Tom Waterhouse’s March 2025 newsletter reviews Brazil’s shift to a regulated betting market, forecasting $6.3 billion in revenues by 2038. With a history rooted in informal gambling, Brazil now enacts strict regulations under President Lula, requiring high capital for market entry. This emerging market presents substantial opportunities for competition, tax revenue generation, and innovative betting solutions.
Australian bookmaking figure Tom Waterhouse released his March 2025 update from Waterhouse VC, centered on Brazil’s gambling sector. Since August 2019, the fund has posted an astounding gross return of +3,550% (annualized at 91%). This update highlights Brazil’s evolution from an unregulated grey market to a formalized betting economy.
January 1, 2025, marked a critical change for Brazil’s betting industry, transitioning from an unregulated environment to a structured regulatory framework rejecting unlicensed betting. This pivotal moment positions Brazil as a likely top player in the global betting market, forecasting revenues of $6.3 billion by 2038. Operators are eager to capitalize on these new regulations, while the country stands to benefit significantly from reclaimed tax revenues.
Brazil’s gambling history spans over 80 years, starting in 1946 when President Dutra banned casinos, shifting the betting economy underground. Prohibition did not eliminate demand; instead, it led to alternative forms of gambling, such as cruise ship casinos and Jogo do Bicho, which operated outside the law. Moreover, poker and horse racing persisted, adapting and thriving in this informal landscape.
Football stands out as Brazil’s most favored betting sport, representing over 80% of all wagers placed. The early 2000s internet boom and the instant payment platform, Pix, transformed how bettors engaged with sportsbooks. Consequently, offshore operators grew in number, prompting regulatory demand as billions were lost in untaxed revenues.
Brazil legalized sports betting under President Temer in 2018; however, a lack of regulatory guidelines allowed a chaotic market to flourish. By December 2023, proposed regulations began enforcement, highlighting the deeply-rooted gambling culture in Brazil, with many top football clubs heavily sponsored by betting companies.
As of 2024, stricter measures were enforced to combat unregulated betting, banning credit cards and cryptocurrency use in betting. The official launch of regulated markets in 2025 under President Lula signified a pivotal shift. The government has taken decisive action, closing thousands of illegal platforms while leveraging Pix’s dominance in transactions.
The high cost of entry (US$6 million for a license) limits competitors to major firms. Regulations require domestic establishment and local partnerships, with a clear preference for operators utilizing Pix. Partnerships with local sports clubs like Flamengo and Corinthians have become crucial for visibility and ongoing success in this competitive market.
With a projected 12% GGR tax and a 15% withholding tax on winnings above US$547, revenue generation will fund initiatives in education and tourism. However, only the strongest operators will thrive amid fierce competition and rising customer acquisition costs. Flutter’s sizable investment into Betnacional underscores this competitive landscape’s financial demands.
Brazil’s gaming market has vast potential, including trending sectors like esports — now the second most popular language on Twitch. This growth hints at opportunities for suppliers to offer tailored products, as operators strive to stand out in a packed marketplace. Stakeholders interested in betting trends should monitor updates via Twitter (@waterhousevc) or WaterhouseVC.com.
Brazil’s betting industry is transitioning from a grey market to a regulated environment, offering significant opportunities for operators and suppliers. The regulatory framework, effective in 2025 under President Lula, is expected to draw substantial investment and generate vital tax revenue. However, competition is fierce, with stringent entry barriers and market high costs necessitating well-funded operators with local insight. The vibrant Brazilian culture and keen interest in betting present both challenges and opportunities moving forward.
Original Source: next.io
