Entain Excels in Brazil But Executives Expect Growth to Slow Down

Entain, which just published its Q3 trading update, which highlighted favorable results, including the company’s rapid growth in Brazil. In the company’s earnings call, however, the company’s leadership suggested that this growth is likely to slow down a bit following the launch of Brazil’s regulated sports betting market.

Entain Is No Longer Experiencing Regulatory Drag

In the call, Rob Wood, Entain’s chief financial officer, commented on the company’s strong recovery in the wake of its regulatory setbacks in Great Britain. He emphasized that the company managed to beat its forecasts for two quarters in a row, highlighting an impressive rebounding.

Wood suggested that the year-on-year drag from regulatory intervention is behind Entain, allowing it to continue its steady growth.

With no regulatory drag, it now means all the new UK team’s hard work this year on improving the product, improving navigation, improving Bet Builders, site speeds and so on is playing through to NGR.

Rob Wood, CFO, Entain

At the same time, Entain’s retail business in the UK experienced slight fluctuations, declining 2% year-on-year – a result that was broadly in line with expectations.

Entain Is Optimistic about International Markets But Expect a Slowdown in Brazil

In terms of international revenue, Entain recorded a 10% increase in its net gaming revenue from online operations. Wood noted that Brazil continued to be the “headline grabber” where Entain carried excellent performance.

Wood elaborated that the operator, which operates the Sportingbet brand in Brazil recorded 48% growth in Q2 and then also recorded 48% growth in Q3. These consecutive quarters of impressive growth highlighted Brazil’s potential and the intense demand for betting products in the country. Entain’s CFO, however, warned that the regulation of the Brazilian betting market is likely to cause a slowdown, leading to much more moderate growth.

The comps are, however, starting to get harder for Brazil as we now annualize improving metrics this time last year and we have new regulation to grapple with from first of January. So growth from Brazil in 2025 is likely to be much more moderate.

Rob Wood, CFO, Entain  

Despite the possible growth slowdown, Entain executives said that they are happy that Brazil is regulating its market as, according to CEO Gavin Isaacs, the company best operates in regulated markets.

Entain Is Bullish on Brazil

Wood also disclosed that Entain will continue to invest in its business in the LATAM country and channel players toward its products. The company said that the lessons from 2024 will help it to set up the right level of marketing budget for 2025.

The CFO further said that he expects other larger operators to follow suit. In any case, Wood was certain that increased investment would be worth it because of the strong paybacks in Brazil. He reiterated Entain’s desire to be successful in the region.

Speaking of success, Wood also said that Entain expects profitability to set similar levels of online EBITDA margin to continue into next year in spite of the regulation of the market and the introduction of taxes.

For reference, Brazil is set to launch legal betting on January 1, 2025.