On September 25, Brazil’s President Luiz Inácio Lula da Silva enacted a provisional measure banning fixed-odds betting, which encompasses both sports betting and online casinos. Known as Provisional Measure (MP) 1.394, this legislation, published the same day, mandates that federal and state authorizations for fixed-odds betting cease within 30 days, offering no refunds on the associated grant fees.
The measure explicitly forbids "the exploitation, offering, intermediation and advertising of fixed-odds betting lotteries, in physical or virtual form, including actions by operators located abroad targeting individuals within Brazil." While this enactment currently holds legal weight, it is not yet permanent, as Congress must validate it within 120 days. However, since recess does not count against that period, discussions may extend into early 2027. This ban coincides with the lead-up to the presidential election on October 4, just two years after Brazil embraced its regulated sports betting market.
Despite the ban, discussions surrounding its permanence are ongoing, with operators gearing up to challenge it legally. Not only does the ban impact licensed entities, but it also encompasses all forms of sports betting and online casino operations. Enforcement began ramping up even prior to the announcement; on September 14, the Superintendence of Financial Activities (SPA) issued a directive instructing banks and payment processors to close accounts associated with illegal operators within 24 hours of notice, with a requirement for swift notification to authorities.
Additionally, the government has initiated a crackdown on online gambling, blocking 506 websites and investigating gambling advertisements on platforms such as Google and Meta. A significant number of ads, approximately 1,960, were reported linking to these prohibited sites between September 25 and 27, with a deadline set for removal by October 5.
Concerns over gambling addiction and public health have driven the push for this ban. Lula has characterized the gambling industry as a "cancer" detrimental to many lives, particularly those of low-income families. In his statement, he declared, "We won’t allow betting companies to profit at the expense of Brazilian families’ income and lives." The Finance Minister, Dario Durigan, echoed these sentiments, acknowledging the pressing public health crisis presented by online betting.
The licensed iGaming sector, which previously boasted approximately $5.7 billion in net revenue, now faces uncertain prospects. Before the ban, the industry was projected to achieve record annual revenues of BRL 16 billion by year's end, with operators having contributed roughly $411.2 million in gambling taxes to the Federal Revenue Service between January and August of 2026. Brazilian authorities have estimated that around 188 brands were operating with licenses that required an upfront investment of about $5.8 million for five years. In light of the ban, Flutter Entertainment has ceased its operations in Brazil, predicting a $70 million revenue hit, alongside an adjusted earnings impact of $20 million if the situation persists through 2026.
Allwyn, a stakeholder in Betano's parent firm, views Brazil as a strategic market and is exploring legal measures to safeguard its license, which it secured on January 1, 2025. This situation raises concerns, as more than 30 million bettors might shift towards illegal sites, offering no regulatory protections—a consequence the National Association of Games and Lotteries (ANJL) warns will exacerbate rather than mitigate gambling issues.
The ban adversely affects affiliates heavily reliant on Brazilian traffic; companies like Better Collective have suffered significant decreases in stock value. Payment processors, including Pix, will also have to adapt their systems to block transactions related to gambling under regulations from the Central Bank. Sports clubs and media companies are poised to feel the effects as well, given that betting companies are significant sponsors for many top Brazilian football clubs, representing an average of 20% of the payroll for these clubs.
The rapid rise of Brazil’s regulated betting market has now faced its swift decline. After legalizing sports betting in 2018, the industry thrived, generating approximately R$37 billion in gross gaming revenue within its first year of regulation following Lula’s implementation of a federal licensing framework.
As the market was reaching new heights, regulations began tightening earlier in the year. Institutions were ordered to freeze accounts of unlicensed operators, and new legislation mandated the usage of warning labels on betting ads. By mid-2026, millions of Brazilians had been effectively barred from accessing these websites.
The response to MP 1.394 has varied within the industry. Regulators have prioritized public health, while industry bodies such as ANJL have signaled legal action against the ban. Flutter, having ceased operations, anticipates further significant losses, while bet365 considered the measure unconstitutional, warning it could push customers towards unregulated markets. Both Entain and Kambi have prepared their stakeholders for limited impacts, with Kambi exhibiting a more tempered expectation of Brazil's overall contribution.
The fate of the betting market rests in Congress's hands after the upcoming elections. Authorities intend to monitor platforms for ad compliance and have initiated discussions with major tech companies about regulatory measures. While the immediate ban stands, Congress must act within the designated timeframe to solidify or overturn MP 1.394. Some analysts expect the outright prohibition to be unlikely, predicting instead an extended halt to operations which could last several months, particularly if political winds shift.
The proposed ban matters not only to Brazil but could also ripple through Latin America. Brazil's burgeoning betting market has established itself as a significant player in the region, generating substantial revenue. Unlike Brazil, Colombia’s regulated market continues to thrive under Coljuegos, underscoring the potential impacts of Brazil's regulatory decisions on the wider landscape. The measures taken in Brazil will likely exacerbate illegal gambling, leading to a concerning trend for both players and operators, while broader regulatory confidence in the Latin American market may also suffer as a consequence.
