Industry leaders and stakeholders are confident that regulated crypto betting is on the horizon in Brazil, with some seeing this as almost inevitable.
Brazil launched a nationwide regulated betting market on 1 January 2025, transitioning the country away from an unregulated grey market to a fully fledged legal operation with licensed companies.
This of course came with various regulations including a requirement for companies to accept only payments via Pix, the Central Bank of Brazil’s instant payments system, excluding cash, credit cards and crypto.
For betting companies with a lot of crossover customers in crypto, like Stake, this was a bit of a blow. Thomas Carvelhess, the firm’s Country Manager for Brazil, shared at the Payment Expert Summit in Rio de Janeiro this week that “the impact we suffered in losses was 20%, which was very relevant’.
“Most of the bettors that use crypto are VIPs,” he continued. “This is another concern we’re having and we’re getting prepared for the next climb.
“I hope that we can work with this consolidation continuing to happen, with more awareness of the population, with more financial education, with a more mature market based on responsible gaming – all that will leave us in a better situation.”
Brazil has some of the highest rates of crypto ownership in the world, with adoption rising every year. Some studies have put the number of Brazilians owning a crypto asset, or at least some other form of digital token, at around a quarter of the adult population.
Meanwhile, the country’s betting sector is projected to become one of the biggest in the world. H2 Gambling Capital, an industry intelligence and data company, estimates that the sector could generate a turnover of US$34bn, R$197.3bn in local currency, by 2028.
The Central Bank has also been eyeing up crypto regulation for some time. Late last year, it launched consultations on regulations around virtual asset service providers while a CBDC, a digital version of the real christened the Drex, is also under development.
‘This is something that will happen naturally’
Though the scene may seem to have been set for Brazil to become the world’s leading and biggest crypto gaming space, regulators like Brazil’s Secretariat of Prizes and Bets (SPA) have been cautious – and justifiably so. Crypto and gaming are, respectively, high risk sectors, there is no doubt of this.
Concerns around responsibility and problem gambling are constant in the betting space, and the inclusion of crypto, itself a highly volatile sector subject to hugely varying market value depending on business, political or economic developments, would amplify concerns. On top of this, cases of fraud and money laundering have dogged crypto since its inception back in the 2000s.
“Cryptocurrencies are not used for transactions, at least that’s how our legal structure sees them,” said Udo Seckelmann, Head of the Department of Gambling and Crypto at Bichara & Motta, a Rio de Janeiro law practice, who shared a stage with Stake’s Carvalhaes.
“At the same time, I see that the SPA was right when they did not accept crypto for bets because it’s still not regulated, but soon the regulation process begins under the umbrella of the Central Bank.”
Seckelmann added that ‘maybe in the next one or two years’ Brazil will see the first licences and authorisations for crypto institutions, and with this, the market could ‘begin accepting crypto for bets’.
Carvelhess and Seckelmann are not alone in their belief that crypto betting will one day come to Brazil. A similar sentiment was echoed by companies like paytechs Pay4Fun and Gamersbank on a panel earlier in the day.
“The SPA will review cryptocurrencies, it has everything ready to go,” Leonardo Baptista, CEO of São Paulo-based Pay4Fun, remarked. “This is something that will happen naturally.”
Not everyone is quite convinced that accepting crypto bets would be the right course of action for Brazil, however. The aforementioned concerns about money laundering, fraud and general market volatility remain consistent.
“It’s important to stress that cryptocurrencies are assets, they are not payment means and they cannot fit the definition of fiat currency,” said Luiz Felipe Maia, a Partner at São Paulo law firm Maia Yoshiyasu Advogados, who spoke alongside Carvelhess and Seckelmann.
The changing value of cryptocurrency may also make taxation difficult, with regard to betting revenue and winnings, Maia believes. Using Bitcoin as a case point, he questioned whether taxation would be based on the coin’s value when a bet is placed, or when the money is used and deposited.
“No country around the world has managed that and they never will”
Given that crypto is a notoriously volatile sector and the price of coins can fluctuate wildly between the morning and the afternoon depending on what policy US President Donald Trump may have announced, for example, this could raise a tricky question for regulators.
“The other issue with crypto is people don’t have the origin for the money,” he continued. “These people, the more you accept their bets in crypto, they will not migrate into the regulated market.
“No country around the world has managed that and they never will, and that is because there are some people who do not want to make transactions in the financial system.”
Crypto and betting are both big businesses, and as each grows the interconnection between the two will inevitably grow too. It is also hard to deny that people who pursue monetary gains through speculation on crypto may also enjoy participating in gaming.
Finding some clarity in these blurred regulatory lines will be a challenge for regulators, not least in Brazil with its young betting sector.
Companies too must play their part, and from the conversations at the SBC Summit Rio it seems private actors are more than prepared to do so – but the collaboration required between politicians and legislators, lawyers and regulars, financial organisations and bookmakers, could be a serious undertaking
