Imagine a football match where one team spends millions assembling a squad, follows every rule in the book and still has to play against an opponent allowed to use extra players, move the goalposts and ignore the referee altogether.
That, increasingly, looks like the reality of Brazil’s betting market.
Much of the recent public debate has centred on advertising, celebrity endorsements and whether regulated operators are complying with increasingly strict responsible gambling rules. Yet an investigation by Brazilian investigative journalism agency Agência Pública suggests the industry’s biggest competitive threat may be far less glamorous and far more fundamental: illegal betting sites that can reportedly be launched for less than BR1,000.
A comical contrast
A licensed operator entering Brazil faces a BR30m licence fee, extensive compliance obligations, technical certifications, responsible gambling requirements, tax payments, continuous reporting to the Ministry of Finance and constant regulatory oversight.
Meanwhile, according to this latest investigation, an illegal operator can buy a ready-made betting script for a few hundred reais, register a domain, connect a payment intermediary and be accepting deposits within days, with some software packages allegedly even shared free of charge through piracy groups on Telegram and WhatsApp.
It is difficult to imagine another regulated industry where the gap between legal and illegal operators is quite so... dramatic.
That imbalance also helps explain why Brazil continues to struggle despite blocking more than 40,000 illegal websites and introducing increasingly aggressive enforcement measures: Shut one domain down and another appears almost immediately under a different address, often looking nearly identical to the previous version.
You do the math
Illegal operators pay no licensing fees, no gambling taxes, undergo no audits and face no obligation to honor winnings. Some even allegedly manipulate game outcomes through unofficial APIs, while others simply refuse withdrawals altogether.
Every compliance cost avoided becomes another competitive advantage, and the consequences extend well beyond consumer protection.
Payment intermediaries operating in regulatory grey areas make financial flows harder to trace, while cloned games, fake promotions and influencer marketing continue attracting players who often cannot distinguish between licensed and unlicensed brands.
Recent research has shown that most Brazilian bettors still struggle to identify whether a platform is authorized by the Ministry of Finance, leading to different forms of educational measures, such as WhatsApp messages.
A paradox for legitimate operators
Over the past few weeks, Brazil has investigated advertising campaigns, tightened responsible gambling rules, expanded consumer protection measures and announced tougher restrictions on betting promotions, undeniably important initiatives for building a sustainable regulated market.
Yet at the same time, the illegal market continues competing under an entirely different set of rules.
The irony became even more visible this week when Ana Gaming CEO Marco Túlio Oliveira revealed he had effectively been asked to remove his investments from a major Brazilian financial institution simply because he leads a licensed betting company. His experience illustrates how the regulated sector can still face stigma despite complying with one of the world’s most demanding regulatory frameworks.
The real question, however, is whether the industry is spending too much time debating the behavior of regulated operators while its largest competitor remains the one outside the system altogether.
And to be completely clear, that does not mean licensed companies should receive lighter oversight, quite the opposite; consumer protection, responsible gambling and advertising standards remain essential for the credibility of the market.
But if illegal operators can still enter the market for less than BR1,000 while legitimate businesses spend tens of millions simply to open their doors, enforcement risks becoming an endless game of catch-up.
Where do we go from here?
Brazil has already recognized that payment systems may hold the key, announcing tighter monitoring and faster account freezes for illegal operators. Those measures could ultimately prove more decisive than simply blocking websites because cutting off the money is considerably harder to bypass than registering another domain.
The country’s regulated market is beginning to mature and whether the illegal market matures alongside it or finally starts shrinking, may depend less on how tightly licensed operators are regulated and more on how effectively authorities make illegality itself an unsustainable business model.
New ruling in Brazil will take advertisers and influencers accountable for supporting unlicensed operators
