Better Collective issues profit warning on back of Brazil gambling ban

Organic revenue growth is now expected between 3-8%, previously between 7-12%, and EBITDA growth before special items in the range of -7% to +3%, previously 8-18%. It has also suspended its share buyback programme.

Better Collective said that continued uncertainty regarding the duration and ultimate outcome of the legislative process now underway, “Better Collective is currently unable to provide a sufficiently reliable assessment of the impact on its long-term financial targets”, announcing the suspension of financial guidance for 2027 and 2028.

With most of its revenue in Brazil coming from revenue share agreements with licensed operators, “[t]he ultimate financial impact will therefore depend materially on how Better Collective's partners respond to the new regulatory environment and the extent and timing of any changes to their operations”, said the business this morning.

The Provisional Measure is valid for an initial 60 days until 23 November 2026 with Congress either approving it as it stands – leaving the market prohibited – making material amendments to transition to a different regulatory structure or letting the measure lapse, which would reopen the market again under the previous framework.

The Nasdaq Stockholm and Copenhagen-listed group said that with lawmakers having the option to extend the initial validity period for a further 60 days, it would if this turned into a prolonged period introduce measures across its Brazil operations as well as related global functions to mitigate the financial impacts and trim its cost base, currently running at €10 million annually.

At the time of writing, the dual-listed stock had plunged 26% in trading this Monday 28 September. Investor reaction has been driven by the group's heavy investment in and share of business coming from the geo, with this on track for €45 million or 12% of group revenue in 2026 prior to Friday’s news.

Better Collective paid €176m for the 2024 acquisition of the Playmaker Capital assets while also navigating costly regulatory headwinds last year such as the welcome bonus ban and player re-registration requirement, which cut off revenue share deals from players sent to operators before the regulated market opened on 1 January 2025.   

The move from President Lula to revoke legislation he signed into law three years ago came little more than week ahead of the presidential election in which he is neck-and neck in the polls with Flávio Bolsonaro.

Bolsonaro subsequently dismissed the crackdown as "populist, hypocritical and politically motivated" during a campaign rally in Rio de Janeiro on Friday, reported Reuters.

BC in its statement added to the weight of industry opinion that the ban would not eliminate but redirect the underlying demand for betting towards offshore operators that paid no taxes in Brazil and adhered to no consistent standard of player protections.

 “Our concern is that a measure intended to protect consumers could ultimately dismantle a regulated ecosystem that was specifically created to protect them.”

Betting brands have also become one of the principal sponsors of Brazilian big 12 teams since the regulated market opened, a factor referenced along with rising household debt linked to gambling by Lula as his motivation for introducing the ban.

Bettors have until 5 October to withdraw funds from dot.br licensed operators, with sites and apps shutting down the following day. Operators are required to refund all withdrawn balances in full between 9 and 14 October.