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Sports betting companies have dominated Brazil in recent years, sponsoring football clubs, competitions and investing heavily in advertising. In 2023, the sector generated more than €19 billion, making it one of the largest global sports betting markets. Currently, 39 of the 40 teams/clubs in the top divisions of the Brazilian Championship (Brasileirão) have million-dollar contracts with betting companies, and more than 22 million Brazilians place bets monthly, according to the DataSenado Institute.
The 2025 regulatory reform
Since January 1, 2025, the sector has undergone a major transformation with the implementation of full regulation. Before that, betting had technically been legal since 2018, but without a clear regulatory framework, allowing foreign operators to operate without oversight. Without defined rules, many bettors faced problems with denied withdrawals, match manipulation and fraudulent practices, without any legal protection.
The government of current President Lula has taken advantage of the regulation to correct these flaws and increase revenue. Companies now need to be registered in Brazil, have a legal representative in the country and maintain financial guarantees, such as a €940,000 fund to cover unpaid prizes. In addition, each operator must pay €5.6 million to obtain an official license and can operate up to three brands in the Brazilian market. Of the 271 companies that applied for licenses, only 69 have been approved so far – 14 with definitive licenses and 55 provisional ones. This has led to consolidation in the sector, benefiting large operators while smaller companies struggle to compete. For new entrants, the minimum investment required to operate sustainably in Brazil is now around €19 million.
The structure of the betting market
The betting market can be divided into three main groups:
- Own companies – develop their own technologies, set the odds and manage the entire operation.
- Intermediaries – buy game packages from major suppliers, but control marketing and customer service.
- White-labels – outsource almost the entire operation, focusing only on the legal and financial aspects.
Sports betting continues to be the main attraction, accounting for around 30% of the sector’s revenue. However, online casinos, which offer higher profit margins for operators, account for 70% of total revenue. On average, 90% of the money wagered returns to players in the form of prizes, while 10% goes to bookmakers – this percentage is known as GGR (Gross Gaming Revenue).
Security, Fraud Prevention and Payment Systems
The regulation seeks to offer greater security to bettors, reducing fraud and ensuring greater transparency. All transactions must now be made via Pix, an instant payment system widely used in Brazil, and all bets are monitored in real time by the Sigap system, which detects fraud and money laundering. Furthermore, facial recognition authentication has become mandatory for deposits and withdrawals, making it difficult for minors to access the market.
Government Revenue and Taxation
However, the Brazilian government’s main interest is in collecting revenue. In addition to the cost of licenses, operators must pay 12% on gross revenue, in addition to other taxes that increase the total tax burden to 16%. Bettors, on the other hand, are taxed 15% on their net winnings.
Crackdown on Illegal Operators and Market Consolidation
Enforcement has been rigorous, resulting in the blocking of more than 9,600 illegal websites in just a few months. The market is also undergoing a process of mergers and acquisitions, with large international groups investing in Brazilian operators. One example is Flutter Entertainment, owner of Betfair, which acquired 56% of NSX Group (Betnacional) for more than €380 million.
Ongoing Challenges and Future Risks
Despite regulation, challenges remain. Some companies are criticizing requirements such as mandatory facial recognition, which would have reduced the number of bets by 40% by early 2025. In addition, the illegal market remains a concern. In the United Kingdom, for example, even after years of regulation, 6% of bets are still made illegally, and Brazil could face a similar scenario. The country is trying to avoid the mistakes made when it legalized bingo in the 1990s, when lack of control led to corruption and tax evasion scandals. With stricter rules and active oversight, Brazil is trying to balance the growth of the sports betting industry with consumer safety and increased government revenue.
Source: GMB, Veja
