JMP Is Optimistic about Flutter’s Stake in Betnacional  

JMP Securities analysts are optimistic about Flutter’s recent acquisition of a 56% stake in NSX Group, arguing that it would allow the latter company to drive strong synergies in Brazil.

Flutter’s Brazil Bid Is In Line with the Company’s Strategy
According to a NEXT.io report, JMP Securities believes that Brazil’s large population and ongoing sports betting regulation will be a catalyst for success.

Flutter, for context, just acquired a 56% stake in Betnacional’s parent company, NSX Group. This arrangement, expected to close in early 2025 and subject to regulatory approvals, would combine Betfair Brazil’s operations into NSX, creating a new entity called Flutter Brazil.

The move, according to JMP, aligns with Flutter’s usual strategy of ushering in growth via key M&A activity and acquisitions of well-known local brands in regulating regions. The analysts estimate that Flutter has so far spent $11.5 billion on M&A activity outside the United States.

JMP Experts Are Optimistic about Brazil
JMP experts highlighted the huge untapped potential of Brazil where gaming and betting have been largely unregulated for years. The firm noted that when markets go green, their size usually increases, providing more opportunities for investment, as well as marketing and media deals.

JMP noted that Betfair and NSX Group have largely been posting unexciting EBITDA results in Brazil as they were held back by a lack of scale and market-specific factors. However, the to-be-regulated Brazilian market would likely provide Flutter Brazil with plenty of growth opportunities, allowing it to capitalize on its position to achieve synergies. 

In any case, experts believe that Brazil will cement itself as the most attractive betting market outside the US by the end of the decade. The JMP experts were likewise optimistic about NSX’s business and its growth potential.  

The analysts concluded that Flutter is likely to provide further insights into its plans at its investor day on September 25.

Brazil Adopts Stricter Rules as Betting Regulation Looms
Speaking of Brazil, Isaac Sidney, president of the Brazilian Federation of Banks, demanded that the government accelerate the ban on betting via credit cards. Citing problem gambling-related concerns, Sidney argued that such a measure would protect Brazilian players from harm.

A week ago, Brazil also took a stance against riskier online gambling games such as Fortune Tiger and Fortune Dragon. The Ministry of Finance restricted addictive products that were deemed to be too dangerous and addictive. The ministry also accused several operators of misleading players with unrealistic odds and prompting them to overspend.