The challenges of compliance under Brazil's new regulations
The regulation of betting in Brazil has completely changed the landscape, and not only for operators, but for the entire market. In just a few years, the country has moved from a scenario where there were virtually no rules to one of the most closely observed markets in the world. But what does this mean for those operating within it? In Mariana Xavier’s view, Compliance Manager and DPO at VBET Brasil, the biggest challenge was not only implementing rules, but changing mindsets.
According to Xavier, the market grew too fast and, as a consequence, created habits that have proven to be difficult to correct. “For years, the focus was growth at any cost. Now, the logic has changed. We need to talk about sustainable growth,” she explains.
This is where the role of compliance comes in: not as a barrier, but as a strategic filter from the early stages of decision making. The problem is that many companies still operate with a “pre-regulation” mindset, which creates a constant clash between commercial ambition and responsibility.
The challenge of ‘tropicalisation’
One of the most interesting points of the conversation is when Xavier talks about something that has almost become a mantra in the sector: so-called tropicalisation.
International companies, especially those already operating in mature markets such as the United Kingdom, Germany, and the Netherlands, arrive in Brazil with ready-made models. However, Brazil does not work the same way, as the player profile is different.
In more established markets, users already naturally understand that betting is entertainment. In Brazil, this understanding is still developing, and many people still see it as a source of income, which completely changes the required approach. This difference in view requires more care, more education, and, above all, more robust tools for player protection. “Abroad, the player already comes with this awareness. Here, we need to build it together with them,” Xavier commented.
More rules, more friction, and more creativity
With regulation also came a significant increase in friction in the user journey. Processes such as KYC, identity verification and document submission have become part of the experience, and not every player likes it. Many find it complicated, others are suspicious, and some simply give up. This creates a new challenge for companies, which is the question of how to maintain a smooth experience within a highly regulated environment.
The answer, according to Xavier, lies in technology. Product and technology teams need to be creative to reduce this friction without breaching the rules. It is no longer just about UX; it is about UX within compliance.
Another critical point is marketing. Brazil has a unique culture – one which is diverse, intense, and highly connected. This opens up many opportunities, but also increases risk. Today, one of the biggest concerns is reputational risk. To what extent can a campaign be considered aggressive? Where is the line between engagement and excessive encouragement?
There is a real fear that the industry may be seen as responsible for addiction or indebtedness, even if this has not been conclusively proven. In addition, there are more technical risks, such as the use of platforms for money laundering, which explains the heavy investment in prevention and monitoring.
Not everyone will survive
With more than 500 operators in Brazil, the inevitable question is: will everyone remain in the market? The answer is no. The trend, according to Xavier, is consolidation. Smaller companies or those unable to invest in compliance, technology, and regulatory adaptation will probably not survive in the coming years. The market is becoming increasingly demanding and expensive.
Factors such as licensing, structure, processes, and relationships with the regulator all require significant investment, and this naturally favours those who are already better prepared. The logic of regulation is precisely to filter those who have the capacity to remain in the market and invest in player protection. Fewer companies, but more committed to rules, protection, and market sustainability.
Despite all the progress, it is still too early to call Brazil a mature market. There is still legal uncertainty, constant changes in regulation, and a lack of alignment even within the judiciary. Not to mention that the regulator itself is still evolving, which is natural in such an emergent market. Perhaps the most important point is the player. The maturity of the market depends on three pillars:
- A more consolidated regulator
- Better-prepared companies
- Better-informed players
The latter is still developing. The Brazilian player is still learning to deal with limits, control tools, and the idea that betting is entertainment, not income.
The future: less volume, more quality
At the end of the day, Brazil is not expected to lose momentum but rather to gain momentum. The number of bettors is likely to remain high, and the market should continue to grow. What will change is the profile of the companies that will remain.
Fewer opportunistic operators. More structured companies. Less improvisation. More governance. And, above all, a more balanced market between growth and responsibility.
As Xavier makes clear, the challenge now is not to grow fast, but to grow sustainably.
This article was originally published in Portuguese on 27 March 2026.
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