New research suggests Brazil market to be worth half previous estimates

A study commissioned by the Brazilian Institute of Responsible Gaming (IBJR) – which includes the likes of bet365, Flutter and Entain – has suggested that current methods for estimating the size of Brazil’s betting market have led to overinflated figures.  

The research, conducted by Brazil-based LCA Consultoria Econômica, argues that current models look only at the value of bets placed to determine market size and are therefore missing key contextual factors.  

It said factors such as player winnings, money left in a player’s account, operator costs and taxes need to be included in calculations to give a more accurate representation of how much money is being spent on betting in the South American country.  

Figures highlighted showed that the Central Bank of Brazil estimated the net spend in the gambling market to be BRL34.9bn (£4.8bn).  

Projections from Brazilian financial service firm Itaú pitched the market to be worth BRL23.9bn, JP Morgan had an estimate of BRL24.5bn and H2 Gambling Capital valued the market at BRL26.5bn. 

After applying the IBJR’s estimated 7% margin on betting turnover, the trade group suggested the net spend in Brazil’s betting market to be closer to BRL16.3bn.  

The report also showed between 0.1% and 0.3% of Brazil’s GDP for the last four quarters was spent on gambling, and an estimated 0.2%-0.5% of total household income.  

This compared favourably to estimates of what families spent on other forms of entertainment, which ranged between 7.3% and 15.7% of household income. 

An IBJR statement said: “With clear and well-founded information about how the sector really works, the survey reinforces the importance of well-structured regulation that protects consumers and ensures the sustainable development of the sector.” 

IBJR also highlighted the lack of correlation between household debt and betting expenditure.  

It continued: “Even though it is growing in the country, sports betting has a modest impact on the financial health of families.  

“According to the study, spending on games represents between 0.2% and 0.5% of total household consumption, and between 0.1% and 0.3% of Brazilian GDP.

“It is important to note that, in the same period, there was no evidence that there was a relevant change in household indebtedness due to participation in games and betting.

“Even so, the sector continues to grow, offering more entertainment options and fostering the economy without significantly compromising family income.” 

Earlier this week, Brazil’s Ministry of Finance released its definitive list of 89 approved operators that can continue offering betting services during the transition period.

The ministry confirmed it received 113 licence applications from operators in preparation for Brazil’s regulated betting and gaming market going live in January 2025.