Brazil's illegal betting matches regulated sector's volume
A recent legal and economic report led by University of São Paulo professor, Luís Fernando Massonetto, has raised alarms about the effectiveness of current Brazilian regulation. The study estimates that the irregular online gambling market in Brazil moves between USD 5.2 billion and USD 8 billion annually, a figure that practically matches the total volume of the legal market (estimated at USD 7.6 billion). According to the authors, Law 14.790 has failed to achieve its primary objective of channeling demand towards authorized platforms, leaving a massive space for operators functioning outside the Ministry of Finance's radar.
The research identifies a "vicious cycle" caused by the imbalance between compliance costs and the competitiveness of offerings. While licensed operators must absorb license fees, 12% GGR taxes with projected increases, biometric systems, and strict anti-money laundering controls, clandestine platforms operate with zero costs. This difference allows the illegal market to offer more attractive odds, aggressive promotions, and simplified registrations, capturing the attention of a bettor who, in many cases, is unable to distinguish between a legal and a simulated site.
The report concludes that if the regulatory structure raises operational costs above the actual risk of being sanctioned, it creates an institutional incentive for illegality. This situation not only reduces the state's tax base but also generates increasing pressure on formal operators, who must face greater demands while losing market share to competitors who offer no security or player protection guarantees.
For experts, the sustainability of the Brazilian model depends on adjusting these asymmetries before the irregular market definitively suffocates the transparent sector.
Tags: Brazil, illegal online gambling Brazil, illegal online gaming Brazil, Luís Fernando Massonetto