Flutter CEO optimistic on Brazil, despite KYC frictions impacting Q1
Flutter reported a 44% year-on-year drop in Brazil revenue during the first three months of the market’s regulated betting sector, related to KYC bottlenecks with Flutter’s existing Betfair business.
But Jackson expects its soon-to-close NSX Group acquisition to put Flutter “in an enhanced competitive position, in a fast-growing newly regulated market”, he said during the group’s Q1 earnings call on Wednesday.
“Combining a strong local management team, localised proprietary technology and a local hero brand in Betnacional, alongside our existing Betfair Brazil business and Flutter Edge capabilities, will position us for success in this very exciting market,” Jackson said.
Last September, Flutter announced it had agreed to acquire an initial 56% stake in NSX Group, owner of the Brazil-facing Betnacional brand. The $356 million deal was expected to close in Q2 2025.
Completion of the deal will create a new “Flutter Brazil” business, incorporating the company’s existing Betfair brand, as well as NSX Group’s Pagbet, MrJack.bet and Betpix brands.
Meanwhile, the NSX business reported Brazil revenue had increased 20% year-on-year in Q1, suggesting the business had not been hit with the same compliance bottlenecks as others.
“Clearly, the NSX business, which we hope will be coming in later this month, is performing really well and in line with our expectations. So it’s over 20% up in Q1 on a year-on-year basis despite some of those regulatory kind of friction challenges. So we’re really pleased with what we’re seeing so far in Brazil,” Jackson added.
Flutter previously said the acquisition would give it an 11% market share in Brazil in the long term and position the company as one of the top three in the nascent legal betting market, which launched on 1 January.
KYC friction causes Flutter Brazil Q1 revenue to decrease
Like other operators, Flutter faced difficulties adapting to the new regulatory environment in Brazil, especially in regards to KYC.
New regulations have mandated facial recognition technology for ID verification, with bettors needing to register with a bank account attached to a financial institution authorised by the Central Bank of Brazil.
“We have seen a few challenges with Betfair in Brazil due to the changes in the regulatory environment,” Jackson said. “That’s mainly around some friction in the sign-up process for customers. We’ve seen that impacting on activation.”
But Jackson also said he is “really pleased” with what the company is seeing so far in Brazil. In a letter to Flutter shareholders alongside the Q1 results, he said: “M&A in Brazil remains on track as we augment an impressive portfolio of local hero brands.”
More broadly, Flutter reported first-quarter group revenue of $3.66 billion, up 8% versus the prior year. Adjusted EBITDA of $616 million and net income of $335 million were also YoY increases of 20% and 289%, respectively.
How did Flutter’s competitors fare in Brazil during Q1?
In terms of Flutter’s competitors in Brazil, Entain reported NGR Q1 growth of 31% in the country, with the operator saying this was ahead of expectations.
Betsson, meanwhile, reported revenue growth of 70.3% across LatAm, although as it only received its full licence for Brazil in March, the company didn’t experience too much of an uptick in the market.
However, CEO Pontus Lindwall again said the company is taking a cautious approach in Brazil, although he does expect the launch to draw on the business’ success elsewhere in the region to power its growth.
“Brazil, it’s a huge market, and we want to start off in a soft way and make sure that the product is calibrated for that market,” Lindwall said. “And then we’re going to start marketing and see what kind of traction we get.”