Just months after the Brazilian government took a historic step by signing into law regulations that will soon govern sports betting and online gaming across the country, a “staggering” 113 companies have applied for a licence in the country.

On the latest episode of iGaming Daily, supported by Optimove, James Ross, SBC’s Multimedia Editor, was joined by Isadora Marcante, Senior Journalist at SBC Noticias Brasil, to explore why companies are eager to stake their claim in Brazil and what challenges lie ahead for regulators and operators.

The opening of the Brazilian market has been eagerly anticipated by many, and Isadora explained that Statista Market Insights suggests that it could generate revenue in the region of €1.5bn.

When plans for the regulated market first emerged, legislators expected around 40 companies to apply for a licence, therefore, concerns have been raised regarding the ability of the government to consider all 113 applications ahead of the expected opening of the market at the beginning of 2025.

Isadora said: “If they review every application the way they’re supposed to, they won’t be able to. But if they do review all 113 that applied, I don’t think they will have done everything they had to do to check every single requirement because it’s a lot of information.

“The application deadline ended on 20 August and [ministers] have 150 days to review all the deadlines. I’m not sure they have enough personnel systems to be able to review 113 licences, so I don’t think they will have enough time.”

One of the laws signed into law by President Lula is that players will be taxed on any winning bets. Initially, the Brazilian government wanted to tax winnings at 30% but that number has since been reduced to 15%.

On the tax rate, Isadora said: “This is the most concerning thing from the law because it could increase the power of the parallel market. If you win so little and have to pay 15% on top of it, it might lead players to the illegal market.”

James added that the number of applicants for the market suggests that “the potential rewards far outweigh the risks” in the eyes of operators regarding the tax. 

He concluded: “Brazil is on the brink of a major transformation in the gambling sector.

“It’s got a robust regulatory framework, it’s got a flood of eager applicants and it has the potential to be one of the largest markets in the world. No matter how they deal with the applications flooding through, the future does look bright for Brazil’s gambling sector.”