Key Moments:
- Brazil’s online gambling market generated R$35.5 billion in revenue in the first half of the year, with illegal operators capturing 51% of the market.
- Yield Sec found illegal betting’s market share rose by 10% between the first and second quarters of this year.
- All Serie A football clubs in Brazil currently have betting operator sponsorships, with 90% featuring betting brands on their front jerseys.
Market Dynamics in Brazilian Gambling
Illegal gambling operators are increasingly influencing the trajectory of Brazil’s sports sponsorship market, according to Ismail Vali, CEO of Yield Sec, a global analytics firm specializing in gambling industry data.
Data from the “Brazil – Online Gambling Market” report showed that online gambling, sports betting, and games of chance earned about R$35.5 billion in the first half of the year. Legal operators generated R$17.4 billion, or 49%, while illegal providers brought in R$18.1 billion, or 51% of the total.
Although Brazil’s rate of illicit gambling is below the global average of 69%, Vali warned that the sector’s rapid growth poses a major threat. It endangers both the stability of sports sponsorships—especially football—and overall sports integrity.
Escalating Illegality and Consequences for Sponsorships
Analysis from Yield Sec revealed a 10% jump in the illegal betting segment between the first and second quarters of this year. Should this trend persist, illegal operators could claim as much as 74% of total market share by 2026.
Vali cautioned that once illegal betting exceeds 60% of the market, sponsorship cancellations will likely increase. If it reaches 75%, about half of all existing sponsorships could be at risk.
“Legal operators will have less money to spend on sponsorships in the future because the revenue base of the market will be depleted“, Vali added. “A lot of what there is today is ego-based, to claim they’re the biggest betting brand or to be the main sponsor of top clubs. But once the revenue dries up, ego does not pay bills.”
Football’s Reliance on Betting Partnerships
Every Serie A club in Brazil now has a betting operator sponsor, and 90% display betting logos on their jerseys. Notably, Flamengo’s August deal with Betano—worth R$268.5 million—is one of the largest to date. It far exceeds their previous five-year R$32 million per year agreement with BRB.
Nonetheless, as illegal gambling siphons resources from regulated partners, experts warn that a significant contraction in sponsorship revenues could occur. Top-flight football clubs, many of which are highly reliant on such agreements, could be particularly affected.
Integrity and Compliance Challenges
In addition to the financial risks, integrity matters also loom. According to Vali, illegitimate operators operate outside reporting and investigative requirements for suspicious betting or match-fixing.
“There’s no monitoring at all in illegal gambling“, Vali said. “If crooked athletes want to manipulate games, they won’t use monitored locations. The entire illegal market is outside integrity protection.”
Regulatory Response and Enforcement Initiatives
Authorities in Brazil have stepped up their response, targeting banks and financial technology firms processing payments for unauthorized operators. Coordination with Anatel and the National Association of Games and Lotteries (ANJL) is under way to block and identify illicit gambling sites.
A technical cooperation agreement was established among the Ministry of Finance Secretariat of Prizes and Betting (SPA), Anatel, and ANJL in September, aiming to strengthen law enforcement and oversight in the digital sector.
Vali argued that, while regulating legal operations matters, the priority must be fighting unlawful activity: “Instead of focusing on licensed operators, you need to fight crime. Get rid of the crooks, or they will find a way to monopolize your market“, he emphasized.
He further cautioned about illegal gambling sites targeting minors through platforms and online games such as Roblox and Fortnite, potentially nurturing new cohorts of users outside the regulatory ambit.
Outlook for Brazil’s Regulated Market
Despite these obstacles, Yield Sec indicates Brazil’s licensed gambling operations had one of the world’s most promising starts in the initial six months. However, Vali urged caution, noting that the market’s foundation could prove unstable without persistent and effective enforcement.
“If nothing changes, within a year, three-quarters of the market will be criminal“, he concluded. “Brazil started strong, but it risks losing control if illegal operators aren’t stopped.”
Breakdown of Revenue: Legal vs. Illegal Operators
| Category | Revenue (R$ billions) | Market Share (%) |
|---|---|---|
| Legal Operators | 17.4 | 49 |
| Illegal Operators | 18.1 | 51 |
- Author
Daniel Williams
