Part 3: The online sports
Part betting
3: Mobile
opportunity
and more
Table 2: Morgan Stanley global gambling market comparisons
Gambling
market comparisons UK France Italy Spain Nordics Brazil-
base Brazil-
bull Brazil-
bear
Gambling as % of GDP 0.7 0.5 1.2 0.8 0.5 - - -
Sports betting
as % of GDP 0.13 0.12 0.09 0.06 0.1 0.08 0.12 0.02
2.975 2.346 1.327 637 1.127 1.121 1.593 0.275
Sports betting
spend per head (£) 54 44 26 17 52 5.4 7.6 1.3
Sports betting
spend per adult (£) 71 57 34 22 69 7.3 10.4 1.8
Sports betting (£bn)
Source: Morgan Stanley
regulated global gaming markets.
Morgan Stanley put forward
three potential outcomes for sports
betting in Brazil.
1. The base case
The team suggests that the market
could be worth up to £1.1bn or
BRL5.6bn should it be an open
licensing regime. This would see
sports betting as a percentage of
GDP hit 0.08%, which is at the lower
end of the European precedents
of between 0.06%-0.13%. It also
implies sports betting spend per
head of £5.40.
2. The bull case
In this scenario, the market would be
worth upwards of £1.6bn within five
years, using France as its baseline.
The analysts suggest some shared
characteristics between France and
Brazil, including a dominant lottery
segment (which stands at 43% of
gross win in France) and an absence
of a legal gaming machine segment.
The 0.12% of GDP represents a
spend per head in Brazil of £7.60.
3. The bear case
This final model represents a
figure roughly equivalent to the
current spend of sports betting
in the offshore market. Perhaps
with an eye on the bingo example,
this scenario would assume the
government opts for an impractical
licensing regime and a prohibitive
tax rate (i.e. above the levels already
announced). Sports betting in this
case would only reach 0.02% of GDP,
or around a fifth of the precedents
from across Europe. Spend per head
would be just £1.30.
Optimistic signs
There are reasons why the base
and bull case should be favoured,
suggests the Morgan Stanley team.
•First, though the bingo experiment
was clearly problematic, it does
prove the appetite among Brazilians
for gambling products beyond
the lottery. For a brief period from
the mid-1990s to the early 2000s
gambling spend as a percentage of
GDP rose to 0.38%.
•Second, the Morgan Stanley
team also notes that comments
from GVC, which operates the
market leader Sportingbet, that
the offshore market is growing
“healthily”. (More on GVC/
Sportingbet below).
•Last, the team also notes that, as
has been the case with most other
regulating markets, liberalisation
tends to lead to growth due to
increased social acceptance,
higher awareness from increased
marketing, reduced payments
friction and improved product
quality driving better penetration.
There is, indeed, widespread
optimism over the Brazilian
opportunity. Pointing to the
popularity of the illegal jogo do
bicho game and the remaining
underground bingo halls, Munhoz da
Rocha from BetConsult says Brazil is
one of the “sleeping giants”.
“Even though gambling is illegal,
about 20 million Brazilians gamble
every day on jogo do bicho,” he says.
He adds that he believes the illegal
slots market is worth up to $1.13bn
a year.
BRAZIL The regulated opportunity in Latam’s largest market
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