As Brazil's presidential election progresses to a second round, the implications for the licensed betting sector remain uncertain. The recent political turmoil has significant ramifications for online gambling, which was banned by President Luiz Inácio Lula da Silva through a provisional measure issued in late September.
Despite the regulated market's debut less than two years ago, growing public discontent and political opposition prompted Lula to impose an immediate ban. This measure is set to go before the National Congress, which will decide on its permanence.
Lula did not take the lead in the first round of voting; that distinction went to Flávio Bolsonaro of the Liberal Party, who received 47.03% of the votes compared to Lula's 45.16%. Since no candidate secured over 50% of the votes, a runoff election will occur on 25 October.
Ramiro Atucha, CEO of Atucha Strategic Advisory, expressed concerns that the runoff election might hinder the betting sector's efforts to overturn Lula's ban. Initiatives are already underway, as Brazil's major gambling trade organizations are calling on the Supreme Federal Court to nullify the ban.
“Public opinion on betting is strongly negative right now, and the evangelical vote carries a lot of weight for both candidates,” Atucha stated. “In that context, I can only imagine both of them doubling down against the regulated industry, especially online casino, between now and the runoff. Nobody wins votes defending bets in Brazil this month.”
A significant development from the election weekend was the Liberal Party's performance in securing 121 out of the 513 seats in the Chamber of Deputies, marking its largest bloc since 1990. Atucha believes this strengthened congressional presence could complicate the maintenance of the ban, as lawmakers may consider long-term legal and economic consequences.
“The people most exposed to that short-term, evangelical-driven pressure are the two presidential candidates,” he noted. “Congress operates with a longer perspective. A chamber where the PL has the largest bench since 1990, albeit not enough for a majority, is one that tends to respect signed agreements and is aware of the implications of lawsuits.”
Udo Seckelmann from Brazilian law firm Bichara e Motta Advogados pointed out that increased opposition to the ban does not guarantee congressional rejection. “The first-round results will shape the political environment, but the ban is subject to congressional review and judicial scrutiny. If opposition forces gain momentum, Congress may become more amenable to amending or rejecting the provisional measure.”
Discussions are no longer solely partisan but are increasingly focused on whether regulation is more effective than prohibition in safeguarding consumers and curbing illegal operations.
While a Bolsonaro victory may seem favorable for Brazil's gambling industry, it does not automatically equate to a return to the market as it existed before the ban. Bolsonaro criticized Lula's ban as "populist, hypocritical and politically motivated," but he has also previously promised to limit betting solely to sports wagering only.
“Atucha suggests that both candidates rely heavily on evangelical votes, which are generally against gambling. However, among the two, Bolsonaro may be more receptive to existing agreements. He stated, “I have no hope of things returning to normal under Lula. If Lula wins, further radicalization in the populist direction seems likely. The decision against the operators and sector will become harder, not easier. I am more optimistic about Bolsonaro, but external pressures complicate things.”
Seckelmann cautioned against assuming that a Bolsonaro win would guarantee a regulated market's revival, noting that any new administration would contend with various pressures.
“It is difficult to predict the policies of a future administration,” he said. “What is certain is that any new government must balance concerns about consumer protection with legal stability, investment, tax revenue, and the challenge of preventing an increase in offshore gambling.”
The election results could have lasting effects on Brazil's gambling sector. Any return to a regulated market raises questions about its stability and investors’ confidence in the future. Atucha observed, “The question is not if operators will want to return. They invested BRL30 million per license, built structures, and are currently laying off many employees. It is essential for them to resolve these issues quickly to recover their investments.”
“Rebuilding trust among international investors is far more complex and can take years. This issue extends beyond gaming,” he added.
Seckelmann echoed these concerns, highlighting that abrupt changes in regulatory frameworks could deter future investors from entering the market. “Operators can adapt to regulatory shifts, but sudden reversals of policy heighten perceived risks and could influence future investment choices.”
Bolsonaro has accused Lula’s ban of being a calculated electoral strategy, a sentiment many in the industry share. Atucha believes that the timing of the ban suggests it was a politically motivated decision with long-term ramifications, raising questions about tax revenue and job losses associated with the ban.
“This move ignored the tax collection already anticipated and previous agreements. It is purely populist and targeted towards the election cycle,” Atucha commented. “Lula's government was responsible for the regulated market’s establishment in January 2025, and now, less than two years later, it has opted to ban it. There is no coherent policy reason for this, aside from the election calendar.”
Atucha pointed out that should Bolsonaro win, reinstating regulated gambling might be less complicated compared to Lula. Since it was Lula’s administration that first approved the market, Bolsonaro could reinstate it without needing to reverse his own administration’s policies. He continued, “One advantage might be that it was not Bolsonaro’s government that approved and regulated this market, allowing him to restore it without ownership of the original decision.”
However, he warned that the damage could already be irreversible for certain operators, regardless of the election’s outcome. “For operators previously thriving before the ban, there remains an opportunity for a quick return. But for smaller operators that were struggling, they could reach a point of no return soon, and no government can reverse that.”
