Brazil’s online betting ban could push R$ 25 billion to unlicensed operators, H2 Gambling Capital says

H2 Gambling Capital has revised its Brazil forecasts after the online betting ban signed on 25 September 2026. Its central case now assumes the regulated market shuts completely and does not reopen, which would move a large chunk of activity offshore — the bit payments people should care about, because that is where payment blocking, fraud exposure, and zero consumer protection all start to matter.

1. H2 says about 60% of spending in the regulated market, or roughly R$ 25 billion, could continue to be wagered — but with unlicensed operators. In its model, around R$ 15 billion leaves the market in the short term.
2. The firm’s range is R$ 20 to 30 billion migrating offshore, or from half to three quarters of the legal market. The key variable is not demand in abstract terms; it is how effective payment-channel blocking becomes for offshore sites, and how long the ban survives legal and political challenges.
3. Based on H2’s estimate that around 30% of the market was already offshore, the illegal market would rise from about R$ 17 billion to about R$ 42 billion. H2 notes that a more commonly cited 41% offshore share would push the illegal market from R$ 28 billion to R$ 53 billion, but says the exact starting point matters less than the R$ 25 billion increase.
4. H2 says the regulated market was worth about R$ 40 billion on an annualized basis immediately before the ban. The official 2026 number will be lower because it reflects only nine months of licensed operation, and the revised annual projections take that into account.
5. The model is based on two inputs. One is H2’s survey of 2,451 online bettors in Brazil, conducted in November 2025, which found that 39% of respondents were still using unlicensed sites after regulation and that those players accounted for about 60% of declared spend. H2 also says roughly a quarter of all declared spend was already going to unlicensed operators.

H2’s current working view is that Brazil could reopen in 2027, possibly for both sports betting and iCasino, though a sports-only reopening is also possible. For PSPs, acquirers, and banks, that means the real issue is not just whether demand disappears, but whether it gets routed into channels that are harder to monitor, harder to block, and outside the licensed perimeter.