Amid the growth of Brazil’s regulated online gambling market, industry leaders highlight the regulatory, operational, and social challenges that must be addressed to ensure long-term success.
Brazil.- Regulated online gambling in Brazil went live in January and has exceeded expectations with monthly betting volume of R20bn (US$4bn) and over 5 billion platform visits in the first quarter. Driven by a mobile-first player base, Pix payments and the regulatory framework under Law No. 14,790/2023, it’s been a strong start, but significant challenges loom in terms of regulation, compliance, responsible gaming and market access. Focus Gaming News spoke with industry leaders to explore the hurdles ahead and the measures needed to sustain the boom.
Regulatory framework: a strong start, but not future-proof
Brazil’s regulatory framework has been praised for providing structure and legitimacy, yet many experts argue that it requires refinement to support long-term growth. Kateryna Manetska, Legal Counsel at DATA.BET, acknowledges the framework’s strengths, noting “well-defined procedures and criteria, such as the need to establish a company in Brazil and compliance with AML and KYC rules.” However, she highlights barriers for smaller operators: “Major operators with significant resources can establish local entities quickly, but smaller operators may struggle, which could limit their ability to enter the market.”
Olga Levshina, CCO of BGaming emphasises that the framework is still in its early stages and undergoing transformation. She stresses the need for “more time and additional measures” to ensure stability, particularly in raising awareness around responsible gambling and implementing robust player protection mechanisms.
A source at TaDa Gaming echoes this sentiment, suggesting that Brazil may still adopt “European-style regulation” with stricter auditing, advertising restrictions and player safeguards like self-exclusion and affordability checks.
Regis Dudena, secretary of prizes and betting at the Ministry of Finance, has underscored the challenge of combating illegal operations. “Closing illegal domains is a hard task, but we’ve already shut down more than 11,000 sites,” he told Exame. Dudena has stressed continued collaboration with financial institutions and social media platforms to “suffocate” unlicensed operators, but Manetska warns that still stronger enforcement is needed.
Responsible gaming: a growing imperative
As Brazil’s market grows, so does the urgency to prioritise responsible gaming. The rapid normalisation of betting, particularly among younger demographics (18-35), has raised concerns. TaDa Gaming notes: “The speed with which players in Brazil have taken to and normalised gaming, especially younger demographics, is unprecedented.”
Levshina says: “It’s crucial to implement strong player protection mechanisms and ensure transparency in the regulations.” Manetska adds that developing a centralised database for self-excluded individuals or banned players will be one essential step for market integrity. It’s possible that the government may also look at tools like as daily betting limits and mandatory affordability checks.
Advertising: Balancing visibility and responsibility
The 47 per cent rise in advertising investment in 2024 (according to Kantar IBOPE Media) has also led to concerns, and proposed congressional bills to ban gambling ads threaten to disrupt the market. Dudena has recognised that banning advertising could make it difficult for consumers to identify authorised operators, while industry leaders have noted legislators’ concerns, with a source at Lynon’s suggesting that “clearer guidelines are needed” on ad limits to curb excessive promotion.
As for what ads work, Muriel Le Senechal of Fast Track has suggested a need for innovative engagement strategies beyond traditional ads. “In the absence of bonuses and free bets, operators need to try new stuff,” she said. “Our Rewards system helps retain fans through a fun, relevant, and modern approach.” This shift toward gamification and personalised engagement could potentially mitigate the impact of advertising restrictions while fostering player loyalty.
Lusia Barseghyan, COO of Oddsgate, emphasises the need for cultural localisation: “It’s not only about website translations; it’s about creating a truly local experience that encompasses everything from payment methods to customer service interactions.”
Operational challenges: KYC, compliance and market access
Operational hurdles, particularly around KYC processes, have tested operators. Steven Valentine of Comtrade Gaming observes: “The new regulation introduced operational difficulties around KYC, leading to a serious drop in deposits for most operators.” While some have streamlined processes, others have made rapid vendor switches to leverage the flexibility of operating multiple brands under one licence.
Lynon’s notes that high licensing costs (R30m/USD$5.2m) and substantial compliance demands could “push smaller players toward mergers or exits.” Manetska suggests “tax incentives or adjusted conditions for smaller operators” to diversify the market and reduce the dominance of global giants like Flutter Entertainment.
And casino gaming?
Sports betting is driving Brazil’s online gambling market for now, but some operators have their eyes on the launch of igaming. Zak Gusarov of Uplatform says: “The real jackpot is coming when online casinos get the green light, probably in the next year or two.” TaDa Gaming agrees, saying that “broader regulations covering casinos, poker, and bingo halls could supercharge the industry.”
There’s also the prospect of land-based casinos in Brazil. A bill to legalise them has been held up for years, but it’s still on the table and could have some impact on the nascent online sector.
A collaborative path forward
Overall, optimism prevails. Aaron Axisa of Booming Games notes: “The openness and collaboration between regulators and suppliers has been refreshing.” Marco Pequeno of Amusnet adds, “With sustained collaboration between operators and providers, the Brazilian market has the potential to grow beyond initial projections.”
Brazil’s market dynamics position it to become a major online gambling market. The path to sustainable growth now requires attention to regulatory gaps, responsible gaming measures and market access for diverse operators. Navigating these challenges well will lead to a thriving market.
