Illegal sites dominate 55% of the online betting market in Brazil and surpass regulated platforms.
Report from SEE Business It reveals that entering the regulated online betting market in Brazil on January 1, 2025, came at a high price. The entry ticket cost 30 million reais for the operating license, plus 5 million reais deposited in a mandatory escrow account, proof of another 30 million reais in net worth, in addition to setting up the entire company structure in the country and a package of player protection measures that cost no less than 40 million reais. And that's without considering marketing – the Flamengo shirt sponsorship alone is worth 268 million reais per year, while at Corinthians the value is 103 million reais. The prize seemed to compensate for the risk and attracted dozens of companies (today there are already 97, owners of 167 brands) to compete in a market that generated more than 35 billion reais in gross revenue in the first half of 2025 alone. The danger? That all this investment would become useless, since Brazilians continue to have access to thousands of illegal casinos on the internet, which do not bear any of these operating costs.
“The regulation was very well done, and legal betting dominated the market very quickly,” says André Gelfi, president of the Brazilian Institute for Responsible Gaming. “But illegal betting adapted just as quickly and is growing without a truly effective crackdown.”
The turnaround began in the second quarter of 2025. From January to March, the legal market had captured 55% of online betting in the country, driven by aggressive marketing campaigns. However, it only took three months for that share to fall to 45%—a rapid drop that triggered alarm bells. The reason? Illegal operators quickly discovered how to exploit every new rule created to protect consumers. The competition between betting sites became an asymmetrical war, fought around the “three Ps”: price, product, and promotion.
Without paying taxes or complying with regulations, clandestine websites manage to offer odds that are impossible for legal competitors to match, bonuses prohibited to regulated bookmakers, and an almost automatic level of ease of access, since they ignore requirements such as proof of age, bank account details, facial recognition, and other barriers designed to protect vulnerable bettors and curb money laundering.
Even more serious: illegal betting sites flood the Brazilian digital environment with an average of 22,000 new promotional messages per day, targeting mainly young people under 35 years old through mid-range influencers and encrypted messaging platforms, such as WhatsApp and Telegram, which are practically immune to oversight.
Without protection mechanisms, minors gamble freely, and compulsive gamblers—who would be blocked on legal sites by self-exclusion tools and income-related limits—find wide-open doors. Gambling sites disappear overnight when a bettor wins significant amounts, leaving them without any recourse. A survey by the Locomotiva Institute revealed that 61% of Brazilian gamblers have already placed at least one bet on an illegal platform.
- More worryingly, 72% admit they cannot distinguish a legal website from an illegal one.
Today, there are 2316 identified clandestine operators, compared to only 167 with official licenses, a ratio of almost 14 to 1 that illustrates the scale of the problem. “All the accusations made against betting sites—that they don't pay taxes, deceive bettors, exploit gambling addiction—only happen in the illegal market,” says Guilherme Figueiredo, commercial director of Betano. “But the bad reputation extends to the entire industry.”
The problem escalated because the fight against illegal betting houses was, from the beginning, largely ineffective. With a structure of no more than fifty people — and only five dedicated to monitoring the entire internet — the Prizes and Betting Secretariat (SPA),
The Ministry of Finance's role is limited to receiving reports of illegal websites and contacting Anatel, the telecommunications regulatory agency, to block them.
However, the illegal betting operations were already prepared: for every address taken down, another one immediately appeared, without any significant impact on the business. It soon became clear that it would be necessary to attack the sensitive point of the operation, the payment methods, preventing the clandestine operators from receiving the bettors' money.
However, it remained to be defined who would have the authority to do so. In the second quarter of 2025, a decree granted this power to the SPA (Sociedade Anônima do Futebol - Football Society) and established severe penalties for financial institutions that process illegal betting transactions, but the practical application of these rules is still in its infancy. “It’s natural that regulatory bodies go through a learning curve to combat criminal organizations that have been doing this for a long time, but we need to accelerate and intensify this movement because the damage to society is increasing every day,” says Plínio Lemos Jorge, president of the National Association of Games and Lotteries (ANJL).
The difficulty is not unique to Brazil. Worldwide, authorities struggle to confront illegal operators, who are generally based in other countries and move with the agility of those who don't need to deal with bureaucracy to change their strategy. Even so, there are lessons to be learned from those who have been in this war longer. The Philippines managed to drastically reduce the presence of clandestine operators with a coordinated action that simultaneously targets the websites, communication channels, payment methods, and suppliers of these operations. Using military-grade technology developed to combat terrorist organizations, the country began, from 2023 onwards, to effectively block the illegal market and maintain an intelligence system to quickly map the criminals' changes in route.
Since January 2023, when this strategy was adopted, the Philippine black market has fallen from 93% to 46% of the total. “Taking down websites and payment methods is important, but when that happens, the bettor is already in the hands of these illegal gambling operators,” says Ismail Vali, president of GCI, the company that operates the software used in the Asian country.
"We need to prevent these scams from reaching the bettor, and this is only possible if we attack the communication channels, the marketing that attracts customers with promises of higher and easier returns than legal ones, and its supply chain."
The counter-attack truly begins with intelligence. ANJL participated in the development, in partnership with the American company EtherCity, of software capable of tracking illegal betting sites and, by simulating a deposit via Pix (Brazil's instant payment system), identifying the payment methods and account holders, allowing the SPA (Brazilian Security Agency) to request the blocking of transactions in conjunction with the Central Bank. The tool is in the testing phase and should be operational at scale in the first quarter of 2026. A new regulation is also planned for the beginning of the year that will prevent suppliers of illegal sites from integrating into the supply chain of legal betting sites. It's a race against time: each month of delay means billions diverted and Brazilians exposed to fraud without any protection. For now, it's the criminals who are celebrating.
