With countless ‘bets’ (as operators are locally called) available, the online betting market in Brazil has experienced exponential growth in recent years, driven mainly by regulation and technological advancements that have expanded consumer access. In the first four months of 2024 alone, the same number of companies were opened as were in 2022.
"The big turnaround for the sector comes with regulation. Now that the gaming sector is 'aligned,' in line with the government and laws, it tends to provide more security for companies and consumers and naturally tends to grow," explains Felipe Mesquita, account executive at Datahub.
Since December 2018, sports betting has been legally recognized as a legitimate operation in the country. However, the sector's regulation would be built over time. Five years later, the government signed the decree regulating the betting market.
"A more mature market breaks the ice with skeptics and, by bringing security to users, should attract more companies," Mesquita points out.
According to the Ministry of Finance, in a one-month period at the end of 2023, 134 companies expressed interest in working with bets in the country. With the market structuring, the country also draws attention abroad. According to Datahub, two foreign companies sought to operate in Brazil in 2023. In 2024, the number increased to five companies.
"Although modest, this increase is significant and indicates a growing interest in the Brazilian market, encouraged by new legislation that can offer greater predictability and legal security," the study points out. These companies are registered with the Federal Revenue Service, implying compliance with Brazil's tax and regulatory requirements, even though they are based in other countries.
Pandemic and technology
Mesquita notes that the sector began to gain momentum by taking advantage of the connectivity that technology promoted in a scenario of social isolation. "The turning point came after the pandemic when people stopped interacting directly, creating space for technology services. The betting sector had a very strong boom," points out the Datahub executive.
Jhon Macario, marketing and research analyst at Datahub, reinforces the idea that technology popularizes the business. "Previously, the business was restricted to lottery houses. Now there is greater accessibility via smartphone," Macario indicates.
The trend also reveals the consumer profile of this market. According to Datahub, 59.8% of bettors are between 22 and 36 years old, representing the main age group of this audience. "The younger generation is very connected to electronics, and the idea of traveling to place a bet doesn't even cross their minds," Mesquita adds.
Diversification of sectors
André Gelfi, president of the Brazilian Institute of Responsible Gaming (IBJR), also highlights that the movement impacts other sectors of the economy, from technology, with the creation of platforms supporting the systems, to communication and sports in general.
"The sector moves billions of reais, generates thousands of jobs, and is currently extremely active, especially after the federal government's regulation at the end of last year," he says.
However, the specialist highlights the sector's maturation process after the federal endorsement. "It is necessary to assess the mistakes and successes and evolve towards other proposals based on the difficulties the market encounters," he says. "The trend is for it to grow even more and impact various sectors."
But Macario emphasizes that the betting movement also attracts an older audience "due to advertising during broadcasts."
Until recently, only six of the 20 teams in Serie A — the top division of the Brazilian Championship — did not have a betting house as their main sponsor. Corinthians became the seventh member of this group after its main sponsor, VaideBet, terminated its contract.
"The platforms are not limited to betting; an important trend in the entertainment market involves actions with influencers, advertisements, and teams being promoted," Macario explains.
"The market has grown, is growing, and will continue to grow"
Felipe Mesquita points out that the outlook for the market is positive and that its increasing structuring should still attract new betting houses and new interested bettors. "There is still a lot of space [for new companies]. The market has grown, is growing, and will continue to grow," he states.
The marketing and research analyst points out that one of the main areas where the sector can expand is payment methods.
Founded in 2018, Pay4Fun is one of the leading online payment platforms in Brazil and, in 2022, became the first payment institution in the betting segment to receive authorization from the Central Bank. The company is responsible for "bridging the gap" between betting houses and bettors. With 20 years in the market, the company's CEO, Leonardo Batista, entered this world with an online bingo platform.
From 2009 to 2017, he began operating a betting house, and according to the entrepreneur, the biggest "headache" was the payment methods, which were mostly irregular. And it is in this area that the sector has room to grow. "There is room to grow in quality, both in betting houses and payment methods. Today there are many poor-quality and irregular services," observes Batista.
In addition to regulation, the sector has the opportunity to continue growing by "combining two national passions," the entrepreneur evaluates. "Brazilians are passionate about betting, and sports betting comes to crown this passion," says Batista.
But he emphasizes that for the sector's growth pace to be sustainable, with responsibility and security, a distinction is necessary: the betting sector is aimed at entertainment, not investment. "You see a series of influencers selling betting as if it were a guaranteed way to make money or extra income. Betting is not extra money, it is not guaranteed money," reflects Batista.
Source: CNN
