Betsson's Strategic Expansion in Latin America and M&A Readiness: A High-Conviction Play in the Global Gaming Sector

The global gaming industry is undergoing a seismic shift, driven by digital transformation and regulatory liberalization in emerging markets. At the forefront of this evolution is Betsson AB, a Swedish gaming giant that has strategically positioned itself to capitalize on Latin America's explosive growth while maintaining financial discipline and M&A agility. With a robust EBITDA margin, a clear regional focus, and a pipeline of acquisition opportunities, Betsson presents a compelling case for investors seeking exposure to a high-growth, capital-efficient business model.

Regional Growth Momentum: Latin America as a Strategic Anchor

Betsson's expansion into Latin America has been nothing short of transformative. From 2023 to mid-2025, the region transitioned from a promising market to a core revenue driver, with Q2 2025 revenue surging 35.4% year-on-year to €84.7 million. This growth is anchored in Argentina, Peru, and Colombia, where Betsson has leveraged localized product development and strategic partnerships to outpace competitors. The launch of a new mobile app in Argentina, tailored to local preferences, and a commercial hub in Buenos Aires—supporting operations in Peru, Colombia, and Mexico—demonstrate the company's commitment to hyper-localization.

Notably, Betsson's partnerships with Argentine football clubs like Boca Juniors and Racing have amplified brand visibility, creating a flywheel effect of customer acquisition and engagement. These initiatives are paying off: customer activity and deposit levels in Argentina and Peru have risen sharply, underpinning the region's role as a key growth engine.

While Brazil remains a long-term target (with a provisional license granted in January 2025), Betsson's leadership is prioritizing maturity in Spanish-speaking markets before scaling into Brazil. This cautious approach mitigates regulatory risks while allowing the company to consolidate its leadership in Peru and Argentina.

EBITDA Resilience: Balancing Growth and Profitability

Betsson's financial resilience is a testament to its disciplined operational model. In Q2 2025, the company reported an EBITDA margin of 27.7%, up from 27.1% in the first half of 2024, despite the challenges of scaling in volatile markets. Group EBITDA for H1 2025 reached €161.8 million, reflecting a 8% year-on-year increase. This performance is underpinned by strong cash flow generation—€127.5 million in operating cash flow for the first half of 2025—and a net cash position of €152 million, with an equity ratio of 60%.

The company's ability to maintain margins while investing in growth is critical. For instance, the integration of Betsson's proprietary sportsbook into Belgium's BetFirst platform and the launch of localized apps in Argentina have enhanced scalability without eroding profitability. This balance between reinvestment and margin preservation positions Betsson to weather macroeconomic headwinds, particularly in Latin America, where regulatory and currency risks persist.

M&A Positioning: Strategic Acquisitions as a Catalyst for Shareholder Value

Betsson's M&A strategy is another cornerstone of its value proposition. While the company recently withdrew its bid for Dutch operators Holland Gaming Technology and Holland Power Gaming due to regulatory delays, CEO Pontus Lindwall emphasized that the firm is “in the strongest position ever” for strategic acquisitions. With a robust balance sheet and a focus on Western Europe and Latin America, Betsson is well-positioned to pursue deals that enhance its market share or diversify its revenue streams.

The company's 2019 acquisition of Suaposta, a 75% stake in a Brazilian sportsbook operator, is a prime example of its patient capital deployment. This move laid the groundwork for a full license in Brazil, a market expected to mature rapidly as regulatory frameworks evolve. Similarly, Betsson's recent expansion into Georgia and Lithuania via its global flagship brand highlights its willingness to test new markets before scaling.

Investment Thesis: A High-Conviction Play for Long-Term Gains

For investors, Betsson represents a rare combination of growth, profitability, and strategic flexibility. The company's Latin American operations are not only a revenue driver but also a proving ground for scalable, localized strategies. Meanwhile, its EBITDA resilience and strong cash flow generation provide a buffer against market volatility, ensuring that growth initiatives are sustainable.

The M&A pipeline further enhances long-term shareholder value. By targeting underpenetrated markets and complementary assets, Betsson can accelerate its expansion while leveraging its existing infrastructure. The withdrawal of the Dutch acquisition bid, though a short-term setback, underscores the company's prudence—prioritizing quality over speed in a sector where regulatory scrutiny is intensifying.

Conclusion: Positioning for a Structurally Attractive Sector

The global online gaming market is projected to grow at a compound annual rate of over 10% through 2030, driven by mobile adoption and regulatory reforms. Betsson's dual focus on Latin America and strategic M&A places it at the intersection of these trends. With a strong balance sheet, a track record of profitable growth, and a leadership team that balances ambition with caution, the company is well-positioned to outperform industry benchmarks.

For investors with a 3–5 year horizon, Betsson offers a compelling high-conviction play. Its ability to navigate regulatory complexity, execute localized strategies, and deploy capital effectively makes it a standout in an increasingly competitive sector. As the company continues to scale in Latin America and explore M&A opportunities, its shares warrant a strategic allocation in a diversified portfolio.