Brazil's online gambling market is undergoing profound reshaping. After the regulated iGaming framework officially takes effect in early 2025, cryptocurrency gambling, previously a "gray area" trend, will be explicitly prohibited.
While this ban closes the door on crypto payments, it also highlights the Brazilian government's determination in transparency and market integrity. For operators and players alike, this shift is both a constraint and an opportunity.
The Current State of Crypto Gambling in Brazil: Included in Legal Red Lines
According to Normative Decree No. 615, starting from January 1, 2025, operators are not allowed to accept cryptocurrencies as a payment method, with legal transactions limited to electronic transfers. This means that the past modes of deposits and withdrawals completed with digital assets like Bitcoin, USDT, etc., are completely invalidated.
The government emphasizes that this move aims to establish a safer, more controllable gambling environment. As expert Dmitry Starostin points out, although blockchain transactions are traceable, they lack regulatory strength compared to statutory payments. The prohibition of cryptocurrencies is seen as part of a broader effort to combat black market gambling and illegal capital flows.
The Actual Impact of Cryptocurrencies on the Brazilian Gambling Market
Before the ban, cryptocurrencies had become an important payment method for Brazilian offshore gambling sites. This was due to their support for peer-to-peer (P2P) transactions, bypassing government verification; coupled with Brazil's high digital penetration rate and the lack of a regulated framework at the time, this promoted the expansion of crypto gambling.
However, the market size is far less than imagined. Ed Birkin from H2 Gambling Capital revealed in the podcast "Straight to the Source" that cryptocurrencies account for only 0.7% of the Brazilian gambling market. In other words, even though crypto gambling has a large presence in public discourse, its actual transaction volume is marginal.
The Dual Effects of Regulatory Shift
The Brazilian government's firm stance sends a clear signal: the future market will prioritize localization, transparency, and strict compliance measures. Licensed operators are increasing KYC reviews and tracking of funds, trying to use compliance advantages to attract players to stay in the legal market.
However, the ban also brings hidden worries. Some industry insiders worry that players might turn back to offshore platforms that accept cryptocurrencies, thereby weakening the regulatory effect of the local market. This "reverse outflow" risk is one of the most concerning issues following the implementation of the ban.
Global Perspective: Will Brazil Set a Precedent?
It is worth noting that Brazil's approach is not a microcosm of a global trend. Birkin estimated in the same podcast that the actual size of global crypto gambling is about $3.5 billion, far below the often-cited $81.4 billion. In other words, crypto gambling is still a marginal market globally, and Brazil's "comprehensive prohibition" may not be replicated by other countries.
Conclusion
The ban on cryptocurrency gambling in Brazil marks an important watershed from gray to regulated in the country's gambling industry. Although crypto gambling has a limited share in the local market, the policy direction releases the regulatory authorities' intent: to reshape the industry landscape with higher transparency and strict payment control. Whether a balance can be found between preventing capital outflow and attracting players to stay in the legal market will determine the success or failure of this regulatory transformation.
