Flutter Entertainment’s CEO, Peter Jackson, stated that the company is ready to “capitalize on growth opportunities in Brazil” following the announcement of its acquisition of 56% of NSX Group, is a Brazilian operator whose brands include Betnacional.
The deal, valued at $350 million, enables Flutter to establish a new business in the region called Flutter Brazil.
The company emphasized that the acquisition aligns with its strategy to “invest in leading positions in international markets, securing its presence” in the regulated market of the country upon completion of the acquisition.
Flutter also reported that it expects NSX to generate approximately $256 million in revenue and an adjusted EBITDA of around $34 million in 2024.
Revealing details of the deal, Flutter noted that upon completion, it will pay approximately $350 million in cash and contribute its existing Betfair Brazil business in exchange for 56% ownership in the newly formed Flutter Brazil entity.
A mechanism has also been developed that will allow Flutter to increase its stake through mutual buy-sell options in the fifth and tenth years after the transaction’s completion.
The completion of the transaction is subject to standard regulatory approvals and is expected by the end of the second quarter of 2025.
“I am excited to announce the addition of NSX, operator of Betnacional, a leading Brazilian sports betting and iGaming brand, to the Flutter portfolio,” Jackson commented.
“We believe that combining the extensive local expertise of the NSX team, our existing Betfair business and the power of the Flutter Edge, will create a compelling opportunity to capitalise on the growth opportunity in Brazil which presents an exciting runway of future growth.”
Flutter announced that, in line with its strategy, it plans to create shareholder value in three areas following the completion of the acquisition:
- Improving competitive positioning in a fast-growing and recently regulated market.
- Expanding the portfolio of “local hero” brands.
- Opportunities for synergy through access to Flutter Edge, ensuring significant value creation.
Brazilian Market
Speaking about competitiveness in the Brazilian market, Flutter presented statistics highlighting that full regulation of online sports betting and gaming is expected by early 2025.
The operator noted that in Brazil, with a population of 200 million people who are actively interested in sports and football, there is “high demand for betting and gaming products.” The unregulated market has shown a compound annual growth rate of gross gaming revenue of 38% since 2018, reaching nearly $3 billion in 2023. Much of this growth has been driven by locally focused brands.
Flutter added that consolidation in a fully regulated market is expected to “benefit established local operators” due to associated taxes, licensing, and compliance requirements, and that the combined strength of Flutter Brazil “positions the company well to capitalize” on this market.
Speaking about the expansion of its “local hero” brand portfolio, Flutter emphasized that the merger of NSX Group and its Betfair business will “create a pedestal of honor in Brazil,” as NSX is the fourth operator in the region with a 12% market share in sports betting and a 9% share of the overall online market.
The company also highlighted Betfair Brazil’s strong position, forecasting that the operator will generate approximately $70 million in revenue this year.
Flutter Brazil will be managed by a local team to ensure “decision-making is closer to the customer” and will utilize a proprietary technology platform developed in-house to provide “fast and flexible product offerings.”
Regarding synergy and value creation based on Flutter Edge, Flutter noted that NSX will leverage the company’s internal capabilities in pricing and risk management to develop a unique range of sports betting options. This will be complemented by Flutter’s expertise and content in gaming, enhancing the user experience.
Flutter believes that Flutter Brazil has strong prospects for success in the regulated Brazilian market; however, it anticipates an adjusted EBITDA loss next year as part of its strategy in other new regulated markets.
The operator noted: “Flutter Brazil will be exceptionally well positioned to take full advantage of the significant growth opportunity in the newly regulating Brazilian market.
“In line with our successful strategy in other newly regulated markets such as the US, we expect to drive market share growth and embed future profitability through disciplined customer investment. This is expected to result in a Flutter Brazil adjusted EBITDA loss of approximately $90-100m in 2025.”
Flutter also noted that it remains committed to a medium-term leverage ratio of 2.0-2.5x, giving it the flexibility to pursue value-creating acquisitions like NSX.
The company will update shareholders on the deal at its investor day on September 25, where it plans to discuss organic growth, medium-term cash generation potential, and capital allocation options.
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