Aviv Sher, the CEO of Nasdaq-listed Codere Online, emphasizes a measured strategy for entering new markets. With Brazil’s licensed gambling sector recently shut down, he speaks to the foresight that guided Codere Online to avoid significant financial pitfalls.
At the beginning of 2025, Brazil was set to launch a regulated market for online gambling, anticipated to be a significant milestone for the country, which boasts over 200 million sports enthusiasts. International firms, including Flutter, Entain, and Betano, eagerly participated, with Flutter acquiring a 56% stake in NSX Group, which owns Betnacional, for a deal exceeding $350 million.
While these operators rushed into Brazil, Sher and Codere Online chose a conservative route, being intrigued by the opportunities but wary of the substantial investment and the potential for a volatile regulatory environment.
This cautious stance has proved beneficial for Codere Online. In late September, President Luiz Inácio Lula da Silva banned the licensed sector, closing off a market once projected to yield up to BRL16 billion ($3.18 billion) in tax revenue for the government by the end of 2026.
Sher believes staying out of Brazil was the right move, highlighting concerns about regulatory unpredictability and taxation as key factors in their decision. He asserted that substantial sums had been funneled into the market by operators, leading to a disconnect between expectations and actual returns.
"We dodged the bullet," Sher stated, lamenting the government’s broken agreements with brands that had invested vast amounts with the expectation of returns through various deals.
Reflecting on the broader implications of Brazil’s regulatory changes, Sher noted that significant shifts in such a large market could impact other Latin American countries. "Other regulators are watching closely to understand the impact and the response," he stated, indicating that the industry would continue to monitor developments in Brazil closely.
Even as Codere Online steers clear of Brazil, Sher maintains interest in expanding into other Latin American territories beyond their current operations in Mexico, Colombia, Panama, and Argentina, specifically targeting Chile, Peru, and Uruguay.
"I don’t think 2027 will be a boring year,” he remarked, while recognizing that market entry in Peru might be contingent on observing current competitors and market dynamics. Sher described Peru as more organized and transparent in its regulatory approach than Brazil, but indicated a cautious approach for now in seeing how the market unfolds.
In Chile and Uruguay, Codere Online is poised to move once online gambling regulations are established. Sher expressed frustration over Chile’s prolonged legislative process, noting the bill has stalled despite being initiated in 2021. He highlights the potential tax revenue loss for the government due to ongoing grey market operations as a consequence of delayed regulation.
With operations already authorized in the City of Buenos Aires, Codere Online is eyeing a broader license that covers the entire province, which represents about 40% of Argentina's population. However, the regulatory landscape presents challenges, including a cap on online licenses and a new 2% levy on online slot winnings. Sher voiced concerns that these taxes could significantly reduce profits for operators.
"It’s still a focus market for us," he said, expressing a desire to secure a broader license in Buenos Aires despite the current attractiveness of the market being diminished by new taxation policies.
