The Attorney General's Office of Brazil (AGU) has urged the Supreme Federal Court (STF) to dismiss preliminary injunctions related to the Direct Actions of Unconstitutionality (ADIs) under consideration by Justice Luiz Fux, thereby maintaining the existing prohibition on betting. This request follows a provisional measure introduced by President Lula in late September.
The AGU has emphasized the necessity of hearing the prosecutor general within 72 hours before Fux makes a decision regarding the industry's appeals to lift the betting ban. This response comes in light of a lawsuit filed by the National Association of Games and Lotteries (ANJL) and the Brazilian Institute for Responsible Gaming (IBJR), who seek to overturn the ban imposed on betting.
The AGU criticized the existing legislation on betting, labeling it "extensively flawed" due to its failure to adequately protect minors and prevent money laundering as well as the financing of crime. However, the AGU did not consider the sector's efforts to mitigate such issues, pointing instead to illegal betting websites that do not comply with regulatory standards.
In addition to requesting the rejection of the provisional measure, the AGU has also called for a new public hearing to refresh discussions that were last held in November 2024. This timing is notable, as the ban on betting took effect just over one week prior to Brazil's presidential election, drawing criticism that it was a politically motivated maneuver. The push for another hearing is likely to intensify this narrative, prompting questions about President Lula's decision to swiftly implement the ban.
The AGU's insistence on hearing from the attorney general and scheduling a public hearing leaves the industry in a state of paralysis, which has implications for revenue generation and tax income for the government. Notably, the decision by Fux regarding the fate of the betting industry could be postponed until after the second round of elections, set for October 25, where Lula and Liberal Party leader Flávio Bolsonaro advanced to a runoff.
In its request, the AGU has included calls to preserve the operations of authorized companies or extend the transition period of the ban by at least six months. Meanwhile, the ANJL and IBJR argue that the disruption caused by the ban threatens legal certainty and may push bettors toward illegal markets.
The AGU contested claims that the provisional measure lacked urgency and that the government overlooked economic ramifications. The agency stated that the decision was founded on governmental insights regarding regulation impacts on household debt and health, which are arguments presented by the federal government and not necessarily conclusions endorsed by the STF.
Organizations have warned that the ban could undermine revenue collection vital for public policies. The AGU acknowledged that the government considered the loss of revenue anticipated with the ban.
The AGU further dismissed concerns that the ban would drive bettors to underground websites, noting that since the enactment of the provisional measure, 10,435 illegal websites had been blocked, and more than 3,000 profiles and channels had been requested for removal. However, the agency did not address the emergence of numerous other illegal websites that appeared post-ban, stating instead that the 18,195 sites identified by the ANJL were not necessarily established following the ban's implementation.
Regarding accusations of infringing on free enterprise and creating legal uncertainty, the AGU affirmed that operations are managed through authorizations issued based on the Ministry of Finance's discretion and will remain subject to review at any time.
