Since last December, when a bill released sport betting in the country, regulation has been pending at the Ministry of Economy. The rules are expected to be published next month, opening the market for betting on all sports by granting public licenses. (Today, only horse racing betting - the niche in which Suaposta operates - and lotteries are allowed).
“Regulation will take our business to a new level,” André Gelfi, Suaposta's CEO, told the Brazil Journal. “With Betsson's know-how, technology and financial strength we can become one of the dominant players in this market.”
In the world, sports betting is worth over US$ 20 billion a year and growing at double-digit rates. Around here, KPMG estimates that they can move up to R$ 6 billion (US$ 1.47b) a year within 4-5 years, making Brazil one of the largest global markets.
Suaposta was born in 2016 within Codere, a sports betting multinational that is worth 350 million euros on the Spanish Stock Exchange. At the time, Gelfi was the head of the company in Brazil and led the project that gave life to the platform. In September last year, he teamed up with Fernando Corrêa Filho, then CFO of Codere Brasil, and the two acquired Suaaposta in a management buyout. (Corrêa's father, Fernando Ernesto, is one of the founding partners of RBS.)
Since then, the pair has been negotiating with global players for an investment in the company. Gelfi says he had more than one offer on the table - and that Betsson's check wasn't the biggest. But he decided on Swedish for the “cultural fit and because it was willing to prioritize Brazil with a long-term view.”
All proceeds from the capitalization will go to the company's cash and will be used mostly for marketing investments. Suaposta will also invest in improving the platform, which needs to be adapted to include new sports, and hiring new employees.
Gelfi and Corrêa remain in charge of the company. Their big bet - obviously - is football, which tends to represent over 90% of the sports betting market in Brazil. But the idea is also to include sports such as tennis, basketball, volleyball and UFC.
Today, only with horse racing, Suaposta moves close to R$ 25 million (US$ 6.15) per year, earning R$ 7 million (US$ 1.7m). With the new sports the expectation is of exponential growth. "If we have 10% share, we are talking about revenues of over R$ 500 million (U$S 123m)," says the CEO.
Other platforms are already exploring the Brazilian sports betting market, even before regulation. (During the World Cup many of them have been seen on local TV).
But, according to Gelfi, they are not licensed to operate in Brazil and act ‘by arbitrating Brazilian law’. “They capture customers here but operate with licenses and platforms registered in other countries,” he says.
Betsson, which was born in 1963 as a provider of restaurant slot machines in Sweden, now operates in eight European countries with sites such as Betsafe.com and Casinoeuro.com. The company is worth about US$ 500 million on the Stockholm Stock Exchange.
Source: Brazil Journal
