29 September 2026
H2: Assessing the Impact of Brazil's Online Betting Ban
H2 has revised its Brazil forecasts to reflect the ban on regulated online betting signed on 25 September 2026. The ban is a provisional measure, and our core model assumes that the regulated market closes completely and does not reopen, because that is the only outcome with any legal certainty today. Our working view is different: we think the market will most likely reopen at some point in 2027, probably for both sports betting and iCasino, though a sports-only reopening is possible. We will add scenario analysis for these outcomes to the core model as the options become clearer.
The headline is not the size of the illegal market but the size of the increase in it. The figures below are based on the 2026 run rate immediately before the ban, when the regulated market was worth around R$40bn on an annualised basis. The reported 2026 figure will be lower, since it carries only nine months of licensed trading, and the revised annual forecasts reflect that. We estimate that around 60% of that spend, roughly R$25bn, will continue to be wagered but with unlicensed operators, without player protection, without tax and without any regulatory recourse. Around R$15bn is lost to the market in the near term. Our range is R$20-30bn moving offshore, or half to three quarters of the legal market, with the outcome depending mainly on how effectively payment channels to offshore sites are blocked and how long the ban survives legal and political challenge.
On H2's estimate that around 30% of the market was already offshore, the illegal market grows from around R$17bn to around R$42bn. A figure of 41% offshore is the most recent figure to be widely quoted in Brazil; we do not believe it is that high, but on that assumption the illegal market would grow from R$28bn to R$53bn. However, we reiterate that, in our view, the current size of the offshore market is secondary. Whichever starting point is used, the increase is the same R$25bn, and that is the number that matters.
H2’s estimate of the shift from onshore to offshore draws on two sources. The first is H2's survey of 2,451 Brazilian online bettors conducted in November 2025. The offshore channel never closed after regulation: 39% of respondents were still using unlicensed sites, and those players accounted for around 60% of reported spend. Around a quarter of all reported spend was already going to unlicensed operators, consistent with our model's 30% once the usual under-reporting of grey-market activity in survey data is allowed for. Half of all spend sat with players who had used a site with no identity checks in the previous six months. For these players the ban removes their licensed option and nothing else; their offshore accounts and payment routes already exist. Among players using only licensed sites, a question put to welfare recipients facing their own betting ban gave a stated split of two thirds intending to stop and one third intending to continue or undecided. We discount the stated quitting figure because intentions to stop gambling typically convert at well under half, and because 61% of those who said they would stop were already betting offshore when they said it.
The second source is our experience of other markets. When the Netherlands raised gambling tax and introduced mandatory deposit limits in late 2024, we estimate roughly half of the resulting decline in onshore spend reappeared offshore. That understates what a full ban does, because part of the Dutch decline was players spending less within the limits rather than leaving the regulated market. A ban offers no such option. A player who cannot bet onshore either moves offshore or stops, and those who move take their existing spend with them. The Dutch experience therefore marks the floor of our Brazil range rather than the midpoint.
The result is a market of around R$42bn passing through unlicensed operators (2026 run-rate – 2027 estimate higher due to underlying market growth), almost exactly the R$41bn that passed through unlicensed operators in 2024 before regulation. In one sense Brazil is back where it started. In a more important sense it is worse off. In 2024 the large majority of that revenue went to internationally regulated operators such as Betano and Bet365, which were unlicensed in Brazil but carried strong compliance records and consumer protection obligations elsewhere, and which duly took licences when the market opened. Those operators will now withdraw. The R$42bn will instead flow to operators that either could not or would not meet the licensing standard, with limited player protection, no recourse for customers and no tax contribution. Same size, very different market.
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