Better Collective CEO says Brazil still holds “uncertainty” following regulation
Jesper Søgaard explains his thinking around the South American market after the affiliate said 2025 revenue and EBITDA could face €50m blow
Better Collective CEO Jesper Søgaard has said the affiliate giant has to be “realistic” about the current state of the Brazilian market after warning of a potential €50m (£41.4m) hit from the country this year.
Speaking on an analyst call following the Copenhagen-based firm’s Q4 and full-year 2024 results being released, Søgaard gave further colour on Brazil after the reported detailed key financial impacts the business is expecting.
He noted a slowdown as Brazil prepared for the launch of the regulated market on 1 January 2025, with the region not expected to return to growth until 2026 for the affiliate.
Better Collective said it anticipates a 50% to 70% decline in Brazilian revenue-share income in the short term, along with a €30m to €50m impact on revenue and EBITDA before special items in 2025.
The market accounted for 19% of total group revenue in 2024, equating to around €70m.
Speaking to analysts, Søgaard said he still retains strong hopes for Brazil but that there is much more to be understood post-regulation.
He also pointed to the Brazilian Serie A, the country’s top football league, having not yet started as a key hindrance.
The Serie A will kick off at the end of March, with operators and affiliates alike expecting football-crazed Brazilians to heavily engage with the sport.
Søgaard said: “There’s no doubt we sense a demand in the market. It’s probably worth noting that we are still in the phase where the Brazilian Serie A is not active.
“We have some uncertainty has to how will the market play out when the main football league is live.
“The other part is that we have seen a lot of sportsbooks getting their licences. [Some are] awaiting the full licence and others [are] wanting to get a licence and get into the market.
“It’s a development where we’re definitely optimistic but we also have to be realistic about how much we actually know right now.”
Better Collective CFO Flemming Pedersen, speaking on the same call, suggested the affiliate is comfortable with markets transitioning to local regulation.
The finance chief drew comparisons against European markets, albeit stressing the size of Brazil and complex changes to the regulatory framework made it a different beast.
Pedersen said: “We have seen markets, not the size of Brazil, but we have seen markets regulating. This is based on our prior experience and insights into the Brazilian market for some years.
“We have seen Germany and Sweden also going through the same process from an international [dotcom] market to a local market with local taxation. In this case, however, it is a bit special because there are a lot of requirements for both operators and companies like us.”
Better Collective’s shares in Stockholm – its primary listing – are down 4.4% on the day at the time of writing to SEK112 (£8.31). The business released its Q4 report post-market close yesterday, 19 February.
Revenue for the final three months of the year rose 13% to €96.2m, although new depositing customers slumped 15%.