Industry leaders raise concerns over Brazil’s betting market instability

Industry leaders are sounding the alarm over shifting regulations, rising taxes, and mounting political opposition six months after Brazil officially opened its regulated sports betting market.

Speaking at iGB L!VE, panelists from BetMGM Brazil, H2 Gambling Capital, and Super Afiliados outlined serious concerns based on developments since January, Gaming Magazine Brasil reported.

The Brazilian market officially launched in January 2025, ending years of grey market dominance by offshore operators and unregulated local entities. With over 293 license applications already submitted, the country quickly became a focal point for global operators eager to tap into Latin America’s largest economy.

BetMGM Brazil’s Head of Legal, Eduardo Ludmer; H2 Gambling Capital Managing Director Ed Birkin; and Super Afiliados Head of Affiliates Pedro Lucas shared firsthand insights from Brazil’s rocky regulatory rollout.

Birkin noted that Brazil had the scale, cultural passion, and digital potential to succeed, but warned of growing uncertainty six months in.

Meanwhile, Lucas issued a stark warning about proposed legislation that could ban affiliate marketing. “Some politicians are actively trying to stop affiliates from operating,” he said. “Unite or die."

Ludmer echoed that sentiment, pointing to a raft of unexpected changes that have blindsided operators. A main concern is a proposed tax hike from 12% to 18%, announced just months after operators paid BRL30 million (USD 5.4 million) each for a license. “This is not what the market wanted,” Ludmer said.

Moreover, Ludmer also highlighted inconsistencies in licensing. He pointed out that while initial guidance suggested only fully licensed operators would be allowed to operate, Brazil instead issued temporary licenses on launch day, opening the doors to many unvetted operators.

Meanwhile, President Lula’s administration, which is under mounting pressure to reduce Brazil’s fiscal deficit ahead of next year’s election, has targeted the betting industry to make up a BRL20 billion ($3.6 billion) shortfall after a failed attempt to increase the financial transactions tax (IOF).

In June, a provisional measure was introduced to raise gambling taxes, catching many operators off guard. “Everybody was very surprised by the increase,” Ludmer said. “You plan for one scenario and then have to redo your entire financial model.”

Beyond tax hikes, the sector faces additional pressures, including new advertising restrictions approved by the Senate, such as TV and radio watershed limitations. 

The Brazilian gambling market is worth over $12 billion, yet 30–50% of players still use offshore, unregulated sites. Panelists warned that without stronger regulation, better public perception, and political support, legal operators risk being pushed out.

As the session concluded, Lucas called for unity—not just among operators, but across the entire gambling ecosystem. He emphasized the need to educate consumers, politicians, and the media on the benefits of regulation and the risks of the black market.