On September 25, President Luiz Inácio Lula da Silva of Brazil enacted a provisional measure that prohibits fixed-odds betting, encompassing both sports betting and online casino operations. The Provisional Measure (MP) 1.394 was officially published on the same day, mandating the cessation of federal and state fixed-odds betting authorizations within a 30-day window, without the possibility of refunding any grant fees.
This move effectively bans 0A the operation, offering, intermediation, and advertising of fixed-odds betting lotteries in Brazil, regardless of whether these services are provided locally or by foreign operators targeting players in Brazil. Notably, this is a temporary measure that requires approval from Congress within 120 days. Importantly, any recess periods do not count against this timeline, which could lead to legislative debates extending into early 2027. The timing of the measure comes just ahead of the presidential elections scheduled for October 4, and only two years after Brazil opened its regulated sports betting market.
Is Brazil really banning betting? Yes, but it’s important to underline that the current ban is provisional. The enacted MP 1.394 carries legal weight from the moment of publication. If Congress ultimately does not approve it, it will lose its effectiveness. As the ban was announced, operators have geared up for potential legal challenges. This ban impacts licensed entities as well as all types of sports betting and online casinos.
Prior to the announcement, Brazilian authorities had already intensified their enforcement actions. On September 14, the SPA issued Ordinance SPA/MF 2,750, which obligates banks and payment processors to shut down accounts associated with illegal betting operators within 24 hours and report these actions to authorities within two days. Financial entities were given a 30-day period to adapt their systems accordingly.
In tandem with these efforts, authorities blocked over 500 gambling websites and initiated inquiries into gambling promotions on platforms like Google and Meta. The investigations during September 25-27 observed around 1,960 ads on Google aimed at seven blocked sites, with a removal deadline set for October 5. Additionally, actions are being taken against offshore gambling websites; app stores and mobile networks will be required to implement filters to prevent access to banned betting websites.
Brazil’s crackdown on betting is driven primarily by concerns about gambling addiction and public health. The iGaming sector was legalized in Brazil in 2018 and started operating in a regulated fashion in January 2025. However, this period was marred by rising household income losses attributed to gambling-related issues. Lula has characterized the online gaming industry as a “cancer” that needs to be excised, emphasizing the negative impact on low-income families.
In Lula’s remarks, he stated, “We won’t allow betting companies to profit at the expense of Brazilian families’ income and lives,” accentuating the public health implications voiced by Finance Minister Dario Durigan.
The prohibition significantly affects Brazil’s licensed iGaming sector, which was projected to generate about $5.7 billion in net revenue. Between January and August 2026, operators had contributed approximately $411.2 million in taxes to the Federal Revenue Service, aiming for an annual revenue goal of BRL 16 billion by year’s end. Approximately 188 licensed brands had been operating in Brazil, each paying about $5.8 million for five years of licensing.
Operators like Flutter Entertainment have declared their withdrawal from the Brazilian market, forecasting a revenue hit of approximately $70 million for 2026. Allwyn, connected to Betano’s parent company, Kaizen Gaming, regards Brazil as a critical market and is exploring legal avenues to safeguard its five-year license while expressing concerns about meeting profitability metrics amid this uncertainty.
Offshore betting sites, however, expose players to unregulated and potentially hazardous environments. Industry associations have noted that banning legal operations merely removes protections and oversight, pushing bettors towards illegal platforms. According to ANJL, over 30 million bettors are vulnerable to thousands of unlicensed betting sites without regulations to safeguard them.
Affiliates that primarily engage with Brazilian traffic are also being significantly affected. For instance, Better Collective observed share prices plummeting by about 25%, anticipating revenue losses around €15 million as a direct consequence of these developments. Payment providers now face a mandatory regulatory framework to suspend illegal betting account operations, per instructions from the Central Bank, which includes ensuring illicit transactions cannot be processed.
Betting companies are vital sponsors for 14 of Brazil’s top 20 football clubs, comprising about 20% of the payrolls overall. A previous governmental analysis estimated that betting company sponsorship could total approximately $269.6 million, while these firms expend upwards of $443 million annually on advertisements, potentially endangering media and advertising sector jobs.
The Brazilian betting industry experienced rapid growth, being among the fastest in the global iGaming landscape, with its regulated market performing robustly for just under two years. Legalized initially in 2018, the sports betting sector lacked a formal regulatory framework until Lula’s enactment of Law 14.790 in 2023, which instituted federal licensing. This led to a market launch in January 2025, where operators needed to remit a R$30 million licensing fee for five years and conduct transactions exclusively through approved methods.
In its inaugural year, this market generation was about R$37 billion in GGR from 79 licensed operators, largely dominated by international players, particularly bet365 and Betano. Following an initial easing period, regulatory restrictions tightened notably with banks ordered to freeze unlicensed operators’ accounts by March and advertising restrictions implemented in July. Consequently, accessibility issues emerged for millions of Brazilians, correlating with a significant uptick in illegal platforms resonating with official directives.
Operators and regulators are feeling the impact following the new MP 1.394. The SPA is in the process of dissolving the licensing structure developed over nearly two years, without any public comments on the situation. The Central Bank has been charged with creating a technical solution to prevent illegal transactions, expected to persist even if the Congress endorses the ban.
The National Association of Games and Lotteries (ANJL) has initiated legal action to contest the ban, which they believe illegitimately expands illegal offerings. A report from Bet Legal indicated a surge of 415 illegal betting sites following the ban announcement, marking a stark increase in clandestine operations by 141%. ANJL President Plínio Lemos Jorge asserted that unregulated sites would capitalize on the legal market prohibition, aggravating the situation.
In response, specific operators have halted operations, with Flutter reporting $70 million in losses and Allwyn pursuing legal measures to protect its licensing. Bet365 insists that the ban undermines responsible gaming standards and customer protection, asserting that it shifts customers towards illegitimate sites.
The future of Brazil's betting scene hinges on the outcomes of the Congress and the impending elections. Authorities remain vigilant, planning to monitor platforms to ensure compliance with advertising removals. While MP 1.394 is currently in effect, Congress must still validate it within 120 days; discussions are expected to commence following the election cycle. The gaming sector is prepared to challenge this prohibition in court, aiming to resume operations before legislative fallout.
Regulus estimates a mere 5% chance of a total ban being enforced but predicts an 85% likelihood that significant operational impacts will endure for several months. Some analysts foresee possible regulatory adjustments if Flávio Bolsonaro emerges victorious in the elections, which might trigger the cessation of the betting ban altogether. Lula may secure the first round of elections with a 40% probability but is not expected to win outright.
New legislative initiatives intended to amend Brazil's Betting Law continue, even amid the prohibition discussions. Several proposals are on the table, including PLN 2,972/2026, which seeks to entirely prohibit fixed-odds gambling and scrap existing laws, whereas PLN 4,977/2026 aims to halt gambling advertising but retain current licenses until they expire. Furthermore, there's the introduction of a draft law that would criminalize the use of personal data in recruiting for gambling enterprises, mandating possible incarceration for offenders.
As it negotiates these changes, the potential impacts on previous investments remain uncertain. Betting operators, who each paid R$30 million to enter the market, await clarity on whether those fees will see reimbursement. The Finance Ministry suggests that around R$1.7 billion must be returned to players by the deadline of October 5, insisting that these sums should be accessible soon.
As Brazil embarks on this betting crackdown, the repercussions for the larger Latin American market loom large. Brazil stands as a critically lucrative regulated betting market now projected to be lost. Regional competitors like Colombia continue to operate regulated systems and have successfully engaged responsible gambling measures despite Brazil’s challenges.
As these changes present a number of obstacles for market participants, the eventual fate of Brazil's regulatory landscape will hinge on Congress's actions within the 120-day timeline.
