Estimates of the illegal market (Brazil)

1) What counts as "illegal" and why the numbers diverge

Brazil has an authorization regime for fixed odds betting and online gaming (RNG/live) since January 2025. Everything that works without SPA/MF authorization (including offshore sites, prohibited types of games/payments) belongs to the illegal/irregular segment. Discrepancies in estimates arise due to different methods: player surveys, modeling the share of unauthorized brands, payment traces (Pix/cards), foreign trade statistics, etc.

2) Key public estimates of the "gray" segment (2025)

• 41-51% of the online betting market is still operating illegally; for the first quarter 2025, budget revenue losses are estimated at R $1.8-2.7 billion (extrapolation for the year - up to R $10.8 billion).

• 73% of Brazilian players in 2025 used illegal sites at least once (a behavioral indicator, not a share of GGR).

• The estimate of "70-80% illegal" is greatly overestimated; more realistic - ~ 30% of the market. In the same discussion, state speakers brought the thesis "70-80%," but H2 insists on a smaller share.

• Central Bank: up to R $30 billion of bets per month online, with a ~ of 94% return on prizes (high payment).
• Itaú: for the year to June 2024, Brazilians spent R $68.2 billion on foreign platforms (part of this flow is unregulated/illegal sites).

3) What the state does (and how it affects estimates)

Interlocks and perimeter stripping. By August 2025, SPA/MF reported 15,000 + blocked illegal sites and 17.7 million players who had already placed bets legally in half a year; trend - active traffic sewerage.

The start of the blocking wave in 2024: the first thousand domains began to be blocked even before the "combat" launch of the rules of 2025.

4) We translate interest into money: the working range of the "gray" GGR

Step 1. Benchmark for gross volumes: the Central Bank gives up to R $30 billion of turnover (handle) per month. When paying ~ 94%, this ~ R $1.8 billion GGR/month or ~ R $21-22 billion GGR/year of the entire market in the current dynamics.

• Conservatively (H2 ~ 30%) → ~ R $6-7 billion illegal GGR/year.
• Aggressively (IBJR/LCA 41-51%) → ~ R $9-11 billion illegal GGR/year.

Step 3. Reconciliation with fiscal losses: an estimate of up to R $10.8 billion in losses/year according to IBJR/LCA corresponds to the upper limit of the calculation (it takes into account not only GGR, but also the structure of taxes/contributions).

Final fair range 2025: illegal segment in Brazil - ~ R $6-11 billion GGR/year, based on public sources and the current turnover base. This is a range, not a single figure: the proportion changes as locks and authorizations.

5) What data on "money abroad" adds

Spending on foreign platforms (R $68.2 billion in 12 months to June 2024) shows how much money goes offshore. This is not equal to illegal GGR (there is a high payment and part of the sites later entered the "white" circuit), but explains why the initial estimates of "gray" were high and sensitive to the method.

6) Why estimates will decline in 2026

Traffic sewerage: an increase in the number of authorized brands and mass blocking (15 thousand +) drag players into the "white" segment.

Payment control: the strict perimeter of permitted methods (Pix/TED/debit/prepaid) and financial monitoring complicate the access of illegal immigrants to payments. (The context is a statewide blocking campaign and control of Pix streams.)

Public pressure: The Central Bank and the media regularly publish estimates of turnover and risks for households - this supports the political will to clean up.

7) How to use these numbers to editors and investors

When planning the market capacity, take the range of illegal share of 30-50% in 2025 and a decreasing trajectory for 2026 +, if the pace of blocking and authorization continues.

To estimate lost taxes, you can focus on calculating IBJR/LCA up to R $10.8 billion/year as the upper edge (with a high proportion of "gray").

Follow the SPA/MF operational reports (number of locks, how many companies are in the "white" register) - this is a direct indicator of the sewage system.

8) Withdrawal

In 2025, the "gray" segment of the Brazilian online market, according to various sources, occupies from ~ 30% to ~ 50%, which in money - ~ R $6-11 billion GGR/year. The spread is explained by methods and rapid shifts after the start of regulation. Mass blocking (15 thousand + sites), an increase in the number of authorized operators and payment control via Pix/TED/debit/prepaid are already compressing the share of illegal immigrants - and it will depend on the speed of this sewage system how quickly the lower limit of the range becomes a reality.

Relevance: October 11, 2025 (Europe/Kyiv).