SBC News Bayes Esports: navigating the Brazilian esports market amid regulatory change

Bayes Esports: navigating the Brazilian esports market amid regulatory change

Zeeshan Khan, Senior Sales Manager at Bayes Esports, assesses the amplified impact that esports could have across Brazil as the country’s gambling ecosystem witnesses considerable change.

The sports betting landscape in Brazil is experiencing a transformative era, thanks to the recent legalisation of sports betting. This pivotal regulatory change has laid the foundation for a well-structured and closely monitored betting environment, designed to prioritise consumer protection, uphold the integrity of sports, and boost economic growth through taxation and job creation.

With these regulations in place, we now have a safer and more equitable betting arena that encourages innovation and healthy competition among operators. This shift is not just a win for the industry but also for consumers, who can enjoy a more transparent and secure betting experience.

A deeper look Into the regulatory update

Brazil’s recent sports betting regulations mark a significant turning point, as the country steps into a new era with federal oversight of the industry. President Luiz Inácio Lula da Silva signed Bill PL3626/23 commonly referred to as the Betting Bill of Law, setting the stage for a well-regulated market projected to generate over R$10bn ($2.06bn) annually for public sectors such as sports, tourism, and education.

For companies looking to operate in Brazil, the cost of entry includes a R$30m fee for a five-year license, which allows them to run up to three betting brands. Additionally, businesses must adhere to local incorporation rules and appoint a legal representative within the country.

The Senate’s Economic Affairs Commission (CAE) has outlined that licensed operators will face a 12% tax on their gross gaming revenue, while player winnings will be taxed at 15%. 

In 2023, Brazil’s sports betting market saw a remarkable $21bn in transactions, marking a 71% increase from the early pandemic years of 2020. The newly implemented regulations aim to enhance security and transparency, with measures like facial recognition for bettors, dedicated bank accounts for transactions, and robust cybersecurity protections.

January 2025, all legal betting sites will be hosted on the government-authorised domain, bet.br, further shaping the industry landscape.

With the Ministry of Finance leading oversight efforts, the new framework is designed to boost consumer confidence and attract both domestic and international operators, solidifying Brazil’s position as a key player in the global sports betting scene.

Impact of regulatory changes on companies

On October 1, 2024, the Economy Ministry prevented more than 2,000 betting companies from operating in Brazil for having failed to provide all the required documents. Introducing a regulated betting market in Brazil has had multifaceted effects on companies operating within the sector.

Establishing clear legal guidelines has provided a foundation for trust and reliability, attracting substantial investment from local and international stakeholders. Companies now operate with enhanced confidence, knowing that their activities are legally sanctioned and that there is a robust system in place to resolve disputes and ensure fair play.

Regulatory compliance has compelled companies to elevate their operational standards, focusing on delivering superior user experiences, maintaining transparency in their odds-making processes, and implementing stringent anti-fraud measures.

The competitive landscape has also spurred technological advancements, as companies strive to differentiate themselves through innovative offerings, such as personalised betting options and real-time analytics.

The regulation has encouraged a surge in market participation. As of writing this article, 14 companies successfully obtained licenses to operate, while an additional 52 companies have received provisional licenses, meaning they must correct certain issues before launching.

Esports is a growing phenomenon in the country

Esports has quickly become a pivotal part of Brazil’s sports betting landscape, reflecting the country’s growing enthusiasm for competitive gaming. The Brazilian esports community is flourishing, with the number of active players and fans on the rise. By 2023, Brazil was home to almost 25 million esports users, and this figure is expected to surpass 33 million by 2028.

As of 2023, Brazil also ranked as the fifth-largest esports market in the world, with 282,233 active players, highlighting the nation’s significant role in the global esports arena.

SBC News Bayes Esports: navigating the Brazilian esports market amid regulatory change
Image Source – Statista

With 36.5% of Brazil’s population falling within the 18-40 age range and the country’s median age at 34.4 years (source), this demographic presents a significant opportunity for operators within the rapidly expanding esports sector.

This age group, fully immersed in digital culture and gaming, is particularly receptive to esports betting platforms. By engaging this audience, companies can not only drive customer acquisition but also build lasting brand loyalty.

Esports offers an ideal entry point, introducing younger bettors to the world of traditional sports betting. This approach ensures ongoing interest and participation, positioning betting brands for long-term success as this tech-savvy generation continues to evolve.

Notably, the IEM Rio 2024 event, held in Brazil and was exclusively covered by Bayes Esports, achieved a peak viewership of 709,317, marking a substantial increase from the previous year.

Esports betting in Brazil

A key highlight of Brazil’s evolving betting landscape is its focus on esports. The government is currently defining the list of eligible sports and competitions for betting, with esports expected to take center stage. 

Esports betting offers unique advantages, including a higher frequency of events and the digital-native nature of its audience. This aligns perfectly with online betting platforms. The growing influence of esports in Brazil is indicative of a broader trend in South America, where the convergence of gaming and betting is poised to reshape the entertainment landscape.

But let’s take a look at the esports market from a numbers perspective. In Brazil, the esports market is on a significant upward trajectory, with revenue projected to hit US$116.0m in 2025. The sector is expected to grow at an annual rate (CAGR 2025-2029) of 5.32%, leading to a market volume of US$142.7m by 2029. 

Notably, esports betting stands out as the largest segment, forecasted to reach a market volume of US$96.1m in 2025. By 2029, the number of esports users in Brazil is expected to reach 35 million, with user penetration rising from 13.6% in 2025 to 15.7% by 2029.

Additionally, the average revenue per user in Brazil is projected to be US$3.90. This burgeoning market is fueled by growing investments and an expanding fanbase, underscoring the rising popularity of competitive gaming across the nation. 

SBC News Bayes Esports: navigating the Brazilian esports market amid regulatory change
Esports stats – (Source : Stats)

Build a leading esports betting product

For sportsbooks and operators entering the Brazilian market, understanding the segmentation is essential. What makes an esports title popular, and what tools will help you consistently attract and engage an audience?

Esports in Brazil, particularly titles like Counter-Strike 2, have cultivated a massive and dedicated fan base. Top-tier teams such as FURIA Esports and MIBR in CS2, paiN Gaming in League of Legends, and Team Gullit in EA FC, consistently represent Brazil on the international stage.

Beyond PC games, mobile titles like PUBG Mobile and Free Fire are gaining immense traction, with teams like Alpha7 Esports in PUBG Mobile and LOUD in Free Fire achieving notable success. 

These games already have massive fan bases and regularly feature in global esports events, making them prime candidates for betting action. Sportsbooks can expect 12 months of jam-packed content with almost no downtime. 

Partnering with a data provider like Bayes Esports offers access to granular, fast data for the majority of premium esports tournaments. Additionally, having a partner ensures that fixture changes, metadata updates, or newly emerging content are seamlessly managed.

With the government imposing these new regulations, it brings esports a step closer to achieving mainstream recognition. This requires the operators and products being built to conform to white market practices.

One way to do so is through the use of official data. Operating with legally licensed data protects the IP of the tournament organisers, boosting the reliability and credibility of your business, as well as the entire industry.

Time to tap into a growing market

This thriving esports ecosystem is driven by both macro and microeconomic developments in the country, where increasing digital connectivity and affordability of mobile devices have expanded gaming access.

Brazilian fans, known worldwide for their unwavering support of traditional sports like football, bring the same fervor to esports, creating a vibrant and engaged community.

For betting operators, this presents a lucrative opportunity to tap into a growing market with a passionate audience, eager to engage in both esports and traditional sports betting.

The synergy between Brazil’s economic growth and the expanding esports landscape positions the country as a burgeoning hub for competitive gaming and betting alike. 

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