Codere Online's deliberate restraint in Brazil has proven prescient. While major operators including Flutter, Entain and Betano committed substantial capital to the newly licensed market at the start of 2025, the Nasdaq-listed company kept its distance from what CEO Aviv Sher calls regulatory quicksand. When President Luiz Inácio Lula da Silva shut down the licensed sector in late September, those heavy-hitting competitors were left nursing significant losses. Codere, meanwhile, watched from the sidelines.

The Cost of Entry

Flutter's $350 million acquisition of a 56% stake in NSX Group says it all about operator ambitions in Brazil. A market of over 200 million people with a sports-obsessed population? That's tantalising opportunity. Projections suggested the sector would generate up to BRL16 billion ($3.18 billion) in tax revenue by the end of 2026. Yet within months, the entire licensed framework collapsed.

Sher's comments to iGB reveal little sympathy for those caught out. "The government broke an agreement," he says pointedly. Operators invested hundreds of millions expecting stable returns through sponsorship deals, marketing commitments and ongoing operations. Instead, they're facing write-downs and wasted expenditure.

Regulatory Instability as Strategy

Codere Online's approach stands in sharp contrast to the herd mentality that gripped much of the sector. Rather than chase headline growth, the company adopted what Sher calls "a conservative approach to protect our investors." This wasn't caution born of timidity. It was calculated risk management grounded in flagging regulatory uncertainty and tax volatility.

That restraint now looks like strategic foresight. Sher's willingness to walk away from Brazil, regardless of its enormous addressable market, speaks volumes about how seriously Codere takes governance risk. In markets where governments can unilaterally terminate licensing agreements without compensation, the financial calculus shifts dramatically.

Broader Implications for Latin America

Codere Online isn't dismissing Brazil as an isolated incident. Sher acknowledges that when a market of Brazil's size undergoes sudden regulatory upheaval, ripple effects typically follow across the region. Other regulators will watch closely. Operators already in neighbouring markets will reassess their exposure.

That said, Codere isn't abandoning Latin American expansion altogether. The company remains active in Mexico, Colombia, Panama and Argentina. Peru, Chile and Uruguay remain on the radar as potential opportunities, though again with characteristic caution.

Peru and the Waiting Game

Peru presents an interesting case study in Sher's philosophy. The market is regulated, transparent and organised unlike Brazil's chaotic final chapter. Yet Codere is holding back deliberately. Other operators have already committed capital; Betsson, Bet365 and Stake hold licences. Rather than rush in, Sher wants to observe how competitors perform, measure customer acquisition costs and lifetime values, and make an informed decision later.

Chile and Uruguay present different hurdles. Both lack online gambling frameworks, creating a waiting period that Sher views as frustrating but necessary. Chile is particularly vexing, with regulatory proposals stalled since 2021 despite ministerial promises of imminent progress. Meanwhile, unlicensed operators continue to capture revenue and sponsorship opportunities that governments could legitimately tax.

"I think they are taking their time. For me, it's always a mistake," Sher observes. Yet Codere's patience suggests the company will move decisively once regulatory clarity arrives, rather than scramble for early mover advantage.

Conservative Strategy as Competitive Edge

Brazil's implosion has reframed what might otherwise look like missed opportunity. Codere Online's disciplined approach to market entry, its willingness to forgo first mover advantage, and its skepticism of regulatory stability claims now appear as fundamental competitive strengths. As Sher notes simply: "We dodged the bullet."

In an industry where aggressive expansion often attracts investor enthusiasm, Codere is demonstrating that knowing which battles to avoid can be just as valuable as knowing which to fight. That lesson may prove increasingly important across Latin America.