Tom Waterhouse’s March update highlights Brazil’s gambling industry’s transformation, emphasizing new regulations aimed at capitalizing on a once grey market. With significant revenue projections and a shift towards formal oversight, the landscape is primed for operators and suppliers alike to seize opportunities amid stiff competition and rising costs.
In the March update from Waterhouse VC, Tom Waterhouse reflects on the burgeoning gambling sector in Brazil, following nearly four years of successful returns, with a gross total return of +3,550%. As of February 2025, Brazil’s betting industry has reached a pivotal point, poised to be one of the largest regulated markets with revenues projected to hit $6.3 billion by 2038. The introduction of a clear regulatory framework marks a significant shift from a previously unregulated, grey market dominated by offshore operators.
Historically, Brazil’s gambling landscape has been contentious since casinos were outlawed in 1946 under President Eurico Gaspar Dutra. This prohibition pushed gambling underground, giving rise to illegal betting operations such as Jogo do Bicho, which continues to thrive culturally. Notably, poker has seen increased popularity accelerated by the digital transformation during the Covid-19 pandemic, while horse racing remains a niche but enduring aspect of the betting culture, potentially rejuvenated by recent regulations.
Football has dominated the betting scene, accounting for over 80% of all sports wagers. This industry has transformed dramatically since the 2000s, when the digital era allowed for mobile and online betting, leading to considerable off-shore wagering. In 2023, the Brazilian government began to enforce a regulatory framework that aims to reclaim lost tax revenue, combating issues associated with offshore operators.
As of 2025, President Lula has initiated a fully regulated market for sports betting and iGaming, eliminating illegal operators and fostering a more structured landscape. The Central Bank’s Pix payment system, which achieves a remarkable 96% transaction rate, offers Brazil a unique advantage in monitoring and regulating betting activities. However, the regulatory environment poses challenges with high barriers to entry for new operators due to expensive licensing fees and stringent operational guidelines.
The competition within the market is intense, with large firms increasingly investing in local partnerships as seen in Flutter’s acquisition of Betnacional. Such partnerships are key to navigating the complexities of the Brazilian market, which requires not only financial investment but also an understanding of local culture and consumer preferences. Furthermore, regulatory conditions may lead to increased mergers and acquisitions as companies strive for greater market share.
Beyond traditional betting, Brazil is witnessing a surge in esports, signaling an expansion opportunity for suppliers. The country’s open environment allows for diverse wagering products, presenting significant market potential for innovative suppliers to tailor unique offerings to meet local demands. For updates and insights regarding the wagering and gaming industry, follow Waterhouse VC on Twitter or visit their website.
In conclusion, Brazil’s gambling sector is on the verge of significant transformation, driven by clear regulatory frameworks and unprecedented growth potential. The country’s historic betting practices have evolved amid legal shifts, providing both competitive opportunities and challenges for operators. Strategic partnerships and local insights will be crucial for success as the market develops. Furthermore, the burgeoning esports industry presents additional avenues for innovation within the gambling landscape. The anticipated developments indicate that Brazil could establish itself as a leading force in regulated gambling markets worldwide.
Original Source: next.io
