Brazil’s first full year as a regulated online betting market has been marked by explosive growth that exceeded initial projections, alongside significant operational challenges and regulatory flux.

Gross gaming revenue (GGR) in the licensed market surged to an estimated BRL 22–31 billion for 2025, far outpacing early forecasts of just ~BRL 3–5 billion. This places Brazil firmly among the top three online gambling markets globally (behind only the US and UK) after just one year of regulation. Tax receipts have similarly swelled: the federal government collected roughly BRL 8.8–10 billion in betting-related taxes in 2025, well above pre-launch expectations of ~BRL 3 billion. Licensed operators also paid substantial one-time fees (≈BRL 2.2 billion in H1 alone) to acquire their permits. In short, market performance in Year One eclipsed the cautious estimates, confirming both the enormous demand and the efficacy of Brazil’s belated regulatory rollout.

Several clear market leaders have emerged. International brands like Betano, Bet365, and Superbet quickly captured dominant shares, leveraging superior resources and experience. Together with a legacy local brand (Sportingbet), these top operators account for over 50% of total market share. Betano in particular stands out as the “clear market leader,” generating approximately BRL 3.5 billion in net gaming revenue (NGR) in H1 2025. Local upstarts such as Esportes da Sorte and EstrelaBet also secured top-five positions, aided by aggressive marketing and deep localisation. By contrast, dozens of smaller entrants have struggled to gain traction – the bottom 150+ licensed brands each hold on average just ~0.1% market share, an almost negligible presence. One high-profile underperformer was Pixbet, a local operator that ambitiously sponsored Brazil’s biggest football club, Flamengo, only to see the deal collapse due to overextension and financial strain. Pixbet’s estimated 2% market share underscored the extreme market fragmentation – it was still the 11th-largest operator, reflecting a long tail of small brands with unsustainable economics.

Brazil’s first year under regulation was not without pain points. Operators initially faced operational frictions, notably the mandatory KYC and account verification procedures, which caused onboarding hurdles in early months. While players gradually adapted, these compliance steps tested user patience and highlighted the learning curve for a newly regulated audience. Taxation pressure quickly emerged as the foremost strategic challenge. The industry entered 2025 with a relatively moderate 12% GGR tax, but by year-end authorities approved raising this to 13% in 2026, 14% in 2027, and 15% by 2028. Even more worrying for licensed operators is a proposed 15% tax on player deposits (the CIDE-Bets bill), which passed the Senate late in 2025. If enacted, this deposit levy, expected by lawmakers to raise an astonishing BRL 30 billion annually for public security funds, could deal a heavy blow to the regulated channel. Industry experts warn such a tax would drive bettors back to offshore sites en masse, with legal market “channelisation” potentially dropping below 20% as players flee a 15% haircut on deposits. In effect, early signs of regulatory overreach (via excessive taxation and advertising curbs) have tempered the market’s initial euphoria.

Despite these headwinds, the licensed sector’s fundamentals show promise. An estimated 17–18 million Brazilians placed bets with regulated platforms in H1 2025 alone, indicating substantial migration from the formerly grey market. Average spend per active user settled around BRL 164 per month (≈$30) in that first half – a figure expected to rise modestly as player engagement deepens. Notably, mobile betting dominates usage, with almost 99% of all visits to legal betting sites coming from smartphones. Brazilian bettors have embraced in-play wagering and rapid Pix-powered deposits on mobile apps, confirming that a mobile-first strategy is essential. Sports betting drove the lion’s share of revenue, with football (soccer) by far the most popular bet type – upwards of 85% of Brazilian punters prefer betting on football matches. Other sports like basketball, volleyball, and MMA are growing niches, but no competitor approaches football’s cultural ubiquity. Traditional online casino games remain officially unregulated, meaning any casino-style GGR still largely flows to offshore or unlicensed sites. This focus on sports betting has shaped player behaviour: many Brazilian users treat betting as an extension of sports fandom and a test of skill, rather than pure gambling entertainment. As a result, retention strategies are centred.

Local sports content, live streaming, and community engagement have resonated more than generic bonuses.

Brazil’s regulatory debut also sent ripples across Latin America. The country’s sheer scale and rapid growth have made it a de facto anchor market for LatAm iGaming – now larger than all other Latin markets combined in GGR terms. Global operators are using Brazil as a springboard for regional expansion, investing in local offices and partnerships that can later support moves into emerging markets like Peru and Chile. Regionally, Brazil’s legalisation has catalysed new investment in LatAm-focused betting technology, affiliate networks, and multilingual talent, reaffirming that Brazil is the strategic linchpin for anyone with aspirations in Latin American iGaming.

Looking ahead to Year Two, our outlook is cautiously optimistic but contingent on policy developments. In a base-case scenario with no drastic new taxes (and the deposit tax shelved), Brazil’s regulated GGR could increase by another ~20–30% in 2026, approaching BRL 40 billion. Under a bullish scenario – if economic tailwinds strengthen and regulators maintain a light touch – growth might accelerate further, with double-digit increases in active bettors and higher average spend driving upside beyond official forecasts (potentially >BRL 45 billion GGR). However, a bear case looms: if the 15% deposit tax is imposed and advertising restrictions tighten sharply, the legal market’s growth could stagnate or even reverse in 2026. In that worst case, major operators would trim acquisition spending or exit, smaller firms would fold, and a resurgent offshore sector would reclaim much of the handle. Our core prediction is that Year Two will bring consolidation and maturation. The frantic land-grab of 2025 will likely cool as weaker operators merge or leave (up to half of the current ~80 licensees could exit or consolidate), and survivors focus on optimising operations over raw market share. Key metrics to watch will include the regulated channel’s share of total betting (channelisation) – currently estimated around 70%, but under threat – as well as average revenue per user (ARPU) trends, tax revenue trajectory versus government targets, and any early signs of profitability among top players after year-one investment blitzes. We also expect regulatory refinement: clearer guidelines on contentious points (KYC standards, advertising boundaries) and possibly the introduction of B2B supplier licensing to tighten oversight of the wider ecosystem.

Strategic implications from Brazil’s first-year experience are plentiful. Operators targeting Brazil must adopt a long-term, localisation-centric strategy: pure bonus-led customer acquisition is proving unsustainable, as evidenced by Pixbet’s fate. Successful brands in Year Two will be those who differentiate via superior product, local content (especially football-related), and customer trust – all while keeping a tight lid on costs amid rising taxes. With marketing ROI under pressure, retention will be king: operators should invest in VIP programs, predictive analytics to prevent churn, and cross-selling innovations (perhaps fantasy sports or free-to-play games) to extend customer lifecycles. Suppliers and affiliates likewise must align with Brazil’s new realities. Game and platform providers would do well to tailor offerings to Brazilian tastes (e.g. mobile-first interfaces, local football-themed games, Pix payment integrations) and be prepared for possible certification or licensing requirements as the regulator’s scope expands. Affiliates and marketing partners should emphasise compliance and quality – the days of easy traffic via flashy influencer campaigns are numbered if new ad laws ban celebrity endorsements. Those affiliates that survive will be the ones delivering genuine value (expert local insights, odds comparison, community) rather than just promo codes. For regulators and policymakers, Brazil’s inaugural year underscores the importance of balancing revenue objectives with the need to keep legal betting attractive. Enforcement against the black market has been vigorous – over 15,000 illegal betting sites have been blocked by the telecoms agency – but that progress could be undone if legal operators are overburdened. Regulators should continue bolstering player protection and transparency (the SPA’s regular public reports are a good precedent) while resisting short-term temptations like onerous taxes that jeopardise the long-term health of the market.

Final assessment: Brazil’s first year of regulated iGaming can be deemed a qualified success. In raw monetary and participation terms, it surpassed expectations, quickly becoming one of the world’s largest regulated betting markets and injecting billions into public coffers and sports sponsorships. The rollout proved that Brazilian punters would migrate enthusiastically to licensed platforms when given a viable option – a positive signal for the sustainability of regulation. The market’s structure, however, is still finding equilibrium. The foundation has been laid with strong player verification, transaction monitoring, and a visible commitment to responsible play, but stability is not yet assured. The latter half of Year One exposed fault lines in the form of policy uncertainty (tax hikes, advertising bills) and fierce competitive burn-rate tactics. Whether Brazil’s regulated regime ultimately fulfils its promise of a safe, profitable, and innovative marketplace will depend largely on decisions taken in its second year. Will the government prioritise growth and channelisation or succumb to fiscal pressures that drive players underground? Will we see a healthy consolidation into a dozen or so strong operators, or a re-fragmentation as new entrants replace failed ones? Our analysis indicates that Brazil remains an indispensable strategic market for global iGaming – its population size, sports culture, and now-established regulatory framework make it the key battleground for LatAm supremacy. The lessons learned one year on should guide all stakeholders – operators recalibrating their strategies, investors weighing long-term opportunities, and regulators fine-tuning the rules – toward ensuring that Brazil’s second year of regulation builds on the successes, mitigates the pain points, and stays on course toward its vast potential.