DraftKings, MGM, Hard Rock Mull Entering Brazil’s Online Betting Market

DraftKings, MGM and Hard Rock Mull enter Brazilian online betting market

Last year, Brazil introduced regulatory guidelines for its online gambling market, a move expected to attract some of the industry's biggest players to Latin America's largest economy.

U.S. gaming giants DraftKings (NASDAQ: DKNG ), MGM Resorts International (NYSE: MGM ) and Hard Rock International are rumored to be exploring options to enter the region's most populous country.

The list of nearly 135 pre-registrants for a Brazilian online gambling license reads like a who's who of the gambling industry, including U.S. companies such as Bally's (NYSE: BALY ), DraftKings and MGM, as well as European sports betting giants Affiliates Entain and Flutter Entertainment (NYSE: FLUT ), among others.

For domestic iGaming and sports betting operators, the appeal of Brazil is easy to understand. U.S. state-level legalization is slowing amid widespread belief that California and Texas may take years to allow mobile sports betting. Brazil, on the other hand, has the right framework and is the sixth largest country in the world with over 209 million inhabitants.

Brazil could boost Rush Street Interactive’s appeal

Already considered an acquisition target, Rush Street Interactive (NYSE: RSI ) could see growing interest from potential acquirers as Brazil opens up its online gambling market.

The reason is simple. Brazilian regulators are widely expected to prioritize domestic companies and those with operations in Latin America when issuing licenses. Rush Street Interactive is the only U.S. gaming company with sports betting operations in Colombia and Mexico.

There are also rumors that the operator may eventually enter Argentina and Peru. If RSI succeeds in securing a Brazilian license, the company could become an attractive target for another U.S. operator that sees opportunity in Latin America.

Last month, Bloomberg reported that RSI had reached out to several potential buyers, including DraftKings, but the company has yet to publicly confirm such discussions.

Brazil could be the next big sports betting frontier

Brazil's status as the region's largest economy and most populous country is itself attractive to gaming companies, but there's much more to the country than meets the eye.

The country has no Las Vegas-style brick-and-mortar casinos and there are few signs that policy will change anytime soon, suggesting that iGaming may be popular with Brazilian punters who want to play table games.

When it comes to sports betting, Brazil is considered one of the most football-loving countries in the world. It has five World Cup titles, is the only country to have participated in all 21 World Cups, and holds a number of other records, including appearances, wins and goals scored.

The NFL is also growing in popularity there, with Sao Paulo set to host the league's first South American game in 2024. The NBA is also popular among residents of the world's tenth largest economy.