Codere Online Dodges Brazil Betting Ban, Focuses on LatAm Expansion

Codere Online Avoids Brazil Betting Ban Fallout – LatAm Expansion Strategy Shifts to Regulated Alternatives

Key Takeaways

• Codere Online avoided financial losses in Brazil after President Luiz Inácio Lula da Silva banned the licensed sector in late September.
• The operator currently functions in Mexico, Colombia, Panama, and Argentina, with plans to assess Chile, Peru, and Uruguay for future entry.
• A proposed 2% levy on online slot winnings in the Buenos Aires province complicates local expansion plans for the company.

Brazil Market Closure Validates Conservative Investment Strategy

The launch of Brazil’s regulated betting market at the start of 2025 was widely anticipated by the international gambling industry. The market launch was initially viewed as a seismic moment for the sports-loving nation. International companies actively sought entry to capitalize on the vast audience.

Codere Online chose to keep the market at arm’s length due to concerns regarding regulatory instability and high financial requirements. This cautious approach shielded the company from sudden policy changes. President Luiz Inácio Lula da Silva implemented a ban on the licensed sector in late September.

The closure eliminated a market projected to generate up to BRL16 billion ($3.18 billion) in government tax revenue by the end of 2026. Codere Online CEO Aviv Sher stated the company dodged a bullet by staying out of the jurisdiction. The executive noted that the government broke an agreement with regulated brands.

Competitor Investments Face Uncertain Future After Government Reversal

Many global operators flocked to the Brazilian market before the recent shutdown. Flutter acquired a 56% stake in NSX Group, the owner of Betnacional, in a deal valued at upwards of $350 million. Entain and Betano also established a licensed presence in the country prior to the ban.

These operators invested heavily with expectations of returns through sponsorship and marketing deals. Sher explained that significant operator funds flowed into the market without any prospect of a return. He argues that changes affecting the market threaten operators that invested heavily in anticipation of a more predictable regulatory environment.

The fallout raises concerns across the broader Latin American gambling landscape. Codere Online is closely monitoring whether the sudden regulatory shift in a nation of over 200 million people will influence other regional authorities. The industry will continue to monitor the situation as other regional regulators evaluate the impact and response.

Peru Emerges as Transparent Alternative While Chile Experiences Delays

Codere Online currently operates in Mexico, Colombia, Panama, and Argentina. The company remains interested in expanding its Latin American footprint, specifically targeting Chile, Peru, and Uruguay. Sher mentioned that he expects 2027 to be an active year for the business.

Peru presents an organized regulatory environment that has already attracted operators like Betsson, Bet365, and Stake. Codere Online is opting to sit on the fence in the short term to observe how the market evolves regarding player acquisition costs and lifetime values. The company plans to monitor competitor performance before making a final entry decision.

Expansion into Chile is proving frustrating due to persistent political delays. Plans for an online gambling bill began in 2021 but remain stuck in political limbo. Sher noted that grey market operators continue to sponsor teams and operate in Chile, resulting in lost tax revenue for the government.

Proposed Tax Increases Complicate Buenos Aires Province Expansion

Codere Online currently holds authorization to operate within the City of Buenos Aires. The company is now pursuing a broader license that covers the entire province of Buenos Aires. This province represents approximately 40% of Argentina’s total population.

The legal framework in the province limits the market to a maximum of seven online gambling licenses. Current license holders include Betano, Betsson, Bet365, and Stake. The regional regulator recently introduced a 2% levy on online slot winnings.

Sher indicated this new tax could cut operator profits by approximately two-thirds. This financial pressure makes the province less attractive but could create opportunities if existing operators choose to exit. Codere Online continues to treat Argentina as a focus market despite the potential profitability constraints.

Our Assessment

Codere Online’s strategic decision to avoid the Brazilian market highlights the financial risks associated with unpredictable regulatory frameworks. The sudden closure of the licensed sector stranded significant investments from major competitors. Prioritizing stable regulations over market size proved beneficial for the company.

The operator’s focus on structured markets like Peru and its cautious approach to taxation issues in Argentina demonstrate a calculated expansion strategy. Delays in jurisdictions like Chile underline the ongoing challenges operators face when navigating Latin American gambling legislation. Future regional growth will depend on regulators providing transparent and economically viable conditions for international operators.