2025 for Brazil, the world’s fifth largest betting market, was a year of great challenges.
Despite its rapid consolidation as one of iGaming’s leading markets, the first year of operating with a regulated market has not been easy for the LatAm giant.
The illegal market continues to operate, seemingly, with impunity and unauthorized platforms still take more than half (51 percent) of the fixed-odds online betting business.
And to make matters worse, President Lula’s government–eager for fiscal resources to cover its budget deficit–is determined to increase taxes on gambling, and earlier this month achieved a victory in the Senate that approved a phased increase of tax on GGR from 15 percent to 28 percent by 2028; while Congress continues to consider imposing other taxes on the successful iGaming sector.
Illicit Market
“2025 was a challenging year for the sector, something that was somewhat expected given that it was the first year of regulation,” Fellipe Fraga, Chief Business Officer of EstrelaBet, told iGamingFuture.
“Moreover, the pressure from the Executive and Legislative branches to increase the tax burden so soon made the complexity even more evident,” he continued.
“What unfortunately did not happen was a decisive fight against the illegal market, so the regulated sector found itself caught between tax discussions and unfair competition with sites that contribute nothing to society.”
And it could have been worse.
Tax Threat
Congress nearly considered a bill that would have doubled the GGR tax; while another proposal, still to be debated next year when Congress returns, proposes creating a tax to finance the fight against organized crime “factions” or gangs in Brazil, the so-called CIDE-BETS tax.
“At least we were able to postpone this tax, the most threatening one, until next year,” said Bruno Geraldini, CEO of Brazino777, with relief.
According to Magnho José, President of the Brazilian Institute of Legal Gambling (IJL), the assessment of the first year of regulation of sports betting and online gambling in Brazil is quite positive, after the country went six-years without regulation, which led to an uncontrolled market that generated a series of problems that Brazilians continue to face.
But José also demanded more effective management from the government.
Framework
“For the market to function fully and in an organized manner, the Secretariat of Prizes and Betting (SPA) of the Ministry of Finance needs to be more effective in its day-to-day operations,” affirmed José.
“The regulatory framework was very well implemented and is considered one of the best in the world. Now it is necessary to focus on daily operations, and it seems that the Secretariat is moving in that direction in its recent regulations, meetings, and by increasing its staff and personnel,” he told me.
The socialist government’s proposal to increase the tax burden on the gambling sector is clearly worrying for José.
“When companies acquired their licenses, the taxation rule was clear: 12 percent of the GGR. Any change to this percentage creates legal uncertainty, as business owners will feel they were ‘sold a pig in a poke’ or literally deceived. The gambling sector in Brazil will face this issue repeatedly before the National Congress,” he attested.
Positive Change
Throughout, illicit gambling in Brazil remains strong.
Resources that are being drained into illegality could be redirected to the legalized sector without increasing the tax burden on regulated betting, said José, who argues that the government must find the right tool to minimize the challenges of illegal gambling and guide bettors toward the regulated market.
Regarding the future of the gambling sector, José expects a significant positive change in 2026 with the approval of bill PL 2234/22, which legalizes casinos in resorts and tourist destinations, as well as bingo halls and jogo do bicho, a traditional underground lottery that remains popular in Brazil.
Sustainable
“The project is expected to be voted on by the Senate in the first half of next year, since the second half will see presidential and legislative elections, which will make its processing more difficult,” he said.
For his part, Fellipe Fraga sees the year 2026 beginning with challenges similar to those of 2025, with the added frisson of scheduled national elections.
“But 2026 also represents an opportunity to continue the work of dialogue and conversation capable of showing the potential that the sector has to bring benefits to Brazil, as an entertainment tool that, in a regulated and sustainable way, contributes to a better scenario for all, with job creation, technological development and protection of the integrity of sports and people,” concluded the EstrelaBet executive.
