I’ve been wondering whether to start with a little bit of context as to what’s happening with iGaming in Brazil at the moment, but I figured if you’re not across it already, then the rest of this piece probably would not be of much interest to you.
So, I’ll assume you already know for the most part. Here’s the tldr version though: Brazil was one of the biggest illicit online gambling targets for a long time, President Lula begrudgingly regulated iGaming in January 2025, channelisation was mostly successful, there was a real regard for problem gambling and strong efforts to detect and tackle this, President Lula is up for re-election on the 4th October, and last week he said “No more online gambling in Brazil”.
He either doesn’t know how eagerly the grey market is rubbing its hands together, or he doesn’t care. And I don’t think most people have even begun to scratch the surface of how deep this goes.
One of the key issues I think a lot of people have missed is just how vulnerable this makes a systemically primed market. Chainalysis data ranks Brazil top of the global list for crypto adoption, added to this around one third of all internet users in the country use VPNs.
I was at SBC Lisbon the last few days, and heard whispers from the shadows that some of the skin casinos (and surely many many others) are already strategising how they can onboard Brazilian celebrities and influencers, channeling them into aggressive advertising campaigns, which on the surface appear to be regionally agnostic, to capture Brazilian traffic.
I think it can be reasonably expected that these same illicit operators will launch global social media campaigns which legally scope, let’s say Chile and Nicaragua, only leveraging someone like CSGO streamer Gaules, and hitting Brazilian Instagram, Facebook, Snapchat and TikTok feeds conveniently themed to catch the fallout of the 28 million Brazilian users who want to satisfy their gambling urges but no longer have a safe and legal place to do so.
The market isn’t only a Goldilocks black market considering how aggressively it was targeted before regulation, but has also been further primed with legal advertising following the regulation Lula himself introduced. This means that new users who were proactively and strategically lured into Brazil’s regulated ecosystem under the promise of state-driven protections are now having the rug pulled out form under them. Users who may otherwise never have gambled have been given the taste of online casinos, conveniently in the palm of their hand, in the interest of the $1.6 billion Lula’s government has made in taxes, when the thought may otherwise never have crossed their mind had they not seen that advert on TV.
In the absence of regulation, the barrier to entry to the unlicensed Brazilian market is basically a tortoise pen. Illicit global advertising targeting Brazilians becomes a no-brainer for the global “grey-market” operators. And since lots of those more reputable operators who enjoyed a larger footprint before regulation then became licensed will now be under a microscope, the government is proactively filtering out the more sociably responsible platforms and opening the door almost exclusively to the most toxic entrants.
Think offshore operations with no responsible gaming whatsoever, no AML, registered somewhere dubious or entirely unlicensed engaging in tax avoidance while driving skin-driven hostile games with no age-gating. Because that’s what the 32% of Brazilians who have used online betting platforms have left.
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