Brazil’s decision to prohibit regulated online betting could increase the country’s illegal gambling market by approximately R$25 billion annually, according to industry consultancy H2 Gambling Capital.

In its report, Assessing the Impact of Brazil’s Online Betting Ban, published on September 29, 2026, the consultancy estimated that around 60% of betting activity previously handled by licensed operators would continue through unlicensed platforms.

Under H2’s main scenario, the illegal market would grow from approximately R$17 billion to R$42 billion. The projection follows the introduction of Provisional Measure No. 1,394/2026, signed on September 25, which prohibits the offering, intermediation and advertising of fixed-odds betting across Brazil.

H2 Estimates R$25 Billion Could Move to Unlicensed Operators

Before the ban, Brazil’s regulated online betting market was generating activity equivalent to approximately R$40 billion annually, based on the 2026 run rate.

H2 estimates that around R$25 billion of this amount will continue to be wagered, but through operators without Brazilian licences. The remaining R$15 billion is expected to leave the betting market in the short term.

The consultancy puts the potential shift to offshore platforms within a range of R$20 billion to R$30 billion. The final figure will depend largely on how effectively authorities restrict payment channels used by unlicensed operators and how long the ban remains in force following legal and political challenges.

H2 emphasises that the projected increase in illegal betting activity is more significant than the precise estimate of the market’s current size.

Illegal Market Could Reach R$42 Billion

H2 estimates that approximately 30% of Brazil’s betting market was already operating through offshore platforms before the ban. This would put the existing unlicensed market at around R$17 billion.

With an additional R$25 billion potentially moving away from licensed operators, the total could reach approximately R$42 billion.

The consultancy also examined an alternative scenario based on a 41% estimate of the illegal market share, a figure frequently cited in Brazilian industry discussions. H2 considers this percentage too high. However, applying it would increase the estimated illegal market from R$28 billion to R$53 billion.

In both scenarios, the projected additional volume remains the same: R$25 billion.

H2 notes that the R$42 billion estimate reflects the 2026 annualised market run rate. Its projection for 2027 could be higher as the overall betting market continues to develop.

Survey of Brazilian Bettors Supports the Forecast

The consultancy based its projections partly on a survey of 2,451 Brazilian online bettors conducted in November 2025.

The research identified several patterns in the use of unlicensed gambling platforms:

  • 39% of respondents continued using websites without Brazilian licences even after the regulated market was introduced.
  • This group accounted for approximately 60% of declared betting expenditure among survey participants.
  • Around half of all reported spending came from bettors who had used at least one platform without identity verification during the previous six months.

H2 also examined responses from people affected by restrictions on betting access for beneficiaries of social assistance programmes. Although two-thirds of respondents in this group said they intended to stop betting, the consultancy adjusted its projections because stated intentions do not always translate into actual behaviour.

The findings suggest that a significant share of bettors already had experience with offshore platforms before the prohibition was introduced.

H2 Compares Brazil With the Netherlands

The report also examines the Netherlands, where the government increased gambling taxes and introduced mandatory deposit limits in late 2024.

According to H2’s analysis, approximately half of the decline in the regulated Dutch market reappeared in the offshore segment.

The consultancy considers this relevant to Brazil because the Brazilian measure goes further than restrictions on deposits or spending. A nationwide prohibition removes the licensed domestic option altogether.

In H2’s assessment, bettors who continue gambling after such a measure may move to offshore platforms, while others may stop betting. The consultancy estimates that the former group could account for a substantial share of the activity previously generated by licensed operators.

Impact on Tax Revenue and Player Protection

The potential shift to unlicensed platforms raises questions about tax collection and consumer protection.

Before the prohibition, licensed operators were subject to Brazilian regulatory requirements, including identity verification, facial recognition, restrictions on payment methods and responsible gambling measures.

Unlicensed offshore platforms do not necessarily follow the same requirements or provide equivalent safeguards. They may also operate outside the country’s tax and supervisory framework.

The financial implications could extend beyond gambling companies. Licensed betting operators contributed to public revenue and funding allocated to areas such as sports, tourism, education and public security.

If betting activity moves to unlicensed providers, the Brazilian government may lose tax revenue and regulatory visibility over a substantial share of the market.

H2’s estimate therefore focuses on more than the redistribution of betting activity between companies. It highlights the possibility that a significant amount of gambling will continue outside the system established by Brazilian regulators.

Provisional Measure No. 1,394/2026 introduced the nationwide restrictions on September 25, 2026. However, the measure remains subject to the Brazilian legislative process and legal challenges.

The dispute has also reached the Supreme Federal Court (STF), where proceedings concerning the measure are being considered.

H2’s core forecast assumes that the regulated market closes completely and does not reopen, describing this as the scenario with the greatest legal certainty at the time of its analysis.

However, the consultancy considers a reopening in 2027 more likely in practice. Such a scenario could include both sports betting and online casino products, although a more limited reopening covering sports betting alone is also possible.

The company plans to add further scenario analysis as the regulatory situation becomes clearer.

For Brazil’s gambling industry, the outcome will determine whether the prohibition leads to a sustained reduction in betting activity or shifts a substantial part of the market beyond the reach of domestic regulators.

Source: https://bnldata.com.br/proibicao-das-bets-vai-engordar-o-mercado-ilegal-em-r-25-bilhoes-por-ano-calcula-a-h2-gambling-capital/