Gentoo Media cuts 2026 guidance after Brazil betting ban

Gentoo Media has cut its full-year 2026 revenue guidance to €92m, down from a range of €97m to €100m, after Brazil’s government banned online fixed-odds betting and removed one of the affiliate group’s growth markets for the rest of the year.

EBITDA before special items is now expected at around €40m, against a previous range of €44m to €47m. Operating cash flow guidance falls to about €30m, from €32m to €36m. Gentoo last revised its outlook alongside its Q2 interim report on 26 August.

What Brazil was worth to Gentoo

Brazil generated around €3.8m in net revenue for Gentoo between January and August 2026. The company had planned for growth there in Q4, backed by its own investment and seasonal trading patterns.

The revised guidance assumes no betting revenue from Brazil for the remainder of 2026.

At the January to August average of roughly €475,000 a month, Brazil would have added about €1.9m over the last four months of the year, before any of the planned Q4 growth. That is well short of the €5m to €8m taken off revenue guidance, which brings in the second factor Gentoo cited.

Weaker Q3 trading

Gentoo said Q3 underperformed because of lower revenue from player activity, including lower sports margins in the latter part of the quarter.

On revenue-share deals, an affiliate earns a percentage of the net revenue its referred players generate. When bettors win more often, operator net revenue drops, and the affiliate’s commission drops with it.

What the provisional measure does

President Luiz Inácio Lula da Silva signed Provisional Measure (MP) 1,394 on 25 September 2026. It took effect on publication the same day.

The measure prohibits the operation, offering, intermediation and advertising of fixed-odds betting, covering bets on real sporting events and on virtual online games. Other lottery products remain authorised.

New deposits were banned immediately. Authorisations issued under the regulated framework end 30 days after publication, with no reimbursement for operators. In the meantime, licensees must close their sites, refund customer balances and keep records for five years. The Secretariat of Prizes and Bets (SPA) at the Ministry of Finance supervises the wind-down.

Operators that fail to comply face daily fines of R$200,000. App stores and internet providers that host betting content face fines of up to 10% of annual revenue, capped at R$50m.

The ban on intermediation and advertising reaches affiliates directly. Promoting licensed brands to Brazilian players is how companies such as Gentoo earned revenue in the market, and that activity is now prohibited.

Unlicensed operators moved in quickly. EpicWins reported that 428 illegal betting sites appeared within three days of the measure taking effect.

How the rest of the sector is responding

According to InterGame, Flutter and Betano have confirmed plans to take legal action. Flutter and Allwyn expect a material impact on their businesses, while Genius Sports and Meridian Holdings have said the effect on their operations will be limited.

The dispute has already reached Brazil’s Supreme Court.

The measure follows months of tighter policy from the Lula government, which in August blocked 6.2m people from betting. Brazil opened its regulated market in January 2025, so licensees that paid for authorisations are losing them less than two years in.

What happens next

A provisional measure in Brazil has the force of law for 60 days, extendable once by another 60, with congressional recess not counted. Congress must vote to convert MP 1,394 into law within that window, or it lapses.

Brazil holds general elections on Sunday, 4 October. The result is expected to influence which way lawmakers go on the measure.

Unless the measure is suspended by the courts or overturned by Congress, licences end on 25 October. For Gentoo, the €92m guidance already assumes zero Brazilian revenue, so any reversal before year-end would come on top of the new number. A ban that stands would carry the loss into 2027.

Source: Gentoo Media