Brazil between expansion and fiscal pressure

The week that redefined iGaming’s trajectory

Over the past week, the Latin American betting industry entered what many executives privately describe as the first real stress test of Brazil’s regulated model.

There was no major announcement. Instead, something more significant happened: the simultaneous confirmation of scale — and the emergence of multiple risk vectors.

On one side, financial indicators already position Brazil among the largest regulated betting economies in the world.

On the other, fiscal and legislative discussions suggest the country may also evolve into one of the most expensive regulated environments to operate in.

But the pressure did not come only from politics.

Globally, the platform X (formerly Twitter) prohibited betting companies from using paid partnership posts with influencers and content creators, eliminating one of the industry’s main acquisition channels of recent years.

The rule blocks compensated promotions involving operators, affiliates and lotteries — even when labeled as advertising — and foresees content removal or account suspension in case of violation. Only direct paid media ads remain allowed.

In practice, operators will rely less on indirect social traffic and more on institutional media, branding and owned channels — a trend that coincides with the increase in regulatory costs observed in Brazil.

As a result, the market now faces a simultaneous double transition:
higher costs to operate locally and fewer shortcuts to acquire users globally.

In this context, BiS SiGMA South America shifts from an industry gathering into a strategic checkpoint — a space where the sector is no longer debating opportunity, but viability.

X restricts paid partnerships with gambling and changes acquisition dynamics in iGaming

The platform X (formerly Twitter) has updated its commercial policies and now prohibits betting companies from using paid partnership posts with influencers and content creators.

The rule blocks any compensated promotion involving operators, affiliates, lotteries or related services, regardless of whether the content is labeled as advertising.

According to the platform, paid partnerships include any form of financial compensation, commission via affiliate links, gifts, or commercial agreements between a brand and a creator.

In case of violation, content may be removed and the account may face temporary restrictions or suspension for repeat offenses.

The restriction, however, does not affect traditional ads purchased through X’s paid media system, which remain permitted under separate rules.

In practice, operators will need to shift acquisition strategies away from influencer-based promotion toward direct media or alternative channels.

The measure comes amid growing global pressure on digital gambling promotion and follows a broader movement seen across major platforms, which have been increasingly limiting the activity of affiliates and creators in the sector.

The real impact will depend on how consistently the rules are enforced — still untested at scale.

But the market already interprets the change as another step in the transition of iGaming toward more institutionalized marketing models and less reliance on indirect social traffic.

Scale confirmed: regulation measured what already existed

Across operator reports, investor briefings and supplier presentations, a single estimate dominated the week: roughly US$7 billion in GGR during the first year of the regulated market.

The relevance of this figure is structural rather than financial.
It resolves a decade-long uncertainty — Brazil was never a developing betting market, only an unmeasured one.

Regulation did not generate demand; it revealed it.

According to former Secretary of Prizes and Betting Regis Dudena, the framework allowed authorities to transition the sector “from invisible to monitored and taxed.”

In practical terms, the reform functioned less as market creation and more as economic formalization.

The consequences are immediate:

Local supplier ecosystems forming around operators, tier-1 international brands reallocating capital to Brazil as a core jurisdiction,  institutional investment replacing opportunistic entry compliance infrastructure becoming a permanent operational cost center

Strategically, Brazil has shifted category — from expansion territory to operational base.

International executives increasingly benchmark the country alongside Southern European markets such as Italy and Spain, not emerging jurisdictions.

Industry leaders also report accelerated professionalization of the ecosystem.

For Marlon Tseng, regulation effectively repositioned the country as a primary destination for global operators and B2B technology providers.

The second phase: sustainability risk

However, confirmation of scale has been followed by the emergence of a second variable — fiscal pressure.

Legislative and administrative discussions now point toward higher taxation and tighter operational constraints.

For operators, the risk is not entry cost, but long-term margin compression.

Industry associations warn the regulatory model could approach the threshold at which legal channel competitiveness declines against offshore supply — a pattern observed in multiple mature jurisdictions.

The market therefore enters a new phase: economic calibration.

The central question is no longer whether regulation works, but at what tax equilibrium it continues to work.

Executives increasingly frame the issue as a shift from regulatory approval to regulatory sustainability.

Market size will now depend less on demand and more on channelization efficiency after full fiscal implementation.

BiS SiGMA South America: the event became market infrastructure

The trade show scheduled for the first week of April (6–9) in São Paulo has taken on an unusual role for industry events.

BiS SiGMA South America has consolidated itself as the main meeting point for the Latin American iGaming sector, but its function has evolved: t is no longer just a conference and has become part of the operational infrastructure of Brazil’s regulated market.

The upcoming edition, from April 6 to 9 in São Paulo, is expected to bring together approximately 18,500 participants, more than 400 exhibitors, over 250 speakers and delegations from across the region.

In a country where regulation, operations and commercialization are being built simultaneously, the event acts as a practical environment to address licensing,

AML compliance, payments, advertising and user acquisition — issues that are no longer theoretical but required for day-to-day operations.

The decisive factor is not size but timing: companies arrive with concrete problems that must be solved immediately — adapting technology to regulatory requirements, recalibrating marketing under advertising restrictions and rebuilding margins under a new fiscal and compliance cost structure.

For that reason, the show operates as an “operational marketplace,” where KYC, platform, payments and certification contracts are effectively signed.

Rather than debating the future, the industry uses the meeting to adjust the present and make real operations viable within Brazil’s new regulated environment.

Compliance becomes a product, not a cost

One of the clearest shifts this week has been perceptual rather than legal.

Historically, operators treated compliance as a necessary burden. Now it has become a competitive differentiator.

The logic is straightforward:

The stricter the operational requirements, the greater the advantage for structured operators — and the smaller the space left for informal competition.

Operational priorities now center on:

• robust identity verification (KYC)
• transaction monitoring (AML)
• technical integration with local standards
• recurring audits

The economic effect is direct:  the market stops rewarding pure user acquisition and begins rewarding operational efficiency.

Regulatory technology, fraud prevention and payment infrastructure providers have moved from secondary suppliers to ecosystem protagonists.

Betting taxation reignites debate over sustainability of the regulated market

The discussion around betting in Brazil has entered a new phase.

If regulation brought legal predictability, tax policy has begun to introduce economic uncertainty.

A bill currently under discussion in the Chamber of Deputies — known as CIDE- Bets (Economic Intervention Contribution on Betting) reported by senator Alessandro Vieira — proposes a 15% levy on deposits made by bettors on digital platforms.

The proposal is part of the Anti-Organized Crime funding package and aims to raise approximately BRL 30 billion to finance enforcement actions, according to CNN Brasil.

The industry, however, believes the economic effect may be the opposite of what is intended.

A study by LCA Consultores estimates that the illegal market handles roughly BRL 38 billion — about 51% of the country’s total betting activity.

In practice, regulation completed its first year without significantly eliminating clandestine operations, and the creation of a new tax may once again shift the competitive balance.

Thy alters the product’s economics.

Expected impacts on the business model

Margins
Operators will have less room for bonuses and promotions.

Customer acquisition.
Acquisition costs tend to rise as the value proposition weakens.

Retention
Lower competitiveness against non-regulated international offers.

Structural risk
Users may migrate back to the informal market.

In practical terms, Brazil could simultaneously become the largest regulated market in Latin America — and one of the hardest to monetize.

The “Colombia effect”

Specialists point to the Colombian experience as a warning. The country adopted a similar taxation model with a 19% VAT applied to online betting, which reduced legal activity and strengthened illegal operators. The measure was later revoked.

The concern is that the same economic mechanism may occur in Brazil:
when the regulated product becomes too expensive, consumers do not stop betting — they simply change platforms.

The central dilemma: collect or formalize

The discussion has shifted from legal to economic. If the tax burden is moderate → the formal market absorbs the informal one.

• If it becomes excessive → the informal market grows again.

This balance will determine the success of Brazil’s regulated model.

The fact that the sector now debates demand elasticity, international competitiveness and cost structure already signals maturity:
the market is no longer discussing whether betting will exist — but whether it will be sustainable.

Regionalization becomes mandatory strategy

Another observable shift this week is the transformation of international expansion logic.

Operators no longer speak about “entering Latin America.”
They speak about operating country by country.

Brazil leads that transition.

Key adaptations underway:

• local payment methods
• culturally contextual marketing
• sports-specific product configuration
• institutional presence

This represents structural change:
the standardized global operating model no longer functions in the region.

Latin America is no longer treated as a block market — it is a collection of domestic markets.

Marketing: from volume to legitimacy

As regulatory oversight increases and acquisition costs rise, marketing strategy evolves.

Previously: growth through maximum exposure

Now: growth through social acceptance

Operators increasingly prioritize:

• cultural storytelling
• strategic sponsorships
• responsible communication
• institutional reputation

The objective shifts from acquiring customers to justifying industry presence.

This transition typically marks markets entering the post-legalization phase.

Investor behavior changes

Brazil’s mixed signals have not discouraged investment — they have refined it.

Speculative capital tends to retreat.
Strategic capital tends to expand.

Investors now favor:

• compliance-resilient operators
• infrastructure providers
• antifraud technology
• payment solutions

In other words: less betting on explosive growth, more betting on operational sustainability.

The Latin American context

Brazil’s developments are not local — they are regional indicators.

Neighboring jurisdictions observe the country as proof of three realities:

1. achievable economic scale
2. real operational complexity
3. inevitable political pressure

Brazil has effectively become Latin America’s regulatory laboratory.

If successful → regional regulation accelerates
If unsuccessful → continental expansion slows

Conclusion: the industry enters adulthood

For years, Latin American iGaming operated on projections.
Now it operates on consequences.

Growth has materialized.
Taxation has begun.
Conflict has emerged.

The sector is no longer trying to prove its existence — it is trying to prove its sustainability.

BiS SiGMA will likely represent the first major operational adjustment moment of Brazil’s regulated era.

It will not be a conference about opportunity.
It will be a conference about equilibrium.

Between expansion and sustainability.
also taxation and competitiveness.
and politics and economics.

And the way this equation resolves will define not only Brazil’s future — but the pace of the entire Latin American betting industry.