Brazil’s illegal betting market fell to 38%–44%, but advertising still complicates regulation

Brazil’s regulated sports betting market has pushed illegal operators back over the last 18 months, but the illicit share is still large enough to matter for PSPs, acquirers, and banks: 38% to 44% of total bets, according to a study presented in Brasília on 31/8. The obvious takeaway is that licensing is working in part; the less comfortable one is that a huge chunk of volume is still flowing outside the regulated perimeter.

1. The data came from a study by LCA Consultoria Econômica, based on Instituto Locomotiva data and commissioned by the Instituto Brasileiro de Jogo Responsável (IBJR). The research used a panel of about 2,300 respondents conducted in May this year and found that the illegal market had shrunk from the first round of the survey, when the estimate ranged from 41% to 51%, with a base scenario of 46%.
2. In the latest estimate, illegal operators accounted for 38% to 44% of all betting in Brazil, with a base scenario of 41%. Leonardo Lima, head of Competition and Public Policy at LCA Consultoria Econômica, said the methodology treats as illegal any operator that does not have authorization in Brazil, including firms regulated elsewhere, firms with no regulation anywhere, and operators licensed in one state but acting outside it.
3. Lima said the decline reflects three things moving at once: consumers have spent more than 18 months living with the regulated market; companies have adjusted to the rules; and enforcement has become stronger over the period. Even so, he said Brazil remains far from more mature markets, where the illegal share usually sits between 3% and 10%.
4. One detail that matters for payment providers: more than 70% of surveyed bettors said they would stop using a bookmaker if they knew it was illegal. That points to a sizable information gap, not just a compliance gap. Lima also said illegal operators avoid authorization costs, LGPD (Lei Geral de Proteção de Dados) requirements under Law 13,709/2018, and enforcement mechanisms in order to offer more attractive bonuses, payment methods, and odds.
5. Carlos Lima, president of IBJR, called the decline proof that regulation in Brazil has had the intended effect. He said the next step is to move beyond blocking websites and focus directly on those financing the illegal market. For PSPs and acquirers, that is the part of the story worth watching: once regulators shift from access-blocking to payment-side pressure, the operational risk changes shape fast.

The event, “Combate ao Mercado Ilegal de Apostas,” was promoted by Estúdio JOTA in Brasília on Monday (31/8), with sponsorship from IBJR. The comparison to Europe is hard to miss: where more mature regimes have kept the clandestine share below 10%, Brazil is still dealing with a market where illegal volume is close to half of turnover.