Illegal Gambling Controls 60% Market — Brazil’s Regulated Market Faces Tax Crunch

July 18, 2025 2 min read

Illegal Gambling Still Dominates in Brazil Despite Regulated Launch

 

Brazil’s online betting hopes are hitting a major snag. Even after launching regulated markets, illegal operators still control roughly 60% of total betting activity—led by shadow platforms outside legal frameworks. This comes amid a heated policy battle over raising taxes from 12% to 18% of GGR, and threatens to derail both legal growth and market credibility.

 

Tax Hike Threatens Regulated Market’s Future

 

In June, the Brazilian government introduced Provisional Measure 1,303/2025, raising the GGR tax from 12% to 18%—a 50% jump effective immediately though subject to legislative approval within 120 days  . Industry leaders warn this may be unsustainable:

 

  • 289 licence applications may be shelved, potentially losing R$2.4 billion in fees  .

  • The overall tax burden (including corporate and social taxes) could soar to 50%, severely undercutting operators ().

  • The illegal market, generating R$1 billion monthly and representing 41–51% of total bet volume, may grow further—costing Brazil up to R$10.8 billion annually in lost tax revenue  .

 

 

Unlicensed Sites: Still King

 

Despite regulation, Brazil’s online gambling ecosystem remains skewed:

 

  • Illegal platforms still process ~60% of online betting volume  .

  • Monthly black-market revenue is around R$1 billion, contributing to the erosion of regulated industry potential.

  • Annual losses to the state from illegal activity are estimated at R$10.8 billion ().

 

Regulatory Uncertainty Threatens Growth

 

Under pressure from government deficit targets, regulators see the gambling industry as a revenue source—but abrupt tax spikes risk backfiring:

 

  • Operators already committed hundreds of millions (around R$30m licence fee) and may now rethink market entry  .

  • Brazil’s Vice‑President and bank leaders warn higher taxes could drive legal operators away, leaving illegal platforms to fill the void  .

  • Senate and industry bodies argue the focus should shift toward enforcement against illegal sites, not taxing regulated ones out of viability  .

 

 

Brazil’s Growth Potential: A Case for Caution

 

Brazil remains a massive opportunity:

 

  • As the world’s 3rd–4th largest online betting market, it promises to create ~60,000 jobs and generate R$20 billion annually in public revenue  .

  • But that upside requires regulatory stability, competitive taxes, and effective black-market suppression—not sudden changes that unbalance incentives.

 

What It Means for Marketing and Advertising

 

For advertisers and media buyers targeting the Brazilian market:

 

  • The legal ecosystem may shrink or stall, cutting ad volume and competition.

  • Illegal operators will fill gaps, operating without ad restrictions and siphoning ad spend.

  • Regulated brands risk lower ROI due to higher tax impact and slower expansion.

 

👉 The solution lies in adaptive ad infrastructure. Partners like Adsmaman specialize in building flexible, geo-aware campaign systems that sustain visibility—even when regulation squeezes the environment.

 

Final Thoughts

 

Brazil’s regulated betting market holds huge promise—but only if it’s well-balanced and enforced. A tax hike without crackdown on illegal operators may backfire, undermining both growth and consumer protection.

If you’re running campaigns in Brazil, now is the time to review your strategy: prepare for volatility, demand flexibility, and stay compliant—all while competition shifts fast.

Need help future-proofing your Brazilian campaigns? Adsmaman’s setup empowers brands to navigate tax fluctuations and shifting regulations with confidence.

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