As Brazil approaches the one-year anniversary of its regulated online gambling market, industry stakeholders are assessing the initial success and challenges of this major legislative shift. The regulated market, which began on January 1, 2025, marked the end of extensive delays in Brazil’s efforts to bring its expansive online betting sector under federal control. Initially, 14 operators were granted full licenses, and this number has now expanded to over 80. The move was aimed at formalizing the sector and ensuring regulatory oversight, yet the licensed environment has faced several challenges, with potential tax increases and new advertising restrictions anticipated in the coming year.
Throughout 2025, the transition from an informal to a federally licensed market environment has been notable for the speed with which operators adapted. Hugo Baungartner, Chief Business Officer of Esportes Gaming Brasil, commented on the rapid adaptation, stating, “The market responded well to the restructuring necessary for compliance, underscoring a movement toward a more mature and professional phase.” The investment in technology, compliance, and workforce has been significant as operators adjusted to the new regulatory landscape.
Initially, operators expressed concerns about friction in the registration and onboarding processes, primarily due to stringent Know Your Customer (KYC) requirements. These mandates, which include facial recognition and detailed personal data submission, were met with resistance as players adjusted. Baungartner noted that while initial resistance was expected, the sector has seen improvements in the ease and speed of verification processes. This development suggests that players are becoming more familiar with the necessity of identity verification for security.
Despite advancements, the presence of illegal operators remains a critical issue. Estimates suggest that unauthorized entities still control a significant proportion of the market, with figures ranging between 41% and 51%. Udo Seckelmann, head of gambling and crypto at Bichara e Motta Advogados, highlighted the ongoing challenge of combating the black market, noting, “Efforts to address illegal operations should have started earlier, and more stringent measures are still needed.”
One notable attempt to curtail illegal activity has been the blocking of over 18,000 illegal betting sites by the national telecoms operator. However, Seckelmann argues that this is not the most effective strategy. He advocates for stricter enforcement against financial providers that facilitate transactions for unlicensed sites. The collaboration between the SPA and Brazil’s Central Bank to target payment providers shows potential, but the efficacy of these measures remains uncertain.
The looming possibility of tax increases poses another significant threat to the legal market’s growth. A proposal for a gradual increase in the tax rate on gross gaming revenue has been put forward, with anticipated rises to 13% in 2026, 14% in 2027, and 15% by 2028. Additionally, the proposed CIDE-Bets measure, which would impose a 15% tax on player deposits, could severely impact channelisation by driving players towards illegal operators offering better financial terms.
The potential for consolidation within Brazil’s online gambling sector is also under discussion. With market leaders such as Betano, Superbet, and Bet365 commanding nearly half of the market share, smaller operators may struggle to compete. This scenario could lead to mergers and acquisitions as companies look to scale operations to remain viable. Christian Tirabassi of Ficom Leisure has predicted that consolidation will lead to a reduced number of dominant players, potentially strengthening the market’s stability in the long term.
Looking ahead, the retention of market stability and continued growth will depend on the effective implementation of regulations aimed at curbing illegal activities and managing the implications of increased taxation. Stakeholders like Baungartner emphasize the importance of maintaining robust compliance measures and leveraging Brazil’s payment infrastructure, such as the Central Bank-operated Pix system, to enhance enforcement capabilities.
As Brazil enters its second year of regulation, addressing these critical challenges will be key to ensuring the sustainability of its online gambling market. The success of these efforts will significantly influence whether the groundwork laid in 2025 can withstand future pressures and foster a healthy legal market environment.
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