Rei do Pitaco Aims to Conquer Brazil’s Regulated Betting Market
One of the first to secure a full license in Brazil’s newly regulated betting market, Rei do Pitaco hopes to compete against a wave of international players. Following a similar path to successful US companies, CEO Kiko Augusto explains how the company’s strategy differs and how Rei do Pitaco’s daily fantasy sports (DFS) roots have prepared it for success.
Rei do Pitaco launched its DFS offering in 2019, anticipating the sports betting market that would soon be regulated in Brazil, which finally launched on January 1st.
It signed its first online sports betting partnership agreement with Kambi in 2022 – a deal that was renewed last October as it prepared for the transition from a DFS operator to a full-fledged sports betting site.
This is a strategy that has been hugely successful in the US with market leaders, FanDuel and DraftKings. Both evolved from DFS-focused operations to sports betting and igaming, together reaching $10.6 billion in revenue in fiscal year 2024.
The two were able to excellently leverage the large customer base acquired in the DFS era and transform it into sports bettors within their own companies.
But Augusto states that, although Rei do Pitaco has followed much of the DraftKings and FanDuel model, it is not just about “copying and pasting” the transition from the DFS model to sports betting in Brazil.
“We looked a lot at FanDuel and DraftKings,” Augusto says. “Other companies have tried to build what FanDuel and DraftKings did in Brazil, but they failed.”
“So we understood the behavior of fantasy fans and decided to build a product from scratch and based on Brazilians.”
Augusto warns that the advantage is not as great for Rei do Pitaco as it was for FanDuel and DraftKings, as the two US companies migrated to a newly legalized market after the repeal of PASPA in 2018. Brazil had a gray market between 2018 and the launch on January 1st.
“The advantage for DraftKings and FanDuel in the US was enormous,” Augusto continues. “For us, not so much. But even so, we have won many customers, a very large user base that gives us a great advantage in the regulated market.”
Product and Localization as Differentiators
The localization differential is something that Rei do Pitaco is betting heavily on, fitting into its data-driven approach led by Augusto.
Augusto’s strategy of “product, product, product” is what he hopes will turn Rei do Pitaco into a second screen for bettors watching sports in Brazil, helping the company achieve its goals.
“If we really are the best product on the market, I think market share will just be a matter of time,” explains Augusto. “And that’s what we focus on.”
Rei do Pitaco’s origin in DFS means that the company already has a sense of the preferences of Brazilian sports bettors and, although igaming is still a possibility, it will be sports that drive its growth from now on.
“For us, the main thing is sports betting,” says Augusto. “It’s the product we dedicate ourselves to the most. It’s the product we allocate the most resources to.”
“The sports betting side is a much more complex product to build. And that’s what we like, right? We like to build complex things.”
Rei do Pitaco is entering the sports betting market as a prominent local company alongside international giants, such as Betsson and MGM.
Rei do Pitaco is still far from competing financially with these giants, although its understanding of this fact is the origin of one of the company’s mantras.
“One thing we always say internally is that we are going to outperform competitors with intelligence, not with spending,” says Augusto. “You have companies like MGM coming to Brazil and spending millions of dollars. We are humble enough to say that we will never spend more than those guys.”
Rei do Pitaco’s legal director, Rafael Marchetti Marcondes, agrees with Augusto and believes that, thanks to a data-focused approach to marketing, the company can achieve impressive growth even with limited resources.
“This is a true mantra for us,” adds Marchetti Marcondes. “Because we don’t have the same budget as large international companies, so we need to think outside the box to identify opportunities that no one has seen yet.”
“Every penny we spend is monitored. We analyze the return. Everything is based on metrics, on data, and that’s how we work. We believe that perhaps, even with fewer financial resources, we can expand our business.”
No Fear of Retroactive Taxes
The cautious approach also extends to Rei do Pitaco’s decision not to operate in the gray market before regulation.
This means that the company went through a smooth licensing process, in addition to avoiding the concerns of other companies that may still have to pay retroactive taxes for activities carried out in the gray market.
“We were the third company to register, but I believe we were the first to complete all the documentation,” says Augusto. “So, we prepared for this moment.”
When asked about retroactive taxes, Augusto replies: “This is something we are not at all worried about, because we have paid taxes in Brazil since we founded the company in 2019.”
“For other companies, yes, this is a big deal. But for us, everything is fine.”
Building for the Future
Marchetti Marcondes reveals that the first signs for Rei do Pitaco are positive, with the initial numbers matching the company’s expectations.
“The numbers are growing very well, especially when we compare with the fantasy market,” declares Marchetti Marcondes. “Now we are operating in a much larger market. So I think that, for us, the expectations and the numbers are very good.”
Although Rei do Pitaco was inspired by the success of FanDuel and DraftKings, the company believes that its personalized approach to the Brazilian market will further expand its capabilities, despite the strength of its competitors.
Its strong user base since the DFS era, Augusto’s commitment to the product and the company’s mantra of outperforming with intelligence – and not with spending – should position Rei do Pitaco as a strong competitor in the Brazilian betting market.
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