Brazil’s Betting Market: Regulatory Hurdles Mount

Brazil’s regulated betting market faced significant challenges in 2025, with illegal operators still dominating and new tax increases threatening industry growth despite the country’s position as a leading iGaming market.

Key Takeaways

• Illegal betting platforms still control 51% of Brazil’s online fixed-odds betting market despite regulation.
• The Brazilian government has approved a phased tax increase on GGR from 15% to 28% by 2028.
• Industry leaders are calling for more effective action against illegal operators and stable tax policies.

Regulatory Growing Pains

The first year of Brazil’s regulated betting market has proven difficult for operators in what stands as the world’s fifth largest betting market. Despite the country’s emergence as an iGaming powerhouse, unauthorized platforms continue to dominate the landscape.

“2025 was a challenging year for the sector, something that was somewhat expected given that it was the first year of regulation,” Fellipe Fraga, Chief Business Officer of EstrelaBet, told iGamingFuture.

“Moreover, the pressure from the Executive and Legislative branches to increase the tax burden so soon made the complexity even more evident,” he continued.

The situation is further complicated by President Lula’s administration seeking additional fiscal resources to address budget deficits. Earlier this month, the Senate approved a measure to gradually increase the tax on Gross Gaming Revenue (GGR) from 15% to 28% by 2028.

Tax Concerns Mount

The tax situation could have been even more severe. Congress nearly considered legislation that would have doubled the GGR tax, while another proposal—scheduled for debate when Congress reconvenes next year—would create a new tax to fund anti-organized crime efforts, known as the CIDE-BETS tax.

“At least we were able to postpone this tax, the most threatening one, until next year,” said Bruno Geraldini, CEO of Brazino777, with relief.

Magnho José, President of the Brazilian Institute of Legal Gambling (IJL), expressed concern about changing tax structures: “When companies acquired their licenses, the taxation rule was clear: 12 percent of the GGR. Any change to this percentage creates legal uncertainty, as business owners will feel they were ‘sold a pig in a poke’ or literally deceived. The gambling sector in Brazil will face this issue repeatedly before the National Congress.”

Government Oversight Needs Improvement

Despite these challenges, José views the first year of regulation positively after six years without proper oversight. However, he emphasized the need for better government management.

“For the market to function fully and in an organized manner, the Secretariat of Prizes and Betting (SPA) of the Ministry of Finance needs to be more effective in its day-to-day operations,” affirmed José.

“The regulatory framework was very well implemented and is considered one of the best in the world. Now it is necessary to focus on daily operations, and it seems that the Secretariat is moving in that direction in its recent regulations, meetings, and by increasing its staff and personnel,” he told me.

Looking Ahead to 2026

José anticipates significant positive developments in 2026 with the potential approval of bill PL 2234/22, which would legalize casinos in resorts and tourist destinations, as well as bingo halls and jogo do bicho, a traditional underground lottery popular in Brazil.

“The project is expected to be voted on by the Senate in the first half of next year, since the second half will see presidential and legislative elections, which will make its processing more difficult,” he said.

Fellipe Fraga expects 2026 to begin with challenges similar to 2025, complicated by national elections. However, he sees opportunity ahead: “But 2026 also represents an opportunity to continue the work of dialogue and conversation capable of showing the potential that the sector has to bring benefits to Brazil, as an entertainment tool that, in a regulated and sustainable way, contributes to a better scenario for all, with job creation, technological development and protection of the integrity of sports and people.”