President Lula has announced a provisional measure that immediately prohibits online betting operations in Brazil. Upon the measure's publication, all operators are barred from accepting customer deposits, prompting bettors to withdraw their funds by October 5. If they do not initiate withdrawals, operators will have to credit the funds held in their accounts between October 9 and 14.
Starting October 6, all licensed betting websites will be inaccessible. Companies must refund bettors regardless of whether a withdrawal is initiated during the specified window. Refunds will be processed through partner banks.
Finance Minister Dario Durigan was designated to communicate Lula's decision. He addressed the actions of the Secretariat of Prizes and Bets (SPA), which aimed to regulate the betting industry and protect families from financial risks. However, he acknowledged that these measures had not been enough, citing increasing instances of gambling addiction that led to the total ban.
The provisional measure takes effect immediately, and the government plans to enforce strict measures against websites offering betting services. Reports regarding noncompliance can be submitted through the government’s platform.
In his remarks, Lula emphasized the detrimental impact of online betting on family finances and criticized the heavy reliance of sports teams on sponsorship from betting companies.
The deadlines related to the ban are as follows:
– By October 5, bettors must withdraw their account balances.
– On October 6, all betting websites and applications will be taken offline.
– Between October 7 and 8, operators must consolidate customer balances by individual CPF numbers.
– From October 9 to 14, operators are required to fully refund balances withdrawn by users.
– After October 14, Caixa Econômica Federal will assist in refunding funds if operators or banks face difficulties.
The government will also submit an urgent bill to the National Congress, imposing criminal penalties for individuals who operate or promote sports betting. Offenders could face four to six years of imprisonment and fines, while institutions processing betting payments may incur penalties of two to four years in prison.
The measure has raised concerns about legal uncertainties, with nearly 90 licensed companies that collectively paid BRL30 million ($5.8 million) in license fees likely to pursue legal action for reimbursement of their costs and compensation for lost profits. Additionally, the federal government will have to address the states that have already established their sports betting regulations.
In reaction to the provisional measure, the National Association of Games and Lotteries (ANJL) warned that the ban could lead to significant tax revenue loss and job elimination, forcing bettors into the illegal market. The association is already preparing to challenge the measure in court, stating, "This move, unprecedented in the global industry, is solely aimed at perceived electoral gain and undermines constitutional principles such as free enterprise and human dignity, while facilitating the shift to illegal betting."
In contrast, the Brazilian Institute of Responsible Gaming (IBJR) expressed concerns, stating, "Shutting down this market shortly after its launch will have significant economic and legal ramifications, undermining the progress achieved in formalizing and regulating an activity that has long existed in Brazil."
