By M. Marin
NASDAQ: MRDN
READ THE FULL MRDN RESEARCH REPORT
BENEFITS OF GEOGRAPHIC DIVERSIFICATION STRATEGY
As Brazil moves to ban gaming, expect MRDN to maintain growth initiatives in other regions
Among Meridian Holdings’ (NASDAQ: MRDN) core strategies is its goal to diversify its revenue base across geographic markets, by operating segment and by channel. MRDN views the diversification of its operations across both B2B and B2C channels and geographic markets as a competitive advantage that also protects the company from contractions or interruptions in any single market or channel. We believe the benefits of its diversification are particularly evident as Brazil moves to ban online gaming.
Believe benefits of core diversification strategy particularly evident as Brazil moves to ban gaming
On September 25, the country’s president signed an order banning online gaming that took effect immediately but will expire within 60 days unless approved by Congress. Operators have expressed their intentions to challenge the order through legal routes, with trade bodies already bringing action to the Supreme Court. While research indicates that public support for the ban appears to be strong – research conducted by Bloomberg and AtlasIntel showed that 75% of the public agreed with it – it is expected to have negative consequences for the country’s economy.
Brazil’s regulated market is estimated at ~ $7.7 billion according to H2 Gambling Capital data, leading to about $1.87 billion in federal taxes paid in the January to August 2026 period. Moreover, the sector is estimated to employ about thousands. At the same time, a myriad of illegal gaming sites have apparently been created since the provisional ban went into effect. Given these factors, as well as vocal opposition from many of Brazil’s football clubs, there is a possibility, we believe, that the ban could be overturned.
Not expected to have material impact; expect expansion measures in multiple other markets
Nevertheless, it is notable that this is not expected to have a material near-term financial impact on MRDN. The company’s operations in Brazil are still ramping up and, reflecting costs to launch and grow operations, we believe margins likely are not at the level of those in more mature markets where MRDN operates. As we have noted in previous reports, although we have viewed Brazil as a potentially significant opportunity, the market is still in extremely early stages.
The company continues to advance its strategy to expand its global footprint, which is a core objective, as noted. As it implements expected growth measures, MRDN intends to prioritize expansion into new regulated markets, including Latin America and Europe, enhance AI-driven gaming innovation and boost operational efficiencies.
Examples include recent acquisition of Fairbet in Malta & sponsorship and also Expanse Studios’ strategic distribution agreement in Serbia
For example, Meridianbet recently acquired Fairbet Ltd., a licensed retail gaming operator in Malta. As a result of the transaction, Meridianbet holds 100% ownership of Fairbet’s operations across Malta and Gozo, adding nine new retail locations and bringing its footprint in the market to 20 total storefronts integrated under the Meridianbet brand. The company’s strategy regarding M&A has been to prioritize acquisitions in high-barrier markets where limited licensing to create structural competitive advantages. According to the company, Malta’s retail gaming sector operates under one of Europe’s most stringent regulatory frameworks. Only three licenses have been granted, and with the Fairbet acquisition, Meridianbet now holds two of the market’s three retail licenses. The other license is held by Izibet, the National Lottery operator.
Another recent example was MRDN’s sponsorship as an Official Partner of UFC Fight Night Serbia, the first MMA (mixed martial arts) event the Ultimate Fighting Championship (UFC) ever held in Serbia, which took place on August 1, 2026, at Belgrade’s Belgrade Arena. Meridianbet was founded in Serbia in 2001 and has operated in the market continuously since then. Moreover, such measures are consistent with Meridian’s promotional activities aligning its brand with high-profile sports figures or brands.
MRDN noted that the Meridianbet partnership with UFC, part of TKO Group Holdings, marks its highest-profile alignment with a global sports brand thus far, although Meridianbet has sponsored combat sports for years. UFC is a globally recognized MMA organization. Its more than 40 annual live events are distributed to an estimated one billion broadcast and digital households across 210 countries and territories, and its MMA athletes represent 75+ countries. These sponsorships come as Meridian continues to advance its B2B and B2C expansion strategy and as core Meridianbet operations continue to scale.
In addition, Expanse Studios, the company's proprietary game studio, continues to expand its content and distribution footprint. Expanse Studios recently signed a strategic distribution agreement with MaxBet, one of Serbia’s leading omni-channel gaming operators and a subsidiary of Flutter Entertainment plc (NYSE: FLUT, nr). Expanse also launched with new distribution partners such as MaxBet Serbia (part of Flutter Entertainment), Synottip, and Joker.lv, while also entering a North American distribution partnership with Bragg Gaming. Expanse Studios is a leading B2B iGaming content provider that specializes in slots, crash games, turn-based strategies, and card games. Expanse has a growing portfolio of more than 70 proprietary titles and 1,500+ casino brands across Europe, LATAM, and North America. The studio secured certifications in Latvia, Colombia, Portugal, and Slovenia, and enhanced player engagement with the launch of jackpots, tournaments, and its Achievo gamification platform. Reflecting expanded footprint and content access, Expanse 2Q26 revenue advanced 138% year-over-year and gross gaming revenue rose 90%.
We expect the company to remain focused on growth, organically and using strategic M&A that prioritizes acquisitions in high-barrier markets with limited licensing to complement organic growth. The company’s goal is to continue initiatives aimed at retention, repeat-deposit activity, and revenue contribution of the expanding customer base for conversion and retention of this base, to leverage its ongoing momentum. The company also expects to boost potential casino cross-selling opportunities.
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