Brunno Galvão, CEO of Crownstone Ventures, leads an American company, with Swiss and American capital, that is eyeing the newly regulated sports betting and online gaming market in Brazil. With R$350 million in cash, Crownstone, owner of the Elisa.bet platform, is preparing for a round of acquisitions.
According to Galvão, bets generate more than R$120 billion annually, on par with giants such as Vivo, Vibra and Ambev. With the regulation of betting, more than 100 companies requested licenses to operate in Brazil.
Changing betting market
Brunno Galvão predicts that, over the next two years, the government should increase supervision over unregulated companies. These companies still represent around 8% of the market. But he believes that this action will redistribute revenue among licensed houses, starting a consolidation process in the sector.
“I believe that, at the end of this process, around 60 companies will survive, increasing the average revenue of large houses to R$4 billion per year, while smaller ones will reach R$112 million”, stated Galvão.
Previous projections, made based on 136 bets, indicated that the 20% largest players would reach R$2 billion in revenue, while the others would reach R$56 million.
Sports betting represents 40% of the total activity in the betting market. Galvão explained that football, in particular, has become a stronghold for betting due to the alignment of the fan’s profile with that of the bettor.
The association of bookmakers with football clubs reinforces the credibility of the companies, in other words, this partnership reassures fans about the seriousness of the operation. On the other hand, other sports, such as volleyball and gymnastics, still have a limited market due to the reduced number of competitions.
However, the executive believes that betting can stimulate the creation of new championships, as is already happening in phenomena such as Baianinho de Mauá, which promotes snooker tournaments with betting.
Opportunities and returns
Galvão highlighted that in Europe, funds that invest in the betting sector record an average return of up to 18%. The businessman says he is confident that the same can happen in Brazil, even with companies’ profit margins being 15% to 18%.
Before taking over Crownstone Ventures, Brunno Galvão was a serial entrepreneur. Over the course of 15 years, he founded and presided over startups such as Remarcados, Super Prix, The Fresh and Labsvet. With a specialization in leadership from Stanford University, Galvão is also a writer.
