Fresh data in Brazil has shed further light on the unregulated online gambling market and consumer interactions with illegal brands.
A survey by Instituto Locomotiva of 2,000 people found that 61 per cent of bettors had used illegal platforms and that 78 per cent found it difficult to say which platforms are regulated and which are not.
Seventy-two per cent said they cannot always verify whether the operators they play with are regulated, while 46 per cent have deposited funds with operators they later found out were unregulated.
A separate study, titled Off the Radar – Sizing and Socioeconomic Impacts of the Illegal Betting Market in Brazil, carried out by LCA Consultores, found that the illegal market accounts for between 41 per cent and 51 per cent of the market.
The LCA study also found that the illegal market is worth between BRL26bn (£3.46bn) and BRL40bn (£5.3bn) in annual revenue and accounts for up to BRL10.8bn (£1.4bn) in uncollected tax revenue.
Reducing the size of the illegal market in Brazil by five percentage points would equate to added revenue of between BRL870m (£115.8m) and BRL1.1bn (£146.4m), the study said.
“Together, these unprecedented studies clearly reveal the scale and the fiscal and social impacts of the underground betting market in the country,” said Fernando Vieira, executive president of the Brazilian Institute of Responsible Gambling (IBJR).
“As executive president of IBJR, I have reiterated over the past months that the progress in regulation has yet to translate into tangible benefits.
“This is due to a clear factor: a large share of betting still takes place outside the boundaries of the law.
“The data presented today lay this reality bare and reinforce the warning that the sector has long raised: without effective and continuous enforcement, regulation will remain only on paper. It is urgent to ensure compliance with the new legislation so that Brazil can truly reap the social and economic rewards it promises.”
The publication of the two studies comes amid the backdrop of criticism by the IBJR and its fellow gambling trade associations about a six per cent rise in the Brazilian tax rate on the sector.
The IBJR said that the rise in the gambling tax rate from 12 per cent to 18 per cent will mean illegal brands would account for at least 60 per cent of Brazil’s betting activity.
“Our focus must be on the real issue. While public debate centres around topics like increased taxation and advertising restrictions, the illegal market continues to operate freely, undermining the effectiveness of the new regulatory framework,” Vieira said on LinkedIn.
“Fighting illegality must be at the heart of the agenda. It is essential that there be coordinated action among authorities, licensed operators, and civil society to confront and dismantle this parallel market.”
