President Lula has enacted a provisional measure that prohibits the operation of online betting sites in Brazil, effective immediately. Under this directive, operators are barred from accepting customer deposits from the moment the measure was published.
Bettors are required to withdraw their funds by 5 October, or the sites must credit the amounts held in their accounts between 9 and 14 October. Starting on 6 October, all licensed betting sites will be blocked, and operators are still obligated to return money to users, regardless of whether withdrawals are initiated during the designated window. This refund process will go through their partner banks.
Dario Durigan, Brazil's Minister of Finance, communicated Lula's decision, discussing the government’s actions through the Secretariat of Prizes and Bets (SPA) aimed at regulating the industry and safeguarding families from potential debt. He noted that previous measures had not been successful, highlighting severe gambling addiction cases as a key reason for this comprehensive ban.
Lula reiterated concerns about the negative impact of online betting on family finances and criticized the heavy reliance of sports teams on sponsorship from betting companies.
A timeline of critical deadlines was established:
– By 5 October: Bettors must withdraw their balances.
– On 6 October: Websites and apps will cease operations.
– On 7-8 October: Betting companies must finalize customer balance reconciliations.
– From 9 to 14 October: Full refunds must be issued for user withdrawals.
– By 14 October: Caixa Econômica Federal will assist in refunds if necessary.
The government plans to introduce an urgent bill in the National Congress that outlines criminal penalties for individuals who conduct or promote sports betting. The proposed penalties may include imprisonment for four to six years and fines for those involved in payment processing.
The abrupt ban raises questions about legal uncertainty, and nearly 90 licensed companies, each having paid BRL30 million ($5.8 million) in fees, may pursue legal remedies to reclaim their investments and lost revenue.
Trade organizations have reacted strongly to this ban. The National Association of Games and Lotteries (ANJL) cautioned that it could lead to significant losses in tax revenue and potential job losses, pushing bettors toward illegal gambling avenues. The association is taking legal steps to contest the provisional measure.
In their statement, the ANJL expressed that this decision undermines principles such as free enterprise and human dignity while encouraging illegal operations.
The Brazilian Institute of Responsible Gaming (IBJR) also expressed concerns, stating that closing this market soon after its establishment would result in severe economic and legal repercussions, and hinder efforts to regulate an activity that has been previously recognized within the country.
