President Luiz Inácio Lula da Silva has enacted a provisional measure that bans the operation of online betting sites in Brazil, effective immediately. Under this new ruling, operators are prohibited from accepting customer deposits as soon as the measure is published.
Bettors are required to withdraw their funds by October 5. Should they not do so, the betting sites must return the remaining balances to registered accounts between October 9 and 14.
Starting October 6, all licensed betting sites will be blocked from operation. Even if bettors do not initiate withdrawals during the designated period, operators are still obligated to refund any remaining money. This process will be facilitated through their partner banks.
Finance Minister Dario Durigan, who announced Lula's decision, detailed the actions taken by the Secretariat of Prizes and Bets (SPA) to regulate the gambling industry, emphasizing the government's commitment to protecting families from financial ruin. He highlighted previous measures as inadequate in addressing issues like gambling addiction, which played a role in the total ban.
The immediate effect of the provisional measure means that the government will enforce mechanisms to close down all betting service providers. Durigan noted that the public can report illegal sites through a channel established on the government’s website.
In his address, President Lula reiterated concerns about the financial impact of online betting on families, condemning the heavy reliance of sports teams on sponsorship from betting companies.
A series of deadlines have been outlined following the announcement:
– **By October 5**: Bettors must withdraw their balances from betting sites.
– **October 6**: Websites and applications will cease operations.
– **October 7-8**: Betting operators must consolidate customer balances according to CPF (Cadastro de Pessoas Físicas).
– **October 9-14**: Companies must refund customer balances that have been withdrawn.
– **From October 14**: Caixa Econômica Federal, the state-owned bank, will assist in refunding any problematic transactions involving operators.
Additionally, the provisional measure involves the introduction of an urgent bill to the National Congress aimed at instituting criminal penalties for those involved in running or promoting sports betting. Penalties stipulated range from four to six years in prison along with fines; institutions involved in processing betting payments may face two to four years of imprisonment.
Lula's decision has sparked legal uncertainty, and 90 licensed companies, each having paid BRL30 million (approximately $5.8 million) in fees, are anticipated to challenge the ruling. These companies may seek reimbursement for investments and claims against the lost revenue they will incur.
Trade organizations have responded strongly to the provisional measure. The National Association of Games and Lotteries (ANJL) warned that the ban could lead to significant tax revenue losses and thousands of job eliminations, ultimately pushing bettors into illegal markets. The ANJL announced plans to contest the measure in court, claiming it undermines free enterprise and human dignity.
Similarly, the Brazilian Institute of Responsible Gaming (IBJR) expressed concerns, stating that the abrupt closure of the betting market would have severe economic and legal repercussions, jeopardizing progress made in formalizing and regulating an activity that had already been established within Brazil.
