Flutter tipped to pay £1bn for Brazilian gaming group Betnacional

Flutter Entertainment is set to take an estimated £1 billion bet on the Brazilian market after entering talks to buy one of the country’s biggest gambling operators.

The company, which declined to comment, is believed to have made a formal offer for Betnacional, Brazil’s fifth biggest gambling operator. It is owned by the British-based NSX Group, having been founded in August 2021.

According to a report by Next.io, Betnacional has a market share of about 7.3 per cent, some way behind Betano, the market leader with 25.1 per cent. The No 2 player is Bet365, based in Stoke, with 16.3 per cent, with Entain holding a 9.4 per cent share through its Sportingbet brand.

Betnacional has a strong gaming business, notably in casino gambling and poker, but it is understood to be focused more on sports betting, targeting obsessive Brazilian football fans. During the past two weeks, it has shifted some of the focus on to the Olympic Games in Paris.

Analysts suggested that Flutter, which owns FanDuel, the leading American operator, was taking advantage of its decision to move its primary stock market listing at the end of May from the City of London to Wall Street, having already moved its operational headquarters across the Atlantic.

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Peter Jackson, 48, the Flutter chief executive, said recently that the group had a strong balance sheet, which gave it the ability to pursue deals or to return cash to shareholders. He also highlighted the potential of the Brazilian market when regulated betting goes live on January 1.

Flutter has been tipped, too, to team up with Boyd Gaming in a potential $9 billion bid for Penn Entertainment, an American rival, amid criticism from an activist investor over Penn’s “misguided interactive strategy”.

David Brohan, a gaming analyst at Goodbody, the broker, said he was positive about Flutter’s Brazilian potential. “While it is hard to assess profitability currently, given that the market has not yet regulated, we would expect Flutter to be able to drive meaningful cost and revenue synergies from any prospective deal,” he said.

JMP Securities reported in April from a meeting with David Jennings, the finance chief of FanDuel, that Brazil was regarded as a strategic market for Flutter and it was expected that the company would invest in “a local hero” brand to boost its market presence.

Flutter operates a range of online sports betting and iGaming brands, including FanDuel, Sky Betting & Gaming, Sportsbet, PokerStars, Paddy Power, Sisal, tombola, Betfair, MaxBet, Junglee Games and Adjarabet.

It was due to release its second-quarter financial results after the market closed on Tuesday. Its shares rose $3.09, or 1.6 per cent, to $191.39 in New York.