Paddy Power parent Flutter buys Brazilian betting group for $350m

Paddy Power Betfair parent Flutter has acquired a controlling stake in a leading Brazilian betting company for $350 million (€316 million) in cash.
Flutter Entertainment, which recently moved its primary listing from Dublin to the New York Stock Exchange, has acquired an initial 56 per cent shareholding in the NSX Group, which operates the Betnacional brand in Brazil.
NSX is expected to generate revenue of approximately $256 million this year, as well as adjusted earnings before interest, taxes, depreciation and amortisation of $34 million.
Announcing the deal, Flutter said it would merge Betnacional with its existing Betfair Brazil brand to create a new unit called Flutter Brazil.
The betting giant said it expected the unit to make a loss of between $90 million and $100 million next year, but insisted it would exploit the Brazilian market along the same lines it has done in other markets such as the United States.
“We expect to drive market share growth and embed future profitability through disciplined customer investment,” it said.
Under the terms of the agreement, Flutter will also be able to increase its shareholding in NSX after five and 10 years of completing the deal.
Gambling on sports was legalised in Brazil in 2018, but won’t be fully regulated until early next year. The country is seen as a growing market for the industry and dozens of companies have been looking to tap into this in recent years.
Flutter told investors the deal would be fruitful because it would enhance the company’s competitive position in the Brazilian market.
Brazil has a population of more than 200 million people, and Flutter was also keen to point out that sports, and soccer in particular, are a “key part” of Brazilian culture.
It highlighted the “strong demand” for sports betting products in Brazil where annual gaming revenue has grown 38 per cent since 2018 to almost $3 billion in 2023.
NSX entered the Brazilian market in 2021 and is now the number four operator there with 12 per cent of the sports betting market and 9 per cent share of the online market.
Flutter said its Brazilian arm will be “exceptionally well positioned” to take full advantage of the “significant growth opportunity”.
Flutter chief executive Peter Jackson said: “I am excited to announce the addition of NSX, operator of Betnacional a leading Brazilian sports betting and iGaming brand, to the Flutter portfolio.
“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.”
The deal is expected to close, subject to regulatory clearances, by the second quarter of next year.
Flutter’s biggest business is now in the US where its subsidiary FanDuel is one of the leaders in a market that has been opening rapidly since 2018 when the federal supreme court lifted a ban on individual states legalising sports betting.
The group said last month that it expects US revenues to be as high as €5.7 billion this year, with earnings around €720 million.
Along with Paddy Power and FanDuel, Flutter owns betting exchange Betfair, UK bookie Sky Bet and Sportsbet in Australia among other businesses.
It is currently in talks to buy Italy’s Snaitech from owner London-listed Playtech for a likely €2.3 billion, although it has cautioned that there is no certainty about the negotiations’ outcome.