Brazil’s Sports Betting Industry Braces for Potentially Strict New Legislation

Brazil’s regulated sports betting market went live in January 2025, but barely a year into the launch, lawmakers are already discussing making significant changes. This launch was a long time in the making, as the official ruling to legalize sports betting in Brazil came back in 2018. Yet even with years of preplanning and structuring, Brazil’s sports market faces many concerns. Calls to raise the minimum gambling age, introduce monthly caps, and tighten ads are now filling the government offices.

The concerns come amidst contrasting figures about how big Brazil’s illegal gambling scene really is. And the bill, which could potentially gain approval this year, may just endanger the rising sports betting landscape.

Brazil’s Legal Sports Betting Industry

The anticipation surrounding Brazil’s legal sports betting landscape has been building since the first approved legislation in 2018. Former Brazilian President Temer (who has since been impeached), signed the Provisional Measure 864/18 into law, effectively passing the notion of legal sports betting to Congress. But it took the Brazilian Chamber of Deputies another 5 years, until December 2023 to finally approve a regulated online gambling model for launch.

Brazil’s SPA, Secretaria de Prêmios e Apostas, is responsible for organizing the sector, and after the sports betting launch, it issued iGaming licences to 14 operators. A further 52 companies got provisional licences. By March, Brazil had over 80 licensed operators. And by the end of the first 6 months of the license market, the SPA reported a GGR of BRL 17.4 billion, or $3.2 billion. The brands operating in the country including both local brands, and the likes of bet365, BetMGM, Betsson, and Caesars.

You can check the full list of SPA approved operators in Brazil, and their brands on their site.

Yet the Unregulated Market Persists

Since the market launch, the government has blocked over 15,000 unlicensed sites. It also blocked illegal gambling payments through Pix, an instant payment service controlled by the Bank of Brazil. However, this was not enough to stop the defiant, unregulated market in Brazil. In August, Genius Sports’ head of integrity for LATAM claimed as much as 80% of bets placed in Brazil were done so illegally.

However, H2 Gambling Capital Managing Director Ed Birkin believes the figures on Brazil’s illegal gambling market are grossly exaggerated. H2 estimates the unregulated market to only take up around 30% of the total Brazilian sports betting industry.

This great contrast, and where the true figures really fall, is indicative of a market still in its infancy. Considering Brazil has one of the biggest sports betting market potentials. But controlling this market is anything but simple. Even gambling products like the lottery have underground providers. Just think about local gambling games like Jogo do Bicho – which have massive underground roots.

Strict Legislation for Brazilian Sports Bettors

The legally licensed Brazilian sports betting sites must adhere to strict gambling laws, and pay taxes on their revenue. Brazil is one of the most stringent gambling authorities in the world. While that does mean a higher level of security, gaming integrity and legitimacy, it also means fewer freedoms and more restrictive gaming products.

KYC Protocol

Licensed Brazilian sports betting sites have to comply with SPA KYC protocol. But it does not stop at ID verification. Biometric facial recognition technology is mandatory. Players must also submit their CPF (taxpayer registry) number. In some cases, income validation is also required. This is all to help ensure no underage players join online betting sites.

Dual Gambling Tax

Players must pay tax on their betting winnings, Winnings above BRL 2,824. Operators also have to pay, with the GGR tax rate set at 12%. And the operator’s tax is set to rise to 50% up to 18%, which could severely limit their resources.

New Laws That May Come Into Effect

In August 2025, Senator Humberto Costa filed PL 3,745/2025, to change certain articles in the 2023 Brazilian sports betting legislation. And not in a way that is favorable to operators.

His bill aims to;

• Raise the legal gambling age from 18 to 21: Lawmakers argue that younger adults are more vulnerable to financial harm and gambling addiction, and raising the age limit would align Brazil with stricter international standards.
• Fix monthly spending caps: The proposal is to limit monthly spending at sportsbooks to the minimum wage (about BRL 1,518 / USD $270). The Ministry of Finance and SPA would also have the authority to enforce additional daily or weekly caps if needed.
• Restrict advertising on TV, radio, and video-sharing platforms: To ban ads during overnight hours and limit operators’ sponsorship of cultural and sporting events.

It doesn’t end there either. From October 1, the online betting operator’s flat tax rate will grow from 12% up to 18%. The tax hike will have an impact on all operators, limiting their resources and potentially impacting the quality of their betting products. Whether it is through setting stricter bonus conditions, diminishing bonus offers, or even increasing the juice, Brazilian players may feel the hit of the tax hike.

What to Expect from Brazil’s Sports Betting Sector

What comes next is really a balancing act of safeguarding consumers, but while keeping the betting products competitive against offshore sites. The impending tax hike will definitely come into effect. Though there will be a Congress vote on the 9th of October to decide whether the tax increase should be permanent or not.

Costa’s bill is awaiting approval. If it is passed into law, then the new legislation would come into force around 90 days after publication. While the revenue figures and tax handles all point to Brazil’s new sports betting market thriving, these proceedings could potentially slow down that process.

Process, which should raise alarm bells for operators, as there is a FIFA World Cup coming up next year. The love for soccer in Brazil is second to none, and if the lawmakers and operators do not find a way to continue the momentum, they could miss out on a pivotal revenue maker next year.