After years of anticipation, the gambling industry has finally set its sights on Brazil, a burgeoning regulated market, attempting to seize this highly anticipated major opportunity.
However, as Steven Valentine, Chief Commercial Officer at Comtrade Gaming, stated, if one hopes to maximize profits in Latin America's largest economy, it is essential to strategize in advance and address key barriers.
Brazil is moving towards becoming a regulated gambling powerhouse, opening the doors to this exciting new market for global operators and unleashing unprecedented development potential.
In fact, even before the official launch of online gambling regulation on January 1, 2025, Brazil's "grey market" was already estimated to be worth $3.4 billion (approximately £2.6 billion/€3 billion).
It is predicted that by next year, Brazil will have about 39 million active online gambling and gaming accounts; with a penetration rate that is quite significant among the country's 150 million adult population. By 2029, the total revenue of its online gambling market is expected to soar to $10 billion.
This also explains why gambling legislation in Brazil has attracted such intense global attention, seemingly marking the beginning of a new era.
However, in this rapidly growing, newly regulated market, both operators and technology providers are well aware of the coexistence of opportunities and risks. Previous expansion experiences in the US market serve as a cautionary tale—many gambling and gaming enterprises invested heavily only to see minimal returns, and industry players generally hope to avoid repeating these mistakes.
Rooting Strategy Comtrade Gaming, established nearly 25 years ago, focuses on providing customized technology solutions for complex markets and has now also made its mark in Brazil.
This Slovenia-based online and physical gambling technology supplier has been certified in Brazil since early 2025 and had signed contracts with two clients by mid-year, successfully establishing an initial market base.
This is just the beginning. Last year, Comtrade took its first step in developing its own gaming products and is expected to gain more certifications soon to expand its growing content library to serve the Brazilian market.
Valentine noted, "Brazil is an extremely attractive market, quite different from the situation in the US. Initially, everyone was optimistic about the US, but it turned out to be a mirage."
"The US market has high investment and few opportunities, while Brazil is the opposite, making it more potential for service providers like us."
Five Major Challenges in the Brazilian Market
Localization of Talent Valentine believes that any business hoping to succeed in Brazil must first address the issue of local talent recruitment.
Since less than 5% of Brazilians speak English, having employees who speak Portuguese (preferably locals) is crucial.
"We have already recruited several local employees in Brazil, including project managers and client managers, and plan to continue expanding our team size. This allows us to truly understand the needs of our clients."
Product and Process Localization Furthermore, Valentine emphasizes that to make a name in the Brazilian market, offering products that meet local needs is key to success.
"Operators should simplify user processes as much as possible," he said.
"You need to deeply understand the local payment systems and gambling preferences, as well as Brazil's unique KYC (Know Your Customer) authentication processes."
Market Education and Brand Building As an international service provider with no strong brand recognition in Brazil, Comtrade also realizes the need for missionary-style educational promotion.
"Our brand is not well-known in Brazil, so we need to take the initiative to let the market know who we are and how we differ from existing service providers."
"Many local operators in Brazil are accustomed to completing projects quickly and at low cost. We need to help them recognize that, although the migration period or cost might be slightly higher, they will gain longer-term benefits through more mature technology and service quality."
Regulatory Costs and Process Complexity Although online gambling regulation in Brazil has just begun in early 2025, the industry is widely expected to be a significant year for integration.
Many companies are still trying to understand the details of the current regulatory terms, and Comtrade has already felt the difficulty of adapting its technology.
"We release a platform update for our clients every three weeks," Valentine pointed out, "but in Brazil, each major update requires re-certification, a process that is both expensive and complex."
He described Brazilian regulation as "a gold-panning funnel" because of the high initial license fees, many companies have been forced to shelve their market plans.
"In the coming year, you will see more local suppliers either exit or merge to share costs; meanwhile, a large influx of new European players is expected by 2026."
"There may also be a wave of mergers and acquisitions, as some companies hope to quickly capture market share through acquisitions."
Intensified Market Competition The final challenge is the competition itself. Faced with many local and international suppliers already active in the market, new entrants must clearly define their advantages.
"A few years ago, the number of mainstream platform providers worldwide could be counted on one hand, but now I can't even name half of them, with new platforms launching every month."
In such a market, differentiation becomes a challenge, especially when almost everyone is offering seemingly similar products, standing out is crucial.
"Price wars have increased the market's bargaining power over suppliers, but we hope to be favored by providing stable and reliable services."
Future Outlook: Brazil Could Become the World's Largest Single Gambling Market For Comtrade and those who are truly serious about the Brazilian market, if they can successfully address the challenges mentioned above, the future growth prospects remain very enticing.
However, Valentine cautions that in the coming years, the entire gambling industry may face a "survival of the fittest" situation.
"Nowadays, startups find it difficult to achieve a quick exit through short-term operations; either you make a profit, or you might be eliminated by the market."
Fortunately, he is confident about the diversification of the Brazilian market, believing that it will not be dominated by a few giants like in the US.
"In the US, it's hard for newcomers to enter; but I think Brazil is different."
With Brazilians' passion for football and other sports, sports betting remains a market focus. However, Valentine predicts that as the market matures, casino products will experience rapid growth.
"I believe that as players gradually become familiar with more complex gambling products, the market will also expand and develop in a more mature direction."
"I think Brazil has the potential to become the world's largest single gambling market, and we are very confident about its future."
