Brazil's online betting market faces government and industry data discrepancies, raising regulatory concerns

A sharp divergence in estimates on Brazil’s online betting market has raised concerns among lawmakers and regulators, with officials acknowledging that reliable data on the scale of illegal activity is still lacking.

Deputy Julio Lopes, who coordinates the External Commission on Acts of Piracy and the “Legal Brazil” Agenda, drew attention to the issue during discussions on Tuesday, pointing to a large mismatch between government-linked estimates and figures presented by industry bodies, reports BLNData.

While the Secretariat of Prizes and Bets (SPA) has cited projections indicating that up to 70% of bets are now placed within the legal market, sector representatives argue that illegal operators continue to account for roughly half of all activity. Lopes said the gap between these estimates represents billions of reais and questioned how such uncertainty persists in a structured market.

He described the situation as "absurd" and called for closer alignment between stakeholders. "I honestly think it's absurd that there's such a large discrepancy between the government's view and your views regarding illegality. It would be important for you to come together so that we have data that more closely reflects reality," the congressman stated.

Data presented at the discussion also pointed to the financial implications of the illegal segment. Letícia Ferraz, executive director of the Laboratory for Human Rights and New Technologies (LabSul), said the regulated market generated R$ 37 billion ($7 billion) in revenue and R$ 9.9 billion ($1.9 billion) in tax contributions linked to public policies in 2025.

She estimated that illegal operations handle between R$ 26 billion ($5 billion) and R$ 40 billion ($7.6 billion) annually, resulting in foregone public revenue. "We are losing between R$7 billion ($1.33 billion) and R$10 billion ($1.9 billion) annually that could be transformed into public policies," Ferraz pointed out.

Ferraz suggested a combination of measures to address the issue, including fair taxation to maintain competitiveness, approval of a legal framework targeting illegal operators, and stronger monitoring of financial flows by authorities such as the Central Bank and the Council for the Control of Financial Activities. She also proposed introducing a seal to distinguish licensed operators.

Concerns over enforcement were also linked to payment systems. Ana Bárbara Teixeira, a member of the Advisory Board of the International Gaming Association, said illegal betting platforms continue to access the instant payment system Pix.  

She added that licensed operators should have access to the Central Bank’s fraud registry to strengthen controls against money laundering.

Regulators acknowledged that current estimates are not officially validated. Leandro Lucchesi, general coordinator of Regulation at the SPA, said the figures in circulation are based on private studies. “The SPA, in fact, does not endorse any of these indicators,” he stated.

“The SPA is making a technical cooperation agreement with Ipea [Institute for Applied Economic Research] to have this indicator, among others,” Lucchesi explained. He said the work plan to develop official indicators is expected to be finalized in 2026.

Technical limitations also affect enforcement efforts. Gianluca Fiorentini, inspection manager at the National Telecommunications Agency (Anatel), said the agency acts only on instructions from the SPA and does not have independent authority to remove content.

Witoldo Hendrich Júnior, president of the Brazilian Association of Games and Lotteries, warned that increasing taxes or tightening advertising rules could push users toward unregulated platforms and deter investment. "The exaggeration is pushing the player, and ultimately society, towards piracy," he warned.