In Brazil, the main shop window for the underground market is digital platforms and influencers
Summary
Andre Gelfi, board member and co‑founder of the Brazilian Institute for Responsible Gaming (IBJR), assesses Brazil’s first year of online betting regulation. He says the new rules have improved consumer protection, traceability and professionalisation of licenced operators, and generated substantial fiscal revenue — but the sector still falls short of its potential because of a large underground market and regulatory instability, especially over taxation.
Key statistics cited: BRL 2.3 billion collected in licensing fees (Jan–May 2025); BRL 7.9 billion in taxes and social contributions by October 2025; between 41% and 51% of betting volume remains informal; up to BRL 10.8 billion potentially lost annually to the underground market.
Key Points
- Regulation (Law 14,790/23) has introduced identity checks, payment traceability, self‑exclusion and sports integrity safeguards, raising professional standards for licenced operators.
- Despite progress, 41–51% of betting volume remains informal — the underground market still operates at scale and avoids controls.
- The informal market costs Brazil an estimated BRL 10.8 billion annually in lost tax revenue and distorts competition by operating tax‑free and changing brands/URLs to evade enforcement.
- IBJR identifies three priority levers for 2026: financially strangle illegal ops (target Pix flows), hold digital platforms and influencers accountable for promotions, and require suppliers to work only with licenced operators.
- Regulatory instability — notably proposals for sudden tax hikes such as CIDE‑Bets — risks pushing players back to informality by undermining predictability needed for long‑term investment.
Context and relevance
This interview lands at a critical moment: Brazil’s licenced market is proving it can generate significant revenue and jobs, yet structural weaknesses — payment rails, social media promotion and supplier behaviour — keep informal operators competitive. The piece links to wider debates on taxation, enforcement capacity (Ministry of Finance constraints), and the role of technology platforms in policing content.
For regulators, operators and payments firms, the article highlights where enforcement and policy must focus next: payment monitoring (especially Pix), platform moderation, and supply‑chain obligations for game providers. It also warns that tax measures introduced prematurely could inadvertently strengthen the underground market.
Why should I read this?
Quick and useful: if you work in payments, compliance, regulation or run a licenced operator, this is a heads‑up on exactly where the system’s weak spots are — social media promo, Pix deposits and suppliers selling to everyone. IBJR lays out practical priorities for 2026 that could change how you do business in Brazil.
Author (style)
Punchy: IBJR isn’t sugar‑coating things. The regulated market is growing fast but still getting tripped up by enforcement gaps and tax uncertainty — act now on payment tracing, platform accountability and supplier rules or risk losing ground to agile illegal operators.