When Brazil officially launched its licensed online gambling market on January 1, 2025, operators faced steep entry costs. According to VEJA Negócios, companies had to pay R$30 million for an operating licence, contribute R$5 million to a mandatory guarantee fund, and maintain a minimum net worth of R$30 million. In addition, launching operations required investments of at least R$40 million, excluding marketing expenses.
At the same time, marketing costs soared. Flamengo’s jersey sponsorship alone reached R$268 million per year, while Corinthians secured a deal worth R$103 million annually. Despite these figures, the gamble appeared justified. By mid-2025, 97 licensed companies operated 167 brands, generating more than R$35 billion in gross gaming revenue during the first half of the year.
However, a major problem quickly emerged. Brazilian players continued to access thousands of illegal online gambling sites that paid no taxes, licensing fees, or compliance costs.
Illegal Operators Rapidly Gain Market Share
Initially, regulation delivered strong results. In the first quarter of 2025, licensed platforms captured 55% of online bets, driven by aggressive marketing campaigns. Yet by the second quarter, their market share had dropped to 45, raising alarm across the industry.
“The regulation was well designed, and legal betting platforms quickly took the lead,” said André Gelfi, president of the Brazilian Institute for Responsible Gaming (IBJR). “However, illegal operators adapted just as fast and continue to grow without an effective crackdown.”
As a result, illegal platforms now dominate the market. They exploit consumer protection rules and compete through what the industry describes as the “three Ps”: price, product, and promotion. Without regulatory constraints, these sites offer higher odds, prohibited bonuses, and instant access. They also bypass age verification, facial recognition, and anti-money laundering controls, placing players at serious risk.
Growing Consumer Risks and Enforcement Gaps
The scale of the problem has become increasingly clear. Illegal gambling platforms flood Brazil’s digital space with an estimated 22,000 promotional messages every day, targeting users under 35 through mid-tier influencers, WhatsApp, and Telegram.
Meanwhile, minors can gamble freely, and self-excluded players face no restrictions. In some cases, illegal sites disappear entirely after players win large sums, leaving winnings unpaid. A study by Instituto Locomotiva revealed that 61% of Brazilians have placed at least one bet on an illegal platform, while 72% cannot distinguish licensed operators from illicit ones.
Authorities have now identified 2,316 illegal operators compared to just 167 licensed brands, creating a ratio of nearly 14 to 1. “Tax evasion, deception, and exploitation of gambling addiction occur in the illegal market,” said Guilherme Figueiredo, commercial director at Betano. “Unfortunately, the damage to reputation affects the entire industry.”
Looking Abroad for Effective Solutions
So far, enforcement efforts in Brazil remain limited. Reports indicate that the Secretariat of Prizes and Bets (SPA) employs fewer than 50 staff members, with only five responsible for monitoring illegal gambling websites. Blocking sites has delivered little impact, as new domains appear almost immediately. Consequently, authorities have shifted their focus toward disrupting payment flows and cutting off financial access for unlicensed operators.
Other jurisdictions offer useful lessons. In the Philippines, regulators significantly reduced illegal gambling by targeting websites, communication channels, payment systems, and suppliers simultaneously. Between 2023 and 2025, the illegal market share fell from 93% to 46%, supported by advanced intelligence tools.
Brazil has begun moving in a similar direction. Working with U.S.-based firm EtherCity, the ANJL has helped develop software that detects illegal betting sites and payment routes through simulated Pix transactions. The system is expected to become fully operational by early 2026.
A Race Against Time
Ultimately, Brazil’s battle against illegal gambling is also a race against time. Each month of delay costs the legal economy billions of reais and leaves millions of citizens exposed to fraud and harm. Until enforcement matches the scale of the challenge, illegal operators remain the only clear winners in this escalating turf war.
