Brazil’s iGaming Boom—Here to Stay?

Since Brazil ended its nearly 70 year ban on gambling in 2019, the country has become a hotspot for the iGaming industry. 2025 was a big year for iGaming, but that may be most indicative in newer, emerging markets like Brazil, who are now trying to figure out how and where the industry fits in its economy and what risks, if any, come with regulated gambling. 2026 could be a challenging year for Brazil’s iGaming market, even if the market’s potential looks good on paper.

The Brazilian Story So Far

Historically, Brazil has a well known but complex background with gambling as Europeans introduced card games, horse racing, and other forms of betting taking place as early as the 16th century. Betting houses and lotteries, like “jogo do bicho” (bug game) would prove popular, but operate in legal grey areas or in secret under outright banning. These venues and forms of gaming would oscillate in how they operated depending on how their jurisdiction’s law treated them at any given time.

Despite the barriers, legal and regulated land casinos would facilitate the boom of gambling Brazil experienced in the 1930s and 1940s, even bearing economic benefits. President Getulio Vargas legalized casinos, kicking off a golden age of gambling for the country. Spots like the Urca Casino and Copacabana Palace in Rio de Janeiro proved to be major economic boons to the famous city. Pocos de Caldas, another Brazilian gambling hub, had over 20 casinos at its peak, getting the name "Brazilian Las Vegas”. But many casinos, regardless of city, rivaled the luxury and experience of Vegas, playing host for shows, expos, events, and concerts, all with big names in entertainment.

This boom would be short lived after President Eurico Gapsar Dutra banned gambling and casinos in one fell swoop with Decree-Law 9215, which according to some sources was instigated by his deeply religious wife. Many casinos were shuttered down, and others were repurposed.

But the law merely banned gambling in casinos, not outright killing it. Illegal outlets began to proliferate in the underground, hosting casino games, lotteries, and taking bets for both sports and horses. Even jogo do bicho remained popular as a cultural gambling experience despite its illegality. Bingo and horse racing were the first forms of gambling to come back to the legal fold in 1971 and 1984, respectively, and the state run lottery came after in 1996.

The internet only gave more ways to gamble in unregulated spaces through offshore online casinos, which was certainly helped by the use of cryptocurrency to remove geographical restrictions on transactions for Brazilian players. The 2010s saw Brazilian players use Bitcoin and other currencies to play online casinos right from their smartphones without government oversight. Bingo and sportsbetting faced more legal confusion after bands were reinstated or restrictions were changed, in 2018 sports betting was legalized once more through Law 13,756, but casino games stayed firmly outside of regulated territories.

In December of 2023, the issuance of Law 14,790 acted as the major turning point, regulating what the Brazilian government classified as “fixed odds betting” under the supervision of the Ministry of Finance. Notably, it broadly legalized gambling in its various forms, including online, undoing the equally broad prohibitions of the law passed in 1946.

iGaming had turned Brazil into a major market once more by 2024– the country made 15% of global online casino visits, and roughly 18% of the population (some 26 million people) used cryptocurrency.

But with regulation came taxes, fees, penalties, and a pushout of unregulated casinos. In March 2025 the National Association of Games and Lotteries was officially instituted, initially to oversee sportsbetting and lotteries. More regulation quickly followed in August with the Secretariat of Prizes and Fixed Betting (SPA) putting out five key policies on games, including ones found through online casinos, surrounding responsible gambling, technical standards, monitoring, and player’s rights.

October of that same year saw the Brazilian government blocking around 2000 unregulated offshore casinos from online players. Only 96 operators collectively holding 210 domains remained legal after demonstrating a willingness to cooperate with new regulations while their applications for SPA/MF licenses were under review, according to the government. Of course, part of the cooperation was a fee - a cool 5.3 million USD, or 30 million reais– and that was after meeting compliance standards.

Despite the massive attempt to shut down illegal casinos, they remain elusive. The SPA listed 12500 websites for blocking over the course of 2025, but 80% of those sites stay available to gamblers, showing that illegal gambling isn’t slowing down for Brazil. Further, the Brazilian Institute of Responsible Gambling conducted a study that revealed 73% of Brazilian gamblers continued to use unauthorized offshore casinos, and the institute estimating that almost 50% of operators offer games without oversight, creating potential losses in annual tax revenue in the ballpark of 1.8 billion USD, or 10.8 billion reais. Crypto casinos remain the choice for many players, offering anonymity by skipping AML/KYC procedures and bypassing banking restrictions, despite risks these casinos can pose to people. Clearly, legalization hasn’t been all fun and games for Brazil, or at least its politicians.

Can Everyone Win?

Make no mistake, legal or not, iGaming is getting more and more popular, a report from Stellar found that the number of active bettors increased to 25 million from January to September 2025, and that was only from legal sites. The Brazilian government collected 3.3 billion reais in tax revenue and 2.2 billion reais in licensing/inspection fees from regulated operators. In total, The first year of regulated gambling brought 6.68 billion USD (36 billion reais) in total Gross Gaming Revenue, showing that the market is a serious contributor to Brazil’s larger economy.

Taxes and fees are expected to only get more intense. A bill signed in December of last year will see tax rates on gaming revenue (GGR) from operators increase steadily year over year from 12% to 15% at least into 2028. A sin tax targeted towards players and approved back in 2024 looms on the horizon, but no hard numbers have been published yet. Nonetheless players can still expect to pay 15% on net prizes/winnings as personal income tax.

Nonetheless, this is all indicative of a maturing market; an untapped one for many at that. At the end of 2025, Brazil stood as the world’s fifth largest gambling market. Centralization and regulation may look like hurdles, but operators are showing clear interest in finding out how to overcome them. 

Where’s This Money Going?

The Brazilian government has affirmed it will be acting as a source of income to supplement its welfare and public good programs. Currently, the Social Contribution on Net Profit (CSLL) for operators sits at 9%, in addition to corporate income tax at 15%. A percentage of collected taxes and fees are intended to go towards education, public security, the sports industry, social security, and health programs, among other public services.

However, that's just from licensed casinos– Authorities are still dealing with the issue of regulating and overseeing offshore casinos that are free from taxation and remain so popular for the Brazilian player base. At best, players using offshore casinos are taxed on income from abroad, meaning players need to calculate and pay from their winnings.

Notably, the debate is less about whether this money reaches public services or not and is more about where it goes to, and how much. Towards the end of 2025 the SPA and MF had open consultation regarding how tax revenue from gambling should be distributed among social programs, and the 12% tax on GGR came about after much debate on how gambling can help with Brazil’s financial deficit.

Plino Lemos Jorge, president of the ANJL, recently expressed concern last week around gambling tax revenue being used as a financial crutch to solve the budget deficit. In an interview with iGaming Business, he notes his confidence with the first year of regulated gambling, but notes some issues, namely the increasing tax being a turnoff for potential legal operators and players.

That’s not the only issue - SPA also enforced a ban on welfare recipients playing on licensed sites, mandating that operators verify player’s identity and use public records to ensure they are allowed to play. It was partially lifted just two months later in December, with the verdict still out as hearings on the legislative floor are yet to take place. Lemos Jorge argued that 45% of welfare recipients would just move to illegal betting platforms, according to an ANJL report.

Promising Progress?

In the face of these challenges, Lemos Jorge remains optimistic about the foundation for regulated iGaming heading into 2026. Do operators and players feel the same way?

The increase in online player count and revenue for the iGaming industry in Brazil as a whole should be indicative of consumer sentiment; the demand is there. 

Can new operators get in on the action?

Roughly 80 operators are legally licensed to provide iGaming services to Brazilian players, and the financial barrier to entry is nothing to wave aside: pay (30 million reais) to play. That's not even accounting for some of the most strict AML/KYC procedures that are currently in place. Including facial recognition to access sites. The ANJL and 5 other Brazilian organizations involved in gambling, including the SPA, issued a joint statement showing worry about how tax rates could make Brazil unattractive to potential new licensed operators.

Offshore illegal casinos are still present, and remain a popular choice due to the stringent regulation and taxation associated with legal casinos. There’s clear evidence that players are turned off by using legal casinos. The use of cryptocurrency to preserve identity probably only helps point players towards more unregulated casinos. Even then, legalization has expanded potential, provided you have the capital. Regulation seems to be slowing down overall market growth and presence of competition in the legal side of casino operators.

If regulators in Brazil can quell internal debates and consolidate the market, 2026 could be the next step, however slow, for reclaiming its place as a gambling epicenter.