H2 Gambling Capital (H2) estimates between BRL20bn and BRL30bn (£2.9bn-£4.3bn) will move to Brazil’s black market after President Luiz Inácio Lula da Silva announced a Provisional Measure to ban regulated online casino and sports betting in the country.
That shift represents half to three-quarters of the market migrating offshore, the market intelligence company noted.
On 25 September, Lula called online gambling a “cancer” and announced the ban, which takes effect on 6 October. As the ban is a Provisional Measure, Congress must approve it within 60 days.
Following the move, H2, which is owned by EGR parent company Burghclere, has radically revised its Brazil forecasts, with the firm highlighting “the headline is not the size of the illegal market but the size of the increase of it”.
It predicts BRL15bn is likely to be lost to the illegal market in the near term, with that figure eventually reaching BRL20bn-BRL30bn dependent on the success of payment blocks and legal challenges to the ban.
“On H2’s estimate that around 30% of the market was already offshore, the illegal market grows from around BRL17bn to around BRL42bn,” the firm said.
“A figure of 41% offshore is the most recent figure to be widely quoted in Brazil; we do not believe it is that high, but on that assumption the illegal market would grow from BRL28bn to BRL53bn.”
H2 said the estimates are based on two sources: a November 2025 survey of 2,451 bettors which found 39% of respondents were using unregulated sites, and its analysis of shifts in other markets, such as when the Netherlands introduced mandatory deposit limits in 2024.
Though the latter was not a total ban, H2 explained it “marks the floor of our Brazil range rather than the midpoint”.
It noted that Brazil is back to where it started pre-regulation and could, in fact, be in a worse position.
Prior to the regulated market going live in January 2025, H2 said players would gamble with international operators with strong compliance records such as Betano and bet365 – which were granted licences upon regulation.
However, H2 estimated BRL42bn – close to the BRL41bn figure that that passed through “unlicensed operators in 2024 before regulation” – will now go to operators that did not meet Brazil’s licensing standard.
H2 noted the new forecasts are based on a ban being implemented, given this is the “only outcome with any legal certainty today”, but predicted the market will “most likely reopen at some point in 2027”.
The company said this would probably be for both sports betting and online casino, though a sports-only reopening is possible.
There is some consensus around this viewpoint. Regulus Partners estimated there is an 85% chance the ban only lasts a few weeks or months.
President Lula made the decision ahead of the 4 October general election, where he is seeking an historic fourth term in office.
His main opponent, Flávio Bolsonaro, a Rio de Janeiro Senator and the eldest son of former right-wing leader Jair Bolsonaro, criticised the move as “populist, hypocritical and election driven”.
Trade body, the Brazilian Institute of Responsible Gambling (IBJR), which includes operators such as Betano, bet365 and Sportingbet, said the ban “represents a rupture in the regulatory framework” and “jeopardises economic activity”.
The government awarded 85 licences, valid for five years and costing BRL30m each, which means operators have paid BRL2.5bn in licence fees alone in the runup and after the market went live in January 2025. However, the current administration stated it will not offer refunds or compensation.
In the wake of the Lula’s announcement, many of the key publicly listed operators in Brazil including Allwyn, Entain and Flutter published impact statements.
Affiliate Better Collective saw its shares slump by a quarter on the morning of Monday 28 September, the first trading day after the news broke.
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Market intelligence firm believes Latam country will be “back to where it started” pre-regulation following president’s Provisional Measure to shut down online gambling
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