Gambling in Brazil has a long and complicated history. However, Brazilians are determined to turn things around and recent changes suggest that the country might be on the way to opening to online gambling.

Brazil is the largest country in Latin America and one of the most populated in the world with 214.3 million citizens. It offers promising opportunities for online-based gambling businesses with a 77% internet penetration rate. At the same time, online casinos are struggling due to hard pushback from the local government and strict gambling regulations.

Legal situation

Over the years Brazil has had a fluctuating position when it comes to gambling of all kinds. In 1946 the country banned land-based casinos and this law remained until the 1970s when state-owned lotteries were permitted.

In 2010 the Brazilian government tried to prohibit online casinos, and then again in 2013, but their efforts proved unsuccessful, possibly due to locals’ affection for sports and the betting associated with it. It is important to note that cross-border online operators are allowed to offer their service to Brazilian citizens.

Industry experts have noticed a positive shift in the country’s attitude toward gambling. This could be explained by the enormous potential online gambling has to contribute to the local economy by creating many job opportunities and bringing substantial investments to the country.

The country is still experiencing high inflation and slow economic growth. Therefore, it is estimated that local online casino players spend around $200 million annually on off-shore websites. If the government permits the iGaming industry, this revenue will significantly impact the Brazilian economy.

Recent legal changes

Brazil is on its way to passing new gambling laws that permit sports betting online and in land-based venues. Therefore, the legal bill is already approved by the lower house of Brazil’s parliament.

Some of the requirements for emerging an online casino include:

• Only local companies will be allowed to apply for licenses, meaning that international operators must establish a local entity.

• The license fee is estimated to be €5.69 million and will permit the operation of a single app or website. The license will be valid for 3 years.

• The tax rate will equal 18% of the Gross Gaming Revenue.

• Bonus bets will be prohibited, and operators will not be allowed to include them in promotions.

Format legality

When talking about Brazilian gambling, it is important to make the following distinction: all forms of game of chance are prohibited, whereas games of skill (like poker) are not. The various formats of gambling have different legal statuses in Brazil. Below is a brief overview of what’s permitted and not regarding gambling.

Casino games

Casino games of all types are generally considered illegal. Land-based casinos have been banned since the mid-20th century. Theoretically, that includes online casinos, but the online aspect of gambling is not explicitly regulated.

Lottery

Lotteries are legal and solely regulated by the Brazilian state. Caixa Econômica Federal is the governmental body that controls this type of game and has a full monopoly over any kind of lottery.

Poker

Poker is considered a game of skill, so it is not prohibited in Brazil. It does not require a license, but the game is only allowed in buy-in poker tournaments.

Sports betting

Sports betting is considered legal but still awaits final approval from Brazil’s Ministry of Finance. A law legalizing sports betting was passed in December 2018, leading to its popularity among locals and making it challenging to regulate.

One countermeasure the government undertook was to force sports betting operators to be headquartered in the country to be deemed legitimate. Recently, the Brazilian government released a provisional document detailing the legalization mechanism. Sports betting is expected to bring the Brazilian country a gross revenue of anywhere from $385 million to $1.54 billion.

Brazilians can wager on fantasy sports as it’s not considered gambling nor sports betting but a game of skill involving complex player strategies.

Market and payments

The Brazilian market holds vast potential when it comes to gambling. The country is big, people are passionate about games (mainly of the sport type), and internet adoption is relatively high. The only major obstacle stopping gambling from exploding is legislation.

However, the recent changes regarding sports betting are a big step towards establishing a legal framework for online gambling.

The iGaming market in Brazil is currently estimated at around $265 million. More than 300 websites are believed to serve the market (some of them belonging to international operators), with some 186 functioning as online casinos. If online gambling is legalized, it is expected that the country will increase its gross revenue tremendously.

As mentioned before, Brazilians can bet online. Many websites that belong to foreign operators cater to the local market accepting payments in the local currency real (BRL). Since the Bitcoin explosion, players can also pay with most cryptocurrencies.

Crypto has been on the rise in the country, offering a much safer and faster payment method. In 2022, around 7.8% of Brazilians were estimated to own crypto (approximately 16 million people of the total population), trading $11.4 billion in stablecoins.

Despite crypto’s growing popularity, Brazilians still prefer to pay with credit and debit cards, which is well over 70% of all processed online payments.

Online gaming software

Because of the local legislative restrictions, anyone wanting to open an online gaming business in Brazil must purchase casino software in accordance with the Brazilian gambling jurisdiction.

Another thing online casino operators must look for when choosing casino software is its availability for mobile devices. Considering the strong preference for mobile betting, casino providers and operators must offer a user-friendly mobile version.

It goes without mentioning that any casino software must be available in Portuguese and able to process the local currency. Even the most technically advanced casino software won’t attract customers if it doesn’t offer an intuitive interface and appealing visuals.

In a highly competitive market, casino operators must offer a variety of games with engaging graphics. When purchasing casino software, it is also important to consider the integration with external platforms and seamless HTML5 customization.

Currently, many iGaming software solutions from providers such as EGT Digital offer a full suite of comprehensive and robust tools for successfully running an online gambling business.

Preferred games

Regarding game preference, the statistics for 2022 showed that Brazil’s favorite casino game is roulette. Blackjack is another trendy casino game offered by every major operator.

Having in mind that poker is considered a game of skill and has an unclear legal framework, this gambling activity is vastly played by the local population. Interestingly, live dealer games have also gained popularity among Brazilian players.

As mentioned previously, Brazilians are keen on sports betting, and football is considered to be the most preferred sport for gambling. It is estimated that around 81% bet on this particular sport, with basketball and eSports coming in second and third place, respectively.

In addition, lotteries and scratch cards stand out as favorite games of chance as well. However, the main difference is that both are entirely state-owned.

Online casino marketing

The gambling industry has experienced a significant transformation, moving from small-time casinos to huge venues offering hundreds of games and embracing the latest digital innovations to answer the ever-growing needs of casino players worldwide.

Constant technological and software advancements have made online casino operators look for new ways to distinguish themselves by achieving greater visibility and attracting new customers.

The over-saturation of sports betting in Brazil and online casino websites makes it hard for a new business to get noticed. This is why a clever and well-implemented marketing strategy is important for any online casino. Here are a few ways that could help online casino operators become more successful.

Social media

Paid advertising for gambling businesses within social media might be legally restricted. Nevertheless, the presence on social platforms offers a chance to reach the desired audience organically. According to Statista, WhatsApp is the most popular social media platform, followed by Instagram and Facebook.

Content and email marketing

If used correctly, content is agreat marketing tool for lead generation and brand visibility. Casino providers and operators can benefit from informative content through blogs and articles to attract players. For example, they can use videos to showcase player strategies, new games, and company news to drive the core message further and strengthen the brand.

To maximize results, any content should be SEO optimized, as well as your website and mobile app, to rank higher in search engine results pages and app marketplace searches. It is important to note that Brazil’s most popular search engine is Google.

The focus must be on relevant keywords, semantic phrases, and your buyer persona to increase your reach and visibility and potentially gain new clients. It is important to target particular countries, regions, or cities where gambling is allowed by customizing your marketing strategies and online promotions in accordance with the Brazilian jurisdiction.

Email marketing is an important tool to keep existing players interested or engage inactive ones. Creating personalized and segmented emails is a valuable and affordable way to connect with customers and keep them invested in your brand.

Affiliates

Up-and-coming online casino operators and providers might first need help attracting new players, so partnering with affiliates is a good idea.

Affiliates could help online casinos with banner campaigns, write in-depth reviews of games and services, list inclusions, and drive more traffic and website visits. Affiliates are great for positioning your product to the right audience as they are often industry professionals with a vast following or an extensive network of business contacts.

Events, sponsorships, and co-branding

Sponsoring gambling tournaments or sports events is an excellent way to attract new customers and increase your brand visibility. Considering Brazilians’ passion for sports, this strategy can effectively boost your business’s visibility and potentially increase traffic to your website.

Collaboration with other businesses through co-branding is another way to get visibility. Using the other sponsor’s or event’s popularity could drive attendees to your website and increase sign-ups. If sponsoring external events is not part of your marketing strategy, organizing tournaments may be a great way to engage with customers.

Customer reviews

Having satisfied players is the best advertising for any online casino website. Therefore, it will be highly beneficial, if these individuals share their positive experiences with your products online. Furthermore, this will create brand trust, solidify your reputation, and could be a lead-generation magnet in marketing materials.

Responsible gambling

A strong responsible gambling program backed with plenty of resources could help establish your brand as trustworthy and ethical. This, in turn, shows that you are taking steps to reduce excessive gambling and gambling-related harm.

There are different types of tools that target online gamblers, typically through behavior tracking, feedback, and, in some cases, advice on how to reduce gambling.

Conclusion

The Brazilian gambling market has experienced significant growth in recent years. With advancements in technology and the widespread availability of high-speed internet, more and more people are turning to online gambling as a form of entertainment.

This trend is expected to continue. Establishing the legal framework will also make the local market lucrative for new investments, likely contributing to the country’s economic development. If you are in the iGaming business, it is good to be on the lookout for future changes and, above all, opportunities.

FAQ

Are online casinos legal in Brazil?

Online casinos in Brazil occupy a gray area legally. While land-based casinos have been banned since 1946, the regulation of online casinos is not explicit. Cross-border online operators can offer services to Brazilian citizens, although local companies face strict regulations. Recent legal changes indicate a shift towards potentially legalizing online sports betting, which may pave the way for broader online gambling legalization in the future.

Do you need a License to open a casino?

Yes, to open an online casino in Brazil, a license is required. Only local companies are eligible to apply for these licenses, meaning international operators must establish a local entity. The license fee is approximately €5.69 million, valid for three years, and operators must adhere to a tax rate of 18% on Gross Gaming Revenue. Bonus bets are prohibited under the current regulatory framework.

Which games are preferred in Brazil?

In Brazil, roulette and blackjack are the top casino games, with live dealer games also gaining popularity. Football dominates sports betting, with around 81% of bettors favoring it, followed by basketball and eSports. Additionally, lotteries and scratch cards are popular state-owned games of chance.