H2 estimates up to USD5.8bn will migrate to the illegal market
Money doesn't disappear, it just changes hands. H2 Gambling Capital estimates that between BRL20 billion (USD3.9 billion) and BRL30 billion (USD5.8 billion) will shift from the regulated Brazilian market to unlicensed operators following the provisional measure signed by the Government on September 25.
This calculation starts from a known pace. Just before the prohibition, the regulated market was moving at an annualized rate of about BRL40 billion (USD7.72 billion). Of that volume, the consultancy estimates that around BRL25 billion (USD4.826 billion) will continue to be spent on betting, just outside the system. The other BRL15 billion (USD2.895 billion) will evaporate in the short term: some people will simply stop playing, and others will reduce their activity.
There's a technical assumption behind this that needs to be made explicit. H2's central scenario assumes that the regulated market remains closed and does not reopen, because it is the only outcome that currently offers legal certainty for modeling. However, the consultancy itself clarifies that its own assessment is different: it considers it more likely that the market will reopen at some point in 2027, perhaps including sports betting and iGaming, and does not rule out a limited reopening only for sports.
The final size of the illegal circuit depends on which baseline is used, and here the numbers diverge. If the offshore market represented about 30 percent before the prohibition, it would increase from about BRL17 billion (USD3.3 billion) to BRL42 billion (USD8.1 billion). If, on the other hand, 41 percent is taken, a figure widely cited in Brazil, the jump would be from about BRL28 billion (USD5.404 billion) to BRL53 billion (USD10.23 billion). The National Association of Games and Lotteries (ANJL) has been using this same 41 percent as a starting point and projected that illegal participation could climb to 82 percent of the sector.
For H2, the discussion about absolute size is secondary. What matters is the movement: those BRL25 billion that are transferred from the regulated environment to unlicensed platforms.
The projection is based on its own survey of 2,451 Brazilian online bettors, conducted in November 2025. The results explain why moving would be easy. 39 percent of respondents were still accessing unlicensed sites, and this group accounted for about 60 percent of declared spending. One out of every four declared reais was already ending up with unlicensed operators. Even more revealing: half of the declared spending came from players who, in the previous six months, had used a platform without identity verification. For these people, the prohibition is not an obstacle, because accounts and payment methods on offshore sites are already set up.
The international precedent the consultancy uses as a baseline is Dutch. When the Netherlands raised betting taxes and imposed mandatory deposit limits at the end of 2024, about half of what the regulated market stopped receiving reappeared on the offshore side. H2 takes this as a lower limit because Brazil applied a complete prohibition, without the intermediate option for the bettor to simply spend less within the legal system.
With these assumptions, the consultancy projects a Brazilian offshore market of about BRL42 billion (USD8.107 billion), considering the 2026 pace plus additional growth in 2027. This figure is almost identical to the BRL41 billion (USD7.914 billion) that circulated through unlicensed operators in 2024, before regulation existed.
But the return to the starting point is only apparent, and therein lies the report's most uncomfortable observation. Before 2025, a good part of that offshore money went to international operators who, while not licensed in Brazil, did have compliance and consumer protection structures in other markets. Now, with licensed companies out of the game, H2 anticipates that this volume will end up in the hands of companies that, at the time, failed to meet the requirements to obtain a Brazilian license. The market returns to the same size, but with worse players involved.
Tags: H2 Gambling Capital, Brazilian offshore market, player migration, gambling ban in Brazil, Business, Strategic & Operational Consulting