Brazil Doubles Betting Revenue While Tightening Illegal Market Grip

A Market Growing in Both Directions

Brazil's regulated betting sector is tracking strong growth in 2026, with revenue reportedly doubling year-on-year and the sector's tax contribution now drawing comparisons to established industries such as tobacco and agriculture. Yet that headline figure sits alongside an uncomfortable counterpoint: illegal operators continue to capture a meaningful share of total wagering activity, prompting a coordinated regulatory and law enforcement response that is reshaping the compliance landscape for every B2B provider with exposure to the market.

Enforcement Escalates Across State Lines

Operation "Conto da Sorte", a cross-state investigation sanctioned by Brazil's Federal Revenue Service, has brought together three Public Prosecutor Offices and local police forces across Pernambuco, São Paulo, and a third state to dismantle an illegal gambling ring. The multi-agency structure signals that federal and state authorities are moving beyond isolated interventions toward sustained, coordinated crackdowns — a meaningful shift in operational posture.

Payment Institutions Now Face Direct Liability

The more structurally significant development for B2B stakeholders is the publication of Ordinance 1,766 by Brazil's Finance Ministry. The ordinance formally defines joint tax liability for banks and payment institutions found to be assisting or promoting illegal betting operations. Key compliance implications include:

• Financial institutions can now be held co-liable for tax obligations arising from illegal betting transactions they process or facilitate.
• The rule applies broadly to any entity in the payment chain, not solely the primary operator.
• Liability exposure is tax-based, meaning financial penalties can compound beyond standard regulatory fines.

Why This Matters for Operators and Providers

For B2B providers — payment processors, platform suppliers, and banking partners — the joint liability framework fundamentally changes the risk calculus of serving the Brazilian market without rigorous due diligence on operator licensing status. Previously, enforcement risk was concentrated on the illegal operator itself. Ordinance 1,766 distributes that risk upstream into the payments infrastructure.

Licensed operators competing against illegal platforms will likely welcome stricter payment-layer enforcement as a tool to level the playing field. However, they should also review their own third-party payment arrangements to ensure no indirect exposure exists through shared processing rails.

The dual trajectory — rising regulated revenue combined with active enforcement and new liability instruments — suggests Brazil is moving toward a more mature, defensible regulatory architecture. The window for casual market participation is closing.