punt on Brazilian betting market

The gambling powerhouse behind Paddy Power and Betfair is set to secure a leading position in the Brazilian market by acquiring a majority stake in the Betnacional brand for $350 million.
Flutter Entertainment said it was buying a 56 per cent stake in NSX Group, the owner of Betnacional, for which it will pay $350 million in cash and will contribute its existing Flutter Brazil business. The deal is expected to be completed by the middle of 2025.
A mechanism has also been put in place to enable Flutter to increase its stake in NSX in years five and ten after the completion date. NSX is expected to generate revenue of about $256 million in 2024 and adjusted underlying earnings of $34 million.
The deal comes as Flutter continues to discuss an estimated £2 billion acquisition of Snaitech, the Italian betting company, from Playtech. Analysts suggested that Snaitech, as a consumer-facing business, would be a better fit with Flutter than with Playtech, which supplies gambling technology.
Flutter said its acquisition of a majority stake in the fourth biggest Brazilian operator secured “a podium position in the highly attractive Brazil market ahead of anticipated regulation in early 2025”. It said that NSX’s portfolio of “local hero” brands would “leverage Flutter’s tech, product and talent to drive incremental growth and value”.
NSX, which was established in November 2021, is a London-based business, but its only director is João Guilherme Monte Studart, 39, a Brazilian businessman. He is listed as “a person with significant control” of the company, with a stake of at least 75 per cent.
Flutter is forecasting a low-single-digit cut to its 2025 earnings to include investment around the market launch of its new brand, but said it saw “a path to accelerated growth and greater medium-term profitability in a $3 billion market that is expected to fully be regulated in early 2025”.
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Betnacional has a 12 per cent share of the Brazilian sports betting market and 9 per cent of the total online market. Betfair Brazil has been growing strongly, too, with forecast revenue this year of about $70 million, although Flutter Brazil’s initial focus on market share through investment is expected to result in a loss of $90 million to $100 million next year.
Analysts suggested that Flutter, which owns Fanduel, the leading American betting group, was taking advantage of its increased firepower after its recent decision to shift its primary stock market listing from London to New York, where it has already moved its operational headquarters.
The idea that Playtech might sell Snaitech emerged two years ago in the wake of a number of approaches. At that point, the mooted valuation was £1.8 billion, still well above the £730 million Playtech had paid for the Italian business six years ago. Playtech was founded in 1999 by Teddy Sagi, 51, an Israeli technology and property billionaire. It supplies software and games to gambling operators in 19 countries.
Flutter operates a wide range of online sports betting and iGaming brands, including Fanduel, Sky Betting & Gaming, Sportsbet, Pokerstars, Paddy Power, Sisal, Tombola, Betfair, Maxbet, Junglee Games and Adjarabet. By putting Sisal together with Snaitech, Flutter would be able to claim a podium position in Italy.
Flutter’s shares closed up by 0.9 per cent, or $1.97, $221.47 in New York on Friday.