Grande Nacional
Flutter announces agreement with NSX in Brazil
Flutter pumps $350m into the parent of Betnacional.
In +More: GLP buys the land for Bally’s in Chicago.
Murdoch says Fox will take up FanDuel option, is applying for licenses.
Election betting goes live with Kalshi, Interactive Brokers.
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Flutter joins the carnival
We are flyin’ down to Rio: Flutter has agreed to pay $350m and will incorporate its existing Betfair Brazil business in return for a 56% stake in a new Flutter Brazil entity after agreeing a deal with NSX, the company behind the number four Brazilian brand Betnacional.
Under the terms of the deal, Flutter can gain 100% control of Flutter Brazil through reciprocal put and call arrangements in years five and 10 following completion.
H/T to next.io, which broke the news last month.
Make me a deal and make it straight: Flutter said the deal was in line with its local hero strategy. NSX is expected to generate revenue of ~$256m and adj. EBITDA of ~$34m in 2024.
Flutter said the combined business is “exceptionally well positioned” to challenge at the top of the newly regulated market come January.
It added that the investments in the proposition in the year ahead would lead to adj. EBITDA losses of ~$90m-$100m in 2025.
All signed and sealed, I’ll take it: Peter Jackson, CEO at Flutter, said he believed combining the local expertise of NSX, the existing Betfair business and wrapping it up with the “power of the Flutter Edge” would create a “compelling opportunity” to capitalize on the growth opportunity in Brazil.
Take me on a roller coaster: The deal was brokered by Tekkorp Capital, whose CEO Robin Chhabra told E+M Flutter had “fired the starting gun on M&A in Brazil.”
“I imagine this will be the first of many transactions in that market,” he added.
“It is too big to ignore. It is a fast and dynamic market.”
We’ve been around a long time: Analysts at Regulus said today that Flutter “learned long ago that Betfair and PokerStars are hard to leverage outside their product niches.”
The team added Betnacional is “one of the few Brazil-facing companies that can add scale and localisation quickly” in a market that promises to be very large “whatever the fiscal-regulatory hurdles.”
Regulus noted recently the soon-to-be-regulated Brazilian market would be an epic fight involving many, if not most, of the 113 license applicants that registered with the authorities before the initial licensing window closed in late August.
Take me for an airplane ride: MGM Resorts recently announced a tie-up with media giant Globo and one investment source has suggested DraftKings is “intensely interested” in Brazil.
“They say they are focused on the US, but they do see LatAm as almost a home market,” the source added.
Meanwhile, it is likely there will be more M&A news from Flutter soon as it is thought to be close to announcing the acquisition of Snai from Playtech.
Recall, Playtech said it was in exclusive talks in mid-August.
Not now KTO
Staying with Brazil, Kambi has announced a sportsbook provision deal with Brazilian sportsbook KTO, replacing its current third-party provider.
In the press release, Kambi said KTO has “quickly established itself” as a leading brand in the currently gray Brazilian market. Kambi shares rose over 6% on the day.
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+More
Gaming & Leisure Properties has announced it has bought the land to be utilized for Bally’s permanent casino in Chicago for $250m from Blue Owl Capital.
An AFR report said Star Entertainment has been asked by the New South Wales Independent Casino Commission for further details about its operations even as it seeks a A$150m ($101m) lifeline from investors.
Sega Sammy has received permission from the Nevada Gaming Control Board to proceed with its $108m acquisition of GAN. The plan now goes to the Nevada Gaming Commission for final approval on September 26.
Evolution has acquired arcade gaming streaming provider Arcadia Gaming Solutions for €2.5m in cash. An unspecified earnout based on performance is attached to the deal.
Fanatics Betting & Gaming has launched in Washington DC via a market access agreement with NWSL team Washington Spirit.
Read across
Silence is not golden: In The Token Word, those playing the prediction markets at Polymarket were left disappointed by the lack of any mention of crypto by either candidate during this week’s presidential debate.
We (almost) did it: Speaking of prediction markets, Compliance+More on Tuesday wrote about Kalshi’s court win over the Commodity Futures Trading Commission – and the CFTC’s ultimately failed attempts to stifle any offering with an emergency motion.
See election betting news below.
What we’re not watching
In-house creative you say? We, er, really wouldn’t have guessed.
+More careers
The big move: Former Superbet founder and original CEO Sacha Dragic has returned to the company to lead it in conjunction with current chief exec Jimmy Maymann, who himself replaced former CEO Johnny Hartnett in January.
Hartnett had originally replaced Dragic in 2019 when the latter became chair.
Meanwhile, Albert Simsensohn has been promoted to COO, Andrei Dusu has been named chief product officer and Sameen Jalal is the new CTO.
Betfred has appointed Nick Cockerill as chief product officer. As noted last week, Cockerill announced previously he was leaving Stats Perform. Adi Dagan is the new senior director of partnerships of the gaming-centric CRM marketing solutions firm Optimove. Delaware North has appointed Jason Gregorec as president of its gaming division. Sports betting and lottery software provider Fincore has appointed Nemanja Maric as CTO.
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Fox in the picture
Little Lord Fuckleroy: Lachlan Murdoch, CEO at Fox, said the company was in the process of obtaining the necessary gaming licenses for it to take up the option to buy an 18.6% share of FanDuel.
Speaking to a Goldman Sachs communication and technology investor meeting, Murdoch said Fox remained “tremendous believers” in sports betting.
“It drives engagement with sports, whether it’s football or baseball or any of the sports that we proudly broadcast.”
Fox news: Recall, in November 2022 an arbitration tribunal valued FanDuel then at $22bn in a ruling that was welcomed at the time by owner Flutter. This would value Fox’s option at ~$4.1bn.
Flutter CEO Peter Jackson said it provided certainty on “what it would cost Fox to buy into this business, should they wish to do so."
Fox has the option to buy the stake at any point up until 2030, with the final price determined by a yearly 5% increase in the value of the business.
Table manners: Murdoch told the GS conference that Fox was always going to be “reluctant to leave $2bn on the table,” referring to a Goldman Sachs valuation that put a price of $35bn on FanDuel.
That $2bn would appear to refer to the difference between the ‘official’ FanDuel value and that of GS.
The end of the road: The tribunal decision also denied Fox’s claim against Flutter in the matter of Fox Bet that the latter “failed to provide commercially reasonable resources” to make it a success.
Fox Bet was finally shuttered in July 2023 after failing to make more than a dent in any US state.
Fox retained the brand name alongside the rights to Fox Bet Super 6.
Election betting goes live
All things go: Kalshi and new entrant Interactive Brokers have gone live with the first legal election bets in the US, hours after US District Court Judge Jia Cobb denied the Commodity Futures Trading Commission’s repeated requests to block the listings.
Portents: Amping up the pomposity, Kalshi CEO Tarek Mansour said in a statement that “now is finally the time to allow these markets to show the world just how powerful they are at providing signal amidst the noise and giving us more truth about what the future holds.”
Kalshi went live overnight but it is set to be joined by newcomer and financial trading giant Interactive Brokers.
According to a report from the WSJ, it will launch markets on the presidential election as early as next week.
Venture capital firm Yolo Investments manages in excess of €500m in capital across 100 exciting fintech, gaming and blockchain companies. The Yolo Investments' Gaming fund, regulated by the Guernsey Financial Services Commission, has taken positions in fast-growth suppliers and operators, including Dabble and Enteractive. Yolo Investments (yolo.io) wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat about innovative products which can plug into our investment ecosystem.
GiG split
Knowing me, knowing you: Gaming Innovation Group has set the date for the split between the gaming affiliate business, to be called Gentoo Media, and the GiG platform business, which will retain the GiG name. The division will occur on September 24.
The company said third-party advice suggested GiG Platform was worth 14% of the current value of the company.
But it noted there was no guarantee it would retain that level of value once trading in GiG Platform begins in Stockholm.
Recall, in its Q2 earnings Gentoo Media generated revenues of €30.3m, up 39% YoY, and EBITDA of €14.8m, up 43%. In comparison, GiG Platform saw revenues decline 22% to €7.3m and an adj. EBITDA loss of €1.6m.
Earnings in brief
Golden Matrix: The wholly owned Meridianbet enjoyed a record month in August with iCasino operations seeing all-time high revenues, 13% above the average for 2024. Sports betting was 9% above the average for 2024.
Analyst takes – hold data
Street cred: ESPN Bet has made a credible start to the new football season offering up the most favorable prices for punters, according to data provided to the analysts at Truist by HoldCrunch.
According to the figures, ESPN leads by a slim margin when it comes to theoretical hold on 6.6% vs. FanDuel’s 7% in week 1 of the NFL season.
DraftKings was third at 11%, followed by BetMGM (12%), Caesars (15%) and the outlier Fanatics with 24%.
Mission critical: The Truist team said it was “encouraged” by the data, suggesting ESPN Bet was competitive on price and they saw this as being “critical, especially as the platform looks to attract a wider audience, including those seeking more favorable prices.”
Swimming with sharks: Noting that FanDuel and DraftKings continued to “stay in the same swim lane,” albeit with FanDuel “consistently more favorable,” the Truist team made the point that a “sizable opportunity” might emerge if either started to visibly alter odds to combat higher taxes.
Recall, DraftKings CEO Jason Robins said last week the company might seek “some other sort of solution” than the quickly buried player surcharge to combat higher taxes.
Truist reported HoldCrunch as suggesting that if DraftKings and FanDuel choozse to improve their hold they could each claw back ~$240m annually.
The analysts said if this happens HoldCrunch foresees the increases as “more gradual, with the two operators likely moving in tandem with one another.”
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Calendar
Sep 25: Flutter investor day
Oct 17: Entain
Oct 24: Betsson, Evolution
Oct 25: Kindred
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