Sao Paulo, July 10 (Xinhua) -- After Brazil suffered a shocking defeat to Norway in the round of 16 of the World Cup, a screenshot of a bet with 34 times odds, a bet of 3000 reals (about 4000 yuan), a bet of "Norway 2-1 Brazil", and a potential return of 102000 reals (about 130000 yuan) was spread on social media. For a few niche bettors, this is a high return; For more fans who bet on Brazil winning or advancing, it means losing their bet.

The explosive popularity of "Five Star Brazil" not only reflects the randomness of football matches, but also reflects the reality of the rapid rise of Brazil's gambling economy. With the expansion of online betting, the gambling industry is becoming a new growth point and fiscal tax source for Brazil's digital economy. However, the influx of a large number of gambling advertisements into World Cup live broadcasts, the increase in low-income groups participating in gambling, and the flow of social welfare funds to gambling platforms have also raised new concerns about household consumption, financial risks, and social governance.

The World Cup has become a traffic entry point for the gambling industry

The World Cup has always been the most widely watched sports event in Brazil, and the prominent change of this World Cup is that the viewing entrance is extending from traditional television to streaming media platforms.

Caz é TV, jointly operated by anchor Casimiro Miguel and sports media company LiveMode, broadcasts all 104 World Cup matches for free on YouTube, becoming one of the most influential sports communication platforms outside of traditional television.

Reuters reported that in the group stage match between Brazil and Japan, Caz é TV attracted over 21 million viewers simultaneously online, making it one of the most watched live streams on YouTube. At the same time, Brazil's Globe still covers about 86% of the World Cup audience. Although traditional TV still has advantages, the event traffic is accelerating to transfer to the Internet platform.

Compared with traditional television, streaming media not only provides match footage, but also integrates anchor interaction, real-time comments, social communication, short video slicing, and secondary creation, greatly enhancing the stickiness of young audiences. The World Cup is no longer just an act of watching matches, but has gradually evolved into a digital entertainment experience that integrates viewing, interaction, sharing, and consumption.

It is worth noting that LiveMode, the parent company of Caz é TV, has promoted this concept to Portugal. LiveMode is a YouTube channel, with famous football star Cristiano Ronaldo as one of its major shareholders. Caz é TV itself is not a gambling company, nor does it operate sports betting business. Its core business is still live streaming of events and production of sports content. However, during the live broadcast of the World Cup, a large number of gambling advertisements and betting platform promotions were implanted into the program content, blurring the boundaries between event live streaming, entertainment content, and gambling marketing.

The Associated Press reported that Caz é TV's World Cup live broadcast integrated a large amount of sports betting content, which has attracted increasing regulatory and public attention. The Brazilian National Consumer Secretariat (Senacon) has launched an investigation into the gambling promotion during the World Cup live broadcast, and the advertising self regulatory agency Conar has also initiated a review process on whether the anchor is suspected of inducing betting, whether the advertisement adequately alerts about gambling risks, and whether there are restrictions on minors.

For example, some advertisements directly link the World Cup with betting behavior, encouraging viewers to download gambling applications and participate in betting through Brazil's real-time payment system Pix. Pix instant payment is widely popular in Brazil, where viewers can watch matches, open gambling apps, complete recharge and betting in just a few seconds. The live broadcast of the World Cup has thus formed a commercial chain of "attracting traffic through live broadcasts of events, increasing stay time through interaction with hosts, completing traffic diversion through gambling advertisements, achieving instant payment through Pix, and completing transactions through betting platforms".

The scale of sports betting transactions in Brazil is expected to reach a historic high

The World Cup has always been the most active period for sports betting, but in Brazil, this effect is being further amplified by streaming media and mobile payments.

For platforms, free live streaming attracts a large number of users, and monetizing through advertising and commercial cooperation is a new business model. For advertisers, highly concentrated football traffic means higher marketing value. For gambling companies, it means lower customer acquisition costs and higher conversion efficiency.

The Associated Press cited data from financial technology company Klavi, stating that after the start of this World Cup, the proportion of Brazilian adults participating in sports betting rapidly increased from about 11% before the tournament to 35%. A large number of spectators who did not originally participate in sports betting registered on the betting platform for the first time during the World Cup; Existing gambling users have increased their betting frequency, expanding from traditional outcome betting to various gameplay such as goal scoring, corner kicks, yellow cards, and halftime scores.

At the same time, the scale of funds in the gambling market continues to expand. Brazilian Central Bank Governor Gabriel Gal í polo previously stated in Congress that the maximum monthly online gambling betting amount for Brazilian residents can reach 30 billion Brazilian reals (approximately 40 billion yuan), higher than the previous market estimate of about 20 billion Brazilian reals (approximately 30 billion yuan). The Brazilian Ministry of Finance believes that although most of the betting amount will eventually be returned to the winning players, on the basis of a large turnover, gambling companies can still generate considerable gambling revenue and drive growth in multiple industries such as advertising, media, and sports sponsorship.

The World Cup has further amplified this market. Reuters quoted gambling industry insiders as saying that due to the expansion of the World Cup to 48 teams and an increase in the number of matches to 104, as well as the fact that it is held in the Americas and matches are scheduled to be watched by Brazilians, this tournament is expected to drive the scale of sports betting transactions in Brazil to a historic high.

From the perspective of the industry chain, the World Cup has formed a complete commercial closed loop: FIFA sells game copyrights, and television stations and streaming platforms obtain traffic; Gambling companies acquire users through advertising sponsorship, anchor promotion, and event marketing; Instant payment tools such as Pix complete fund flow; The platform achieves profitability through betting revenue, advertising revenue, and brand cooperation. Gambling companies have also strengthened their brand influence through the World Cup, including Betano and other companies that have become official partners of FIFA. The vast majority of clubs in the Brazilian professional football league have also received sponsorship from gambling companies, and gambling capital is deeply integrated into the Brazilian football industry.

One of the important purposes of Brazil's promotion of the legalization of sports betting is to bring gambling activities that originally flowed overseas and were unregulated into the formal market, cultivate new digital economy industries through licensing systems, tax systems, and anti money laundering regulations, and increase fiscal revenue.

At the end of 2023, the Brazilian Congress passed the Fixed Odds Gaming Regulatory Act; Starting from 2025, gambling companies licensed by the Ministry of Finance will officially begin operations, ushering in a comprehensive regulatory era for sports betting in Brazil. The government hopes to transform the gambling craze brought about by the World Cup into a new source of fiscal revenue by regulating operations, levying gambling taxes, and strengthening fund supervision, while also reducing the survival space of illegal gambling platforms.

Preventing social risks has become a new issue for the Brazilian government

If the World Cup has led to explosive growth in Brazil's sports betting industry, then how to prevent the social risks brought by gambling has become a new issue that the Brazilian government has to face.

The national team matches have obvious "emotional betting" characteristics. A large number of Brazilian fans do not place bets based on probability analysis, but rather on emotional identification with the national team, choosing to bet on Brazil's victory, promotion, or including Brazil's victory in cross level betting. When Brazil is unexpectedly eliminated, the vast majority of bets will be lost, and the gambling company only needs to pay bonuses to a few bettors who bet on unpopular scores or the away team wins.

From the perspective of overall fund allocation, World Cup underdogs are often more advantageous to platforms rather than ordinary fans. Meanwhile, the expansion speed of the gambling market is significantly faster than regulatory capacity. With the influx of a large number of new users during the World Cup, gambling has gradually evolved from an entertainment consumption to an important variable that affects residents' consumption, household finances, and even the effectiveness of social policies.

The Brazilian central bank was the first to notice this change. Central Bank Governor Galileo previously stated in Congress that the central bank has begun to focus on the gambling industry. In addition to the harm of gambling itself, there has been a new abnormal relationship between residents' income, consumption, and savings.

The central bank governor said that according to traditional economic laws, when residents' income increases, consumption and savings usually grow synchronously. However, the central bank has found that in recent years, despite the improvement in residents' income, the growth of consumption and savings has not met expectations. A large amount of funds have flowed into online gambling platforms, and the scale is already sufficient to affect residents' consumption structure and financial stability. Therefore, the gambling problem no longer belongs to the scope of the sports industry, but has become a new area of macroeconomic policy attention.

What really triggered the high vigilance of the Lula government was the participation of low-income groups in gambling. In 2024, a study released by the Brazilian central bank showed that in August 2024 alone, about 5 million beneficiaries of "family subsidies" transferred approximately 3 billion Brazilian reals (about 4 billion yuan) to online gambling platforms through Pix, accounting for about one-fifth of the monthly "family subsidy" fiscal expenditure.

Family allowance "is one of the most important social security programs in Brazil, mainly aimed at low-income families, with the aim of ensuring basic living, promoting children's education, and improving public health. Part of the subsidy funds flowing to gambling platforms means that the policy effect of fiscal transfer payments may be weakened, and the lives of poor families may become more difficult, which also raises concerns from all sectors of society about the debt risk and gambling addiction of poor families.

Brazilian President Lula has repeatedly expressed concerns publicly. He said that the government cannot accept social welfare funds issued by the state entering the accounts of gambling enterprises, let alone allowing low-income families to improve their lives through gambling. If existing regulatory measures cannot effectively control gambling addiction and social risks, the government will consider adopting stricter restrictive measures, and may even consider re banning online sports betting. Lula emphasized that gambling companies should bear social responsibility, and the development of the industry cannot be based on the loss of interests of vulnerable groups.

In recent years, the Brazilian government has continuously strengthened regulation around this issue. On the payment side, the government prohibits gambling companies from accepting credit card payments to prevent consumers from using overdrawn funds for gambling; Gambling companies must establish legal entities in Brazil and accept financial, tax, and anti money laundering supervision. In terms of illegal platform governance, the Ministry of Finance, together with the People's Bank of China, the National Telecommunications Administration, and financial regulatory agencies, continues to carry out special rectification, cracking down on unlicensed operating platforms through website blocking, freezing fund chains, and other means.

In June 2026, Lula signed a presidential decree authorizing relevant departments to freeze funds from illegal gambling platforms and use some confiscated funds for public safety and other areas, further increasing the cost of illegal gambling operations.

At the same time, gambling advertisements during the World Cup have also become a regulatory focus. With streaming platforms such as Caz é TV quickly gathering young audiences through free live broadcasts, a large number of gambling advertisements have entered the live content of sports events. The Brazilian regulatory authorities believe that in a highly emotional scene like the World Cup, if the live broadcast of the event, interaction with the host, and promotion of gambling are deeply integrated, the audience, especially young people, are more likely to place bets under impulsive emotions. Therefore, it is necessary to further regulate the advertising dissemination methods.

At present, the focus of Brazil's gambling regulation has gradually shifted from "legality" to "how to regulate", and from "market access" to "risk management". Regulatory authorities not only focus on whether enterprises pay taxes in accordance with the law and operate with licenses, but also increasingly attach importance to issues such as gambling advertising dissemination methods, platform marketing behavior, payment channel management, and protection of addicted gamblers. It is not ruled out to further restrict the display of real-time odds during live events, strengthen the distinction between gambling advertisements and program content, improve self limiting betting mechanisms, and strengthen protection measures for low-income groups.

After the elimination of the national team from the knockout stage, the remaining issues for Brazil are not only how to maintain the glory of the football kingdom, but also how to define the boundary between commercial marketing and public interest while encouraging digital economic innovation and supporting the development of the sports industry, how to avoid the alienation of social welfare funds into gambling funds, and seek a balance between industrial development and social responsibility. The triple game of streaming media, capital, and regulation may continue to affect the development direction of Brazil's gambling industry and will also be an important test of Brazil's public governance capabilities in the digital economy era.

Editor: Ge Jiaming

(Author Xinhua Finance)