Sports betting has always been associated with controversial topics in Brazil. Since 1941, when the Law of Criminal Misdemeanors (Decree-Law No. 3,688) banned most gambling in the country, this market has operated underground or in regulatory limbo. However, in 2018, fixed-odds sports betting was classified as lottery games, which are permitted in Brazil, which brought more security to bettors and the market as a whole.
However, in recent years, the discussion about the regulation of betting has returned to the debate, driven by a series of economic, technological, social and cultural factors. Recently, bill 3,626/2023, which regulates online betting, was approved, shedding even more light on the debate. In this case, the main change was due to the taxation of winnings obtained by bettors through games, in addition to the creation of fraud prevention measures.
Countries such as the United Kingdom and the United States, which have robustly regulated the betting market, are examples of how it is possible to maintain a competitive environment, generating considerable revenue for the State.
To get an idea of the size, according to a report published by XP Investimentos in June 2024, the betting market in Brazil is proportionally larger than that of the United States, which, in 2022, totaled US$100 billion or the equivalent of 0.4% of the country's GDP. In Brazil, specifically, the volume registers 1% of the GDP.
In parallel, an analysis published by Sports Value, a company specializing in sports marketing, points out that Brazil has already surpassed, for example, England in the use of betting houses, placing it in a prominent position worldwide. Ahead are only New Zealand, Greece, Norway and South Africa, occupying the fourth, third, second and first positions, respectively.
Because of this, it is undeniable that the market is expanding rapidly and has enormous potential, both from an economic and tax collection point of view. In fact, its formalization opens up space for the creation of direct and indirect jobs, especially in sectors such as technology, marketing and customer support services. In addition, it allows control over the allocation of part of the revenues to areas such as education, health and sports, which increases the social return on bets.
In addition, regulation brings more security to consumers, who will be able to operate in a legal, supervised and transparent environment. This will reduce the risk of fraud, ensuring that bettors can trust the platforms and have their rights protected.
Another crucial point is that it implements policies to prevent gambling addiction, such as betting limits and awareness campaigns. This allows the market to be explored responsibly, minimizing the negative impacts on the mental and financial health of gamblers. However, to achieve this, an efficient oversight system is necessary, since regulating this market in Brazil requires the creation of a competent and independent regulatory agency, capable of monitoring activities continuously and effectively.
What is at stake is the government's ability to create a balanced regulatory environment that maximizes economic benefits and minimizes negative social impacts. With efficient regulation, Brazil will be able to transform the betting market into a legitimate source of revenue and development.
Hugo Baungartner
Chief Commercial Officer (CCO) of the Aposta Ganha group
