Brazil’s New Betting Market: High Entry Costs

Brazil’s fledgling online betting market, once heralded as a gold rush for international and domestic operators alike, is now showing signs of rapid consolidation. According to M&A expert Christian Tirabassi, founder and senior partner at Ficom Leisure, a steep regulatory ladder and tightening economic pressures are pushing the industry toward a future dominated by just 10 to 12 major operators.

The industry formally launched on January 1, 2025, with 14 full licensees. That number has since ballooned to around 80 following approvals by the Secretariat of Prizes and Bets (SPA). But the appearance of a flourishing marketplace masks a harder truth: many of those operators may not survive the next phase.

The High Price of Playing

At the heart of the challenge lies Brazil’s stringent and costly regulatory framework. An upfront BRL30 million (approximately $5.5 million) license fee has already served as an initial filter. Yet, the pressures don’t stop there. The looming prospect of an increase in gambling tax from 12% to 18% of gross gaming revenue (GGR), along with recent advertising restrictions, could force many mid- and lower-tier operators out of the market.

“The companies that were strong performers in Brazil before regulation are realistically keeping that leadership position,” says Tirabassi. “The majority of the market will be divided into 10 to 12 operators. The [operators] below a certain threshold of GGR will really struggle.”

For context, Brazil’s betting industry is projected to generate BRL31 billion ($5.5 billion) in GGR by 2025, doubling to BRL64 billion by 2030, according to H2 Gambling Capital. But those figures do not factor in the potential tax hike, which would significantly shrink the margins for all but the most resource-rich operators.
Marketing Blitz Ahead of Restrictions

Adding to the squeeze is Brazil’s recent Senate approval of tighter advertising rules, including bans on influencer and athlete endorsements and the introduction of watershed periods. While intended to promote responsible marketing, the move is expected to heavily disadvantage smaller players who rely on lower-cost influencer-driven campaigns to gain traction.

Tirabassi forecasts a marketing frenzy in the short term: “Before [restrictions] happen, companies are going to flood the market. They will try to get the biggest market share they can. And if and when those restrictions come in, they’ll have a sizable market share that potentially, they will keep.”

He estimates over $2.5 billion will be spent on marketing in Brazil over the next 18 months, with the lion’s share coming from major players like Bet365, Flutter, and EstrelaBet.

Room for Niche and Regional Operators?

Despite the daunting barriers, Tirabassi sees a path for smaller operators—albeit a narrow one. “This could be a regional niche,” he says. “Not to be a national operator, but maybe an operator that has a decent market share in a specific region for whatever reason.”

These regional or niche strategies would limit overall revenues, with operators unlikely to exceed BRL200–300 million in annual GGR. Still, for some, this may be a viable route to survival or acquisition. As smaller operators face mounting pressure, M&A activity is expected to accelerate. Tirabassi believes Brazil will soon become the most active M&A market in Latin America’s gaming history.

For independent firms, this could mean either an opportunity to cash out or a chance to fold into larger entities. But Tirabassi warns that being acquisition-ready requires more than just legal compliance.

“What we’ve seen is if you have a very large business with a [tiny] corporate structure… that’s where operators will have to catch up,” he explains. “They need to have a CFO and a proper corporate adviser reviewing their numbers, to be ready for due diligence.”

 

Operators below a certain threshold of GGR will really struggle to compete.

Outlook: A Market of Giants

Brazil’s newly regulated betting market promised opportunity, but its reality is one of steep costs, complex compliance, and an increasingly uneven playing field. The most likely outcome, analysts agree, is a landscape dominated by a few large, well-funded operators—with smaller players either absorbed or pushed to the fringes.

As Brazil hurtles toward full market maturity, the message is clear: only the most prepared—and most well-capitalized—will be left standing.