Brazil's Betting Ban Risks Illegal Market Growth, Experts Warn
Written with artificial intelligence.
The recent prohibition of betting in Brazil, announced by President Luiz Inácio Lula da Silva, may lead to a rise in illegal platforms and legal uncertainties, according to experts. While the ban aims to address issues of debt associated with gambling, concerns about increased clandestine activity persist.
Overview of the Betting Ban
On September 25, 2026, the Brazilian government announced a ban on betting, which experts believe could result in a surge of illegal betting platforms and create legal uncertainties in the sector. Although the ban addresses the problem of gambling-related debt, it may unintentionally push bettors towards unregulated options.
Shift to Illegal Platforms
Economist Fernando de Holanda Barbosa Filho from FGV-Ibre predicts that many bettors will seek ways to bypass the ban, such as using Virtual Private Networks (VPNs) to access foreign betting sites. He states, "I bet money that the day after the ban, there will be platforms for people to gamble via VPN, using credit cards, because they enjoy the games." However, he also notes that the barriers to accessing games could decrease overall betting volume.
Market Insights
According to research from LCA Consultores, the legal betting market in Brazil is estimated to generate R$ 54 billion annually, while the illegal market could yield between R$ 33 billion and R$ 43 billion. From January to July of this year, the federal government collected R$ 8.7 billion in taxes from legal gambling activities. In contrast, the illegal sector has the potential to contribute an additional R$ 9.1 billion to R$ 12 billion in tax revenue.
Economic Implications
The annual loss in tax revenue from illegal betting could be sufficient to fund the construction of 33,000 to 43,000 homes under Brazil's Minha Casa, Minha Vida program. The LCA estimates that illegal betting now represents 38% to 44% of the total market, a slight decrease from previous estimates of 41% to 51%. Furthermore, a July survey indicated that 77% of bettors engaged with platforms that utilize illegal practices such as not requiring facial recognition.
Legal and Social Concerns
While Barbosa Filho acknowledges the potential positive impact of the ban on household finances, he criticizes the abrupt nature of the prohibition, enacted via provisional measures just nine days before elections. He emphasizes the need for broader discussions and anticipates legal challenges from companies invested in the sector, highlighting the significant legal uncertainty this situation has created.