Ban on illegal gambling generates R$ 25 billion for the illegal market in Brazil.
Just a few weeks after Provisional Measure No. 1.394, the first figures already indicate where the money from bets is going: to the illegal market.
On September 25, 2026, the federal government prohibited by decree the operation, offering, intermediation, and advertising of fixed-odds betting throughout Brazil. The promise was to protect the bettor. The practical effect, according to an article by Gustavo Delbin and Mariana Chamelete published in Poder360 , is moving in the opposite direction: the demand for betting does not disappear with the prohibition. It simply changes location.
The size of the illegal market
The report “Brazil: The Cost of Prohibition”, released in October by Ibia (International Betting Integrity Association) based on estimates from H2 Gambling Capital, estimates that approximately 60% of the volume circulating in the legal market, something close to R$ 25 billion, will continue to be wagered, but with unlicensed operators. In practice, the illegal market is expected to jump from R$ 17 billion to R$ 42 billion.
Data from the Blask platform anticipates this migration happening rapidly. The share of offshore sites in the demand for betting was 3,4% on the eve of the Provisional Measure. Four days later, it reached 9,9%, the highest rate since the beginning of the regulation, almost tripling in less than a week. And the number tends to be conservative; the indicator measures searches, while a large part of bettors migrate through mirror links and messaging groups, outside of any radar.
Of the more than 25 million Brazilians who were betting on regulated platforms as of September, projections indicate that around 21,6 million will continue betting, almost all of them outside the reach of the State.
What is lost through regulation?
In the regulated market, there were concrete protection mechanisms: identity verification via CPF (Brazilian taxpayer ID) and biometrics, prohibition of the use of credit cards, cryptocurrencies, and third-party payments, a national self-exclusion system, blocking of beneficiaries of Bolsa Família (a Brazilian social welfare program) and BPC (a Brazilian social welfare program) and people in debt renegotiation programs, in addition to customer service channels for bettors. In August 2026, more than 5 million Brazilians were prevented from betting because of these restrictions.
All these tools also generated the data that fuels the debate about problem gambling itself. Without regulation, the country loses the ability to measure the problem it claims to want to combat.
The same reasoning applies to sports integrity. The regulated market monitored suspicious bets; according to Ibia, alerts involving Brazilian sports increased from an average of 11 per year between 2021 and 2024 to 25 in 2025. The increase does not indicate that there was more manipulation, but that there is greater scrutiny. In the illegal market, there is no self-exclusion, no limits, no protection for children and adolescents, nor reporting of suspicious bets. Anyone intending to manipulate a match finds the ideal environment there, without a trace and without any warning mechanism.
The financial and legal costs
On October 25, 2026, 85 federal authorizations were revoked without reimbursement of the R$ 30 million paid for each grant. This represents R$ 2,55 billion invested by companies that followed the rules established by the State itself and lost their licenses without compensation.
Football felt the impact immediately. The Provisional Measure affected dozens of clubs and competitions with existing contracts, eliminating the sport's main source of commercial revenue, which exceeds R$ 1 billion per year. However, the legal uncertainty extends beyond the betting sector; seeing a federal license extinguished in just a few days raises the risk level for all regulated investments in Brazil, regardless of the sector.
What could still change?
The provisional measure has the force of law, but it doesn't end the debate. Congress can vote on it until the beginning of March 2027, and there are already almost 100 amendments presented. The Supreme Federal Court has also not yet issued a ruling. There is therefore room for course correction.
Correcting course, however, does not mean ignoring the harms of gambling. It means confronting them where they can be measured: with oversight of unlicensed operators, more restricted advertising, deposit limits, and treatment for those who have developed disorders. Prohibition takes the opposite approach. By turning off the sensors of the regulated market, the State exchanges a market that could see for one that cannot, and hopes that the problem will disappear along with the visibility.
