Alex W. Pariente, the founder of Pariente Advisory, highlights the remarkable expansion of Brazil's regulated betting market, which has already generated substantial revenue. However, it continues to grapple with intense competition from the illegal sector. From January to April 2026, the Brazilian Federal Revenue Service reported tax collections of BRL4.586 billion ($886.2 million) from betting operations, nearly double the BRL2.283 billion collected in the same months of 2025.
Pariente indicates that while these figures reflect the initial success of the regulated framework, they do not yet confirm its overall establishment. Monthly revenues showed considerable fluctuations during the four-month span, with estimates suggesting that between 41% and 51% of total betting activities still take place outside officially licensed channels, hindering effective market channelization.
The article outlines that Brazil has implemented a significant regulatory framework, evidenced by efforts from the SPA (Secretariat of Prizes and Bets), the integration into the Sigap (Integrated System for the Management of Public Administration), and the establishment of the Betting Database by the Federal Police. Nevertheless, Pariente emphasizes that the existing institutional capacity is inadequate to curb illegal operators, resulting in less effective oversight and allowing a portion of demand to persist beyond state control.
Anticipation surrounds the 2026 World Cup, which is expected to be a pivotal moment for Brazil's betting market, with projections suggesting the event could generate around BRL19 billion in betting activity. Pariente asserts that this occasion will test how well the regulated system can capture demand, especially given the allure of offshore platforms that often evade compliance and consumer protection obligations.
Despite its accomplishments, Brazil needs to convert its progress into enduring operational coherence. Pariente sees the essential challenge in the upcoming months as the need to enhance integration among regulation, oversight, and market operations to prevent the illegal sector from solidifying its position during a critical period.
The Brazilian Federal Revenue Service's reported figures indicate the sector's growth, with collections from betting companies reaching BRL4.586 billion from January to April 2026, an impressive rise from BRL2.283 billion during the same period in 2025 and stemming from 87 licensed operators — a notable increase from the 49 active at the market's inception.
These figures instill a certain degree of institutional confidence in Brazil's regulatory journey, although Pariente cautions that this confidence is incomplete. The tax authority's projections for 2026 anticipate revenues between BRL11 billion and BRL13 billion, following BRL9.95 billion collected in 2025. In line with Complementary Law 224/2025, the tax rate on Gross Gaming Revenue (GGR) will rise from 12% to 13% in 2026 and to 15% by 2028. Should these expectations materialize, Brazil would quickly establish itself as one of the highest-taxed gaming markets globally, currently ranked fifth in revenue after the US, UK, Russia, and Italy.
However, the monthly revenue trends deserve scrutiny. After peaking at BRL1.49 billion in January, revenues dipped to BRL1.04 billion in February, fell further to BRL859 million in March, and then rebounded to BRL1.189 billion in April — a 38.4% recovery from March but still below January's highs. Such volatility signals that the market has not yet reached a stable operational baseline.
On the structural side, the Brazilian Federal Revenue Service primarily measures performance within the licensed segment; there are no equivalent metrics for the unlicensed market. Independent assessments suggest that illegal betting comprises 41% to 51% of total betting activities in Brazil. The Gaming Compliance International Global Report 2025 indicated that a staggering 78% of global online gaming occurs outside formal regulatory frameworks, positioning Brazil within a broader global trend.
The fiscal figures are generated through existing systems but do not prove the system's overall capability.
Brazil has indeed set up the right institutional foundation. The SPA has begun enforcement actions in early 2026 targeting licensed operators with poor KYC protocols, in line with SPA/MF Ordinance No. 722, marking the end of the transition tolerance period. The Sigap real-time data reporting system now operates seamlessly with licensed operators, and the SPA has extended its cooperation with the Brazilian Digital Council to facilitate the blocking of illegal websites and enforce advertising compliance.
The newly introduced Betting Database by the Federal Police strengthens the ability to analyze data for financial intelligence and combat issues like match-fixing and betting fraud. This development aims to foster shared intelligence among law enforcement, regulators, and licensed operators, driving compliance and enforcement efforts in a unified direction.
Despite these advancements, institutional capacity remains a constraint. SPA leadership has acknowledged resource limitations as an impediment to effective enforcement. A senior market analyst remarked that tax revenue could potentially double with increased action against the illegal market, underscoring the regulators' partial efficiency against a backdrop where substantial activity remains unregulated.
The Desenrola Brasil program exposed structural risks when it limited access to licensed platforms for certain consumers without measures to deter them from illegal options, effectively redirecting demand to unregulated markets.
As the world anticipates the 2026 FIFA World Cup, co-hosted by the US, Canada, and Mexico, it represents the first major tournament allowing legal betting in Brazil's regulated market. Betlaw, a sports betting advisory firm, estimates that 10% of the global betting volume could be concentrated in Brazil, amounting to around BRL19 billion. Global betting during the tournament is projected to surpass $50 billion, significantly higher than the $35 billion registered in Qatar in 2022, driven by additional matches and favorable North American time zones.
The World Cup presents a critical test for Brazil's regulated market. While demand is expected to flow into the market, the real question is how much of that demand will be captured by licensed operators compared to offshore platforms, which are exempt from various compliance and advertising regulations that govern legal operators.
The advertising framework for the tournament adds complexity, as each ad must include the operator's authorization number, with licensed operators accountable for their advertising content and prohibited from making certain claims or targeting minors. While these standards strive for responsible messaging, they create asymmetry in competition, as illegal platforms face no such restrictions while vying for the same audience.
A scenario involving match-fixing during the World Cup would not only undermine sports integrity but, given that a significant share of betting occurs through illegal channels, it would also jeopardize market integrity, imposing fiscal and reputational burdens solely on licensed operators.
Brazil has accomplished significant strides in just 18 months of regulated operation, achieving what many jurisdictions take years to realize. The Federal Revenue Service’s reporting demands, SPA's shift to active enforcement, integration with SIGAP, and the creation of the Betting Database represent substantial institutional progress.
The framework is established, and fiscal indicators are promising. However, the remaining gaps are operational and centered on coordination. Effectively narrowing the channeling gap requires concerted efforts among operators, payment processors, advertisers, search networks, enforcement bodies, and institutional stakeholders, all pursuing a unified objective.
Countries that have effectively curtailed illegal markets, such as the UK, Sweden, and Denmark, succeeded by combining robust product regulation with direct interventions against illegal operators, public education campaigns, and strengthened enforcement mechanisms. None of these strategies alone were sufficient; only through sequential and coordinated application did they yield results.
Brazil possesses the necessary framework, the fiscal foundation, and the imminent World Cup serving as a real-time assessment of its system. The next year will reveal whether regulatory, enforcement, and commercial sectors can achieve systematic collaboration or if the illegal market will take advantage of this critical juncture to consolidate its foothold.
