Overregulation Could Drive Bettors to the Black Market

Brazil’s regulated betting market took off in January—but uncertainty lingers.

Flutter Brazil CEO João Studart is sounding a warning. He says that excessive regulation—higher taxes, ad bans, bureaucracy—could backfire.

From my years covering gaming markets, I see his point: regulation must balance safety with viability. The wrong tilt could drive bettors into illegal platforms.

Read on—you’ll get my take on Brazil’s early market metrics, the regulatory tightrope ahead, and what operators must do to sustain growth.

Key Points

• Studart warns that overregulation could fuel black market migration of bettors.
• In the first half of regulation, licensed operators achieved BRL 17.4 billion GGR, producing BRL 3.8 billion in tax revenue.
• A proposed retroactive tax plan and ad restrictions were floated—but later withdrawn by Congress.
• An Instituto Locomotiva study cited by Studart showed 61% of bettors placed illegal bets in 2025.
• Flutter’s Brazil arm stems from its 56% purchase of NSX Group, merging with Betfair Brazil and placing Studart at the helm.

Flutter Brazil Chief Urges Regulators: Fine Line Between Protection and Overreach

Brazil’s journey with regulated gambling is only months old—and already it’s walking a tightrope. Since 1 January 2025, licensed operators have posted BRL 17.4 billion in GGR in just six months. That volume translated to BRL 3.8 billion in tax revenues for the state.

This rapid start drew regulatory proposals to tighten control: ad restrictions, retroactive taxation for ten years of unregulated activity, and bureaucratic compliance demands. But recent political pushback forced withdrawal of the retroactive tax.

Amid this whirlwind, João Studart—recently installed as CEO of Flutter Brazil—has urged regulators to proceed judiciously. His core warning: regulation that veers too far could paradoxically encourage players to seek greener pastures in unlicensed markets.

The Threat of Overregulation

Studart cites a telling statistic: 61% of Brazilian bettors had placed at least one illegal bet in 2025, per a study by Instituto Locomotiva. He contends that heavy taxes, stifling ad rules, and bureaucratic fronts will push players toward platforms that ignore consumer safeguards and evade taxation.

This isn’t speculative fear. In regulated markets globally, overburdened operators often end up passing costs to consumers or dropping margins—and when regulatory friction becomes too high, bettors defect.

Therefore, the challenge for Brazilian policymakers is clear: design regulation that supports player protection without killing market appeal.

Flutter’s Strategy and Role

To appreciate Studart’s voice, one must understand Flutter’s Brazilian roots. In May 2025, Flutter closed its deal to buy 56% of NSX Group (operator of the Betnacional brand) for ~US$350 million.

That merger brought together NSX and Flutter’s existing Betfair Brazil business under a new entity: Flutter Brazil. Studart, formerly NSX CEO, now leads this combined business.

In Q2, Flutter reported 144% growth in Brazilian revenue, reaching US$44 million. That made Brazil its fastest-growing market in that quarter.

This fast growth gives Studart credibility. He speaks not as an outsider—but as someone baked into the market’s rise and risk.

Where the Policy Tension Lies

The most dangerous juncture is when regulation is reactive rather than measured. Sudden tax hikes or blanket ad bans often appear attractive to legislators—but their effects ripple backward onto legal operators and forward into black markets.

Brazil’s initial regulation set a GGR tax of 12% for licensed operators. If operators are squeezed further through ad bans or surcharges, effective burdens may escalate beyond that.

Moreover, policymakers must resist temptation to revisit retroactive models. While those can promise quick revenue, they undermine investor confidence and fairness. Brazil’s Congress has already withdrawn one such plan after wide criticism.

My Analytical View

Honestly, Studart’s caution is more prescient than timid. Brazil’s regulated gambling environment is in its infancy. Overreach now could derail momentum.

I believe the next 12-18 months are critical. If regulation stays balanced—protecting players but preserving operational viability—the licensed market can consolidate and crowd out illegal competitors.

Operators should proactively engage with regulators. They must help co-design rules, pilot changes, and demonstrate impact. When the regulator feels challenged but informed, policy becomes partnership, not battle.

Localization is also crucial. Flutter Brazil emphasizes a team rooted in the country. Its brands, marketing, and user experience reflect local insight. That builds trust—and helps registers among Brazilian players.

Still, pressure will mount. Political cycles, public sentiment on gambling harm, and fiscal pressures could push regulation away from equilibrium. Vigilance, data grounding, and well-structured feedback loops will be essential for stability.

Flutter Brazil CEO João Studart’s call for caution is, in my view, deeply strategic. He advocates for regulation that protects—but doesn’t suffocate—the young Brazilian betting sector.

With BRL 17.4 billion GGR and BRL 3.8 billion tax revenue logged already, Brazil’s market is off to a strong start. Yet proposals for retroactive taxes and strict ad moves tested operators’ resolve—and prompted regulatory retreats.

Studart’s narrative warns against overcorrection. High taxes, regulations, or advertising bans might push bettors into unregulated arenas—exactly the opposite of intent.

In the balance between protection and opportunity lies Brazil’s regulated betting future. Now, more than ever, both operators and regulators must walk the line with vision, dialogue, and steady hand.

Tags: FlutterBrazil, RegulationRisk, BrazilGaming, Overregulation, BlackMarket, NSX_Betnacional

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