While the regulated betting market in Brazil is generating real fiscal results, the illegal market continues to generate real competition
Alex W. Pariente, founder of Pariente Advisory, points out that the growth of the regulated betting market in Brazil has already translated into significant revenue, but it still faces strong competition from the illegal sector. Between January and April 2026, the Federal Revenue Service collected BRL4.586 billion ($886.2 million) in taxes on betting, almost double the amount recorded in the same period of 2025.
Pariente notes that the numbers confirm the initial strength of the regulated model, but are not enough to attest to its consolidation. Monthly revenue fluctuated throughout the four-month period and, according to estimates cited in the text, between 41% and 51% of total betting activity still occurs outside the licensed environment. This limits the so-called channelisation of the market.
The article highlights that the country has structured a relevant regulatory framework, with actions by the SPA (Secretariat of Prizes and Bets), integration into Sigap (Integrated System for the Management of Public Administration), and the creation of the Betting Database by the Federal Police. Even so, the author emphasises that institutional capacity remains insufficient to contain illegal operators. This reduces the effectiveness of oversight and keeps a significant portion of the demand beyond the reach of the State.
The 2026 World Cup appears to be the big test for the Brazilian betting market, with expectations of generating around BRL19 billion in the country. According to Pariente, the event will measure the capacity of the regulated system to legally absorb the demand, given the competition from offshore platforms that do not comply with requirements for compliance, responsible advertising and consumer protection.
According to Pariente, Brazil has already demonstrated fiscal and regulatory potential in record time. But it needs to transform this progress into lasting operational coordination. For him, the challenge in the coming months will be to expand the integration between regulation, oversight and the market to prevent the illegal sector from consolidating its position precisely when the country is entering its greatest stress test.
Regulated betting market in Brazil generating real fiscal results
The Brazilian Federal Revenue Service collected BRL4.586 billion in taxes from betting companies between January and April 2026. This amount represents almost double the BRL2.283 billion collected in the same period of 2025, and originates from 87 licensed operators. It is almost double the 49 active at the beginning of the first full year of operation of the market.
The numbers are real. The trajectory is real. And they have understandably generated a degree of institutional confidence in the path Brazil is taking.
This confidence is not misplaced. But it is incomplete.
What the tax data shows โ and what it doesn’t show
The Brazilian Federal Revenue Service projects revenue from betting between BRL11 billion and BRL13 billion for 2026, based on BRL9.95 billion collected in 2025. The tax rate on GGR will increase from 12% to 13% in 2026, according to Complementary Law 224/2025, reaching 15% in 2028. If these projections are confirmed, Brazil will have consolidated itselfโin less than two years of regulated operationโas one of the markets with the highest tax contribution in global gaming. In terms of revenue, it is already the fifth-largest betting market in the world, behind only the US, the UK, Russia and Italy.
The monthly data deserves closer attention. After peaking at BRL1.49 billion in January, February fell to BRL1.04 billion. March registered BRL859 million before April recovered to BRL1.189 billion โ a 38.4% increase over March, but still well below the opening level of January. This volatility is not alarming in a nascent market. But it is a sign that deserves monitoring. A market that generates BRL1.49 billion in one month and BRL859 million three months later is not yet operating on a stable baseline.
Activity outside of formal regulatory frameworks
The more structural issue lies behind the main figures. The Brazilian Federal Revenue Service measures what the licensed side of the market produces. There is no equivalent measurement for what the unlicensed side retains. Independent estimates indicate that the illegal market accounts for between 41% and 51% of total betting activity in Brazil. The Gaming Compliance International Global Report 2025 estimated that 78% of global online gaming activity remains outside formal regulatory frameworks. Brazil’s figures, while improving, are not an exception in this global context.
Fiscal results are a product of the piping. They are not proof that the piping is complete.
The inspection framework
Brazil has established the correct institutional architecture. The SPA issued its first enforcement actions in early 2026โtargeting fines at licensed operators with deficient KYC protocols, in accordance with SPA/MF Ordinance No. 722. The transition period tolerance has officially ended. Sigap, the real-time data reporting system, is operational and integrated with licensed operators. The SPA and the Brazilian Digital Council renewed their cooperation agreement until June 2026, coordinating the blocking of illegal websites and advertising enforcement actions.
The newly created Betting Database of the Federal Police โ specifically structured around data analysis, financial intelligence, and anti-money laundering capabilities focused on match-fixing and betting fraud โ signals a more sophisticated understanding of how illegal betting operations actually work. What the Betting Database was created to build is exactly what the regulated market needs: a shared intelligence framework between law enforcement authorities, regulators and the community of licensed operators, where enforcement data and compliance information move in the same direction.
Partial efficiency
The acknowledged constraint is institutional capacity. SPA leadership itself has identified resource limitations as a brake on enforcement reach. A senior market analyst noted earlier this year that tax revenue from the sector could double if enforcement against the illegal market were intensified. This is not a criticism of SPA. It is an accurate description of the arithmetic. A regulator capturing 12% of the GGR from 87 licensed operators operates with partial efficiency when between 41% and 51% of total market activity remains beyond its reach.
The Desenrola Brasil programme clearly illustrated the structural risk. By restricting access to licensed platforms for beneficiaries of the debt renegotiation programmeโwithout an equivalent mechanism to prevent these same consumers from accessing illegal alternativesโthe measure redirected a segment of demand to the unregulated market. The licensed operator absorbed a compliance cost. The illegal operator collected the displaced volume. This is the problem of channeling in its simplest form.
The World Cup as a test of the drainage system
The 2026 FIFA World Cup โ co-hosted by the US, Canada and Mexico โ is the first global tournament in which Brazilian consumers can legally bet through a regulated domestic market. According to Betlaw, a Brazilian company specialising in sports betting advisory services, approximately 10% of the global betting volume is expected to be concentrated in Brazil, equivalent to around BRL19 billion.
Global bets on the tournament are expected to exceed $50 billion โ compared to $35 billion recorded in Qatar in 2022, according to Macquarie analyst Chad Beynon โ driven by 40 additional matches, favourable North American time zones for international audiences, and broader access to the regulated market in various jurisdictions.
For licensed operators in Brazil, the World Cup is not simply a revenue event. It is the biggest channelisation test the regulated market will face in its first three years of operation. The question is not whether the demand will arrive. It will. The question is what proportion of that demand the licensed market captures. And what proportion flows to offshore platforms that do not carry any of the compliance obligations, responsible gaming requirements or advertising restrictions that licensed operators bear.
Suitable standards
The advertising framework for the tournament adds another dimension. Under current SPA regulations, each advertisement must contain the licensed operator’s authorisation number. Operators are jointly responsible for affiliate and influencer content. Appeals to easy financial gain, associations with personal success, and any targeting of minors are prohibited. These are appropriate standards. They also create a compliance asymmetry. Licensed operators invest in campaigns within the rules, while illegal platforms face no equivalent restrictions. And they compete for the same consumer attention on the same screens.
A match-fixing incident during the World Cup โ the precise scenario for which Base Apostas was created โ would not only be a failure of sporting integrity. In a market where between 41% and 51% of total betting activity flows through unlicensed channels, it would be a failure of market integrity. And with systemic fiscal and reputational consequences that only the licensed sector would be called upon to absorb.
The real opportunity โ and the discipline it demands.
Brazil has accomplished more in 18 months of regulated operation than most jurisdictions achieve in five years. The Federal Revenue Service’s monthly reporting requirements, the transition of the SPA from guidance to active enforcement, the requirement for integration into the SIGAP system, and the creation of the Betting Databaseโthese are concrete institutional steps.
The framework is in place. The fiscal proof of concept is confirmed. The remaining gap is not architectural. It is operational and related to coordination. Closing the channeling gap requires the same cross-sectoral alignment on the enforcement side that licensed operators are already required to maintain internally. Operators, payment providers, advertising platforms, search networks and affiliates, enforcement agencies, and institutional investors working from a common goal, not from separate compliance calendars.
The markets that have significantly moved the needle on the illegal marketโthe UK, Sweden, Denmarkโhave done so by combining competitive product regulation, systematic interruption of payments to illegal operators, consumer education, and enforcement capacity scaled to the actual size of the illegal market. None of these levers, applied in isolation, produced results. All of them, applied sequentially and with institutional coordination, did.
Brazil has the framework. It has the fiscal baseline. It has the World Cup as a real-time stress test, arriving in the second year of the market. The question that the next 12 months will answer is whether the coordination between the regulatory, enforcement, and commercial layers will become systematic. Or whether the illegal market will use the same window to consolidate its position.
This is a question worth asking now.
Alex W. Pariente
Founder and Principal of Pariente Advisory and former senior executive at Wynn Resorts, Caesars International, Hard Rock International and Seminole Gaming, with nearly three decades in regulated gaming and integrated resort development in the Americas, the Caribbean and Europe.
Pariente Advisory
Pariente Advisory is an independent strategic advisory platform serving investors, operators, and key decision-makers in hospitality, gaming, and integrated resort development worldwide. This analysis is part of Pariente Advisory’s Regulatory Intelligence Series. Each mandate is personally led by the founder, treated confidentially, and structured according to the specific situation. Pariente Advisory does not provide legal, tax, brokerage, placement, or regulated investment advisory services.