LIVE FROM SÃO PAULO: The euphoria of the Brazil Bets boom has subsided, growth has slowed, taxes have risen and investment has fallen as reality sets in. It’s been a tough first year of regulation for operators in Brazil’s crowded sports betting industry.
But the weaker operators, many now facing precarious financial straits, are hoping to get a shot in the arm from a predicted surge in betting during the upcoming FIFA World Cup, which may pull them to fiscal safety.
Analysts are expecting a rush of M&A after the World Cup–and into next year–, as the big guys gobble-up folding sportsbook sites and the Brazilian market matures and becomes more concentrated.
Some predict a drastic drop in the number of sports betting operators from 85 currently licensed to just 35, or even less.
Walk Down The Aisle
“The long tail is waiting for the volume spike with the World Cup, so their numbers look better and valuations tend to be higher,” an executive of one of the large multinational operators in Brazil told me during a debriefing at the ongoing BiS SiGMA South America event here in São Paulo.
“They’re looking to dress the bride up before any marriage.
“After the World Cup you’re going to have a proper picture of what the reality is going to look like in terms of competition perspectives.
“The long tail are the ones that are going to fail, and you see them saying: ‘I’m going to wait and see if I can find a way ahead’,” the executive, who asked for anonymity, told iGamingFuture.
The amount of Brazilian operators losing money was unsustainable and the collapse of a number of businesses was inevitable, followed by a spree of mergers and acquisitions, he continued.
Election Year
“There is already a secondary market for licenses, because new licenses are not forthcoming.
“We are in an election year and the government is not supporting the gaming industry, with President Lula seeking a fourth term saying he would shut down all betting in Brazil, which of course is electoral rhetoric,” the executive with years in the gambling business said.
Many Brazil watchers concur that 2026 will be a difficult year for the gambling industry.
Evangelical religious groups are pushing Congress to block the legalization of land-based casinos–banned in Brazil since 1946–and seeking to push through a ban on Bets advertising and sponsorships, which would be disastrous for Brazil’s major league soccer clubs, who rely on the income from these betting platforms to cover wages for their expensive players.
Anti-betting lobbies blame the sports betting industry for the high indebtedness of Brazilian households, although Brazilian consumers have been spending more than they earn long before betting was allowed to flourish.
Passing Storms
Some experts and consultants, nevertheless, see the storm passing and M&A taking off later this year and next, with money flowing in again from London and the United States, once the iGaming market in Brazil matures fully, and once compliance within the regulations is consolidated and the tax and legislative uncertainties get resolved.
Lawyer Bernardo Freire, partner at Cavalcanti Freire Advocacia, sees the number of sports betting operators—currently around 85—falling to roughly 35 solid operations, and potentially fewer.
Freire also expects prediction markets to soon become a reality in Brazil.
Predictive products within the financial sector have already been authorized by the local SEC, the Comissão de Valores Mobiliários (CVM), and will be launched this year.
Sports betting prediction markets will more likely delay until next year. And regulations are needed to draw a clear line between the derivative market and sportsbook market, Freire said during a panel discussion at BiS SiGMA São Paulo summit.
As for land-based casino regulation, which has been delayed for decades, this is not expected to be approved in the near future due to resistance from religious groups who have convinced many Brazilians that gambling is a social evil.
