DraftKings, MGM, Hard Rock Mull Entering Brazil’s Online Betting Market

Posted on: April 3, 2024, 09:05h. 

Last updated on: April 4, 2024, 09:56h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Last year, Brazil established regulatory guidelines for its online wagering market — a move that’s expected to lure some of the industry’s biggest players to Latin America’s largest economies.

The Brazilian flag flying against a backdrop of the sun
The Brazilian flag flying against a backdrop of the sun. DraftKings and MGM are among the US companies that could pursue online wagering licenses there. (Image: Pixabay)

It’s rumored that US-based betting behemoths DraftKings (NASDAQ: DKNG), MGM Resorts International (NYSE: MGM), and Hard Rock International are examining avenues for entering the most populous country in the region.

The list of nearly 135 pre-registrants for Brazilian online wagering permits reads like a who’s who of the gaming industry and includes US-based firms such as Bally’s (NYSE: BALY), DraftKings, and MGM, as well as entities tied to European sportsbook giants Entain and Flutter Entertainment (NYSE: FLUT), among many more.

For domestic iGaming and sportsbook operators, the allure of Brazil is easy to understand. State-level legalization in the US is slowing with widespread belief that it could be years before California and Texas permit mobile sports betting. Conversely, Brazil has the framework in place and is home to more than 209 million people, making it the sixth-largest country in the world.

Brazil Could Increase Allure of Rush Street Interactive

Already rumored to be a takeover target, Rush Street Interactive (NYSE: RSI)could draw increased interest from potential suitors as Brazil liberalizes its online wagering market.

The reasoning is simple. It’s widely believed Brazilian regulators will be partial to home-grown companies and those with established footprints in Latin America when awarding licenses. With sports betting operations in Colombia and Mexico, Rush Street Interactive is the only US-based gaming company that checks the latter box.

There has also been talk the operator could eventually enter Argentina and Peru. Should RSI prove successful in procuring a Brazilian license, it could make the firm an attractive target for another US-based operator that sees opportunity in Latin America.

Last month, Bloomberg reported that RSI approached multiple prospective buyers, including DraftKings, but the company has yet to publicly confirm such talks.

Brazil Could Be Next Great Sports Wagering Frontier

Alone, Brazil’s status as the region’s largest economy and most populous nation make it alluring for gaming companies, but there’s more to the story.

The country doesn’t have Las Vegas-style, land-based casinos and there’s little indication that policy will change anytime soon, indicating iGaming could be a hit among Brazilian bettors who want access to table games.

On the sports wagering front, Brazil is famously one of the most soccer-rabid countries in the world. It has five World Cup titles, is the only country to compete in all 21 editions of the tournament, and holds several other records, including games played, matches won, and goals scored.

The NFL is also increasingly popular there, and Sao Paulo will host the league’s first game in South America in 2024. The NBA is also popular among residents in what is the world’s 10th-largest economy.