Brazil’s efforts to control its rapidly growing gambling market have struggled to address concerns over household debt, problem gambling and organised crime, according to an analysis published by The Economist on October 15. The publication argues that the country’s regulatory approach has failed to resolve the issues associated with betting, while the recently introduced ban on online gambling risks driving more activity underground.
In an article titled “Brazil’s gambling wars are only just beginning,” the British magazine examined the consequences of the country’s decision to legalise sports betting and online gambling, as well as the political debate over how to regulate the industry.
Brazil’s betting market grew rapidly after legalisation
Brazil legalised sports betting in 2018, but the initial framework did not establish comprehensive regulations for the sector. The country subsequently became the world’s fifth-largest betting market, with players losing more than $10 billion in 2025.
The industry has also become a source of public revenue, with gambling taxes contributing significantly to government finances. However, its expansion has prompted criticism from businesses, healthcare professionals and religious groups over concerns about household debt, consumer spending and gambling-related harm.
In 2024, President Luiz Inácio Lula da Silva’s government introduced measures to strengthen oversight. These included restrictions on advertising, steps to prevent the use of credit cards for betting, age-verification requirements, a 30 million reais (around $6 million) licensing fee and a 12% levy on operator revenues.
The measures were intended to protect consumers, limit organised crime and generate tax revenue. However, officials and researchers argue that significant challenges remain.
Illegal gambling remains a concern
The Economist cites estimates from Guilherme Klein of the Federal University of Rio de Janeiro, who calculated that gambling-related spending reduced Brazil’s GDP by 1% in 2025 as money was diverted from other economic activity.
Organised crime has continued to operate in the sector, reports also seem to indicate, with criminal groups moving into online gambling. Anchieta Nery, an intelligence chief at Brazil’s Justice Ministry, said these groups run both legal and illegal websites.
Meanwhile, Luiz Orsatti of Procon-São Paulo, a consumer-protection agency, noted an increase in people placing large bets and accumulating debt.
A 2025 academic survey found that approximately 7% of Brazilians engaged in problematic gambling, compared with 2% in the United Kingdom.
These concerns have contributed to growing opposition to the industry, even as gambling companies and their supporters argue that prohibition could strengthen the illegal market rather than eliminate it.
Proposed ban sparks industry opposition
Brazil’s government moved to ban online casinos and sports betting in late September, citing concerns about gambling addiction, debt and the impact on vulnerable households.
The restrictions have drawn criticism from the betting industry and football organisations. Several major football clubs have warned that a permanent ban could threaten Brazilian football, which receives sponsorship revenue from gambling companies.
Betting operators have also threatened legal action to recover the approximately $500 million they paid in licensing fees. Industry representatives also argue that prohibition could expand an illegal market that already accounts for an estimated 30% of gambling activity.
International experience points to a different path than the one adopted by Brazil. The United Kingdom, Germany, and Italy opted to combine betting limits, active oversight, and rules protecting bettors, instead of broad prohibitions.
Moreover, Brazil’s history with prohibitions is not encouraging. In 1946, Brazil banned gambling and closed establishments ranging from betting shops to bingo halls. The result was the strengthening of the jogo do bicho, an illegal lottery controlled by criminals
The political debate is unfolding ahead of Brazil’s presidential election runoff, scheduled for October 25. Lula’s rival, Flávio Bolsonaro, is reportedly more supportive of a less restrictive approach, potentially allowing sports betting while prohibiting online casinos.
The Economist concludes that Brazil faces a difficult policy choice: how to address gambling-related harm and organised crime without pushing consumers towards unregulated operators or eliminating a significant source of business and tax revenue.
The election result should define the direction of policy for the sector in the coming years.
