President Lula has enacted a provisional measure that prohibits the operation of online betting sites in Brazil, with the ban taking effect immediately. This means that as of the announcement, no operator is allowed to accept new customer deposits. Bettors must withdraw their funds by October 5. For those who do not request a withdrawal by that date, the sites are obliged to return the funds held in their accounts between October 9 and 14.
From October 6 onward, all operation of licensed betting sites will cease, and even if a bettor fails to withdraw their balance during the designated timeframe, operators are still required to refund the held amounts through their partner banks.
Dario Durigan, Brazil's Minister of Finance, communicated Lula's decision. He highlighted previously taken measures by the Secretariat of Prizes and Bets (SPA) to govern the industry and noted that these efforts had not been effective in preventing issues related to gambling. He pointed out severe cases of gambling addiction that contributed to the rationale behind the complete ban.
Lula emphasized that online betting undermines family finances and criticized the reliance of sports teams on sponsorships from betting companies. The government introduced specific deadlines regarding the new regulations:
– Between now and October 5: Bettors must withdraw their account balances.
– October 6: Websites and apps will cease operations.
– October 7-8: Operators must compile customer balances by CPF (Cadastro de Pessoas Físicas).
– October 9-14: Operators must process full refunds of any account balances requested by users.
– From October 14: Caixa Econômica Federal, the state-owned bank, will assist with refunds if operators encounter challenges with their banking partners.
In addition to this ban, the government plans to present an urgent bill to the National Congress seeking criminal penalties for individuals who manage, operate, or promote sports betting, with possible imprisonment of four to six years and fines. Institutions facilitating betting payments could face two to four years of imprisonment.
This controversial move by Lula has created a climate of legal uncertainty, leading to expectations of immediate legal actions from affected parties. Nearly 90 companies previously engaged in the regulated betting market, each paying BRL30 million (approximately $5.8 million) for licensing, are anticipated to file lawsuits to reclaim their investments and seek compensation for lost revenues.
Trade associations have begun to respond. The National Association of Games and Lotteries (ANJL) cautioned that the betting ban could result in a loss of billions in tax revenue and the elimination of thousands of jobs, while pushing bettors toward illegal operations. They are actively pursuing legal action to contest the provisional measure.
The ANJL criticized the decision, suggesting it undermines constitutional rights around free enterprise and human dignity, which could drive bettors to the underground market. The Brazilian Institute of Responsible Gaming (IBJR) remarked that abruptly shutting down the market after its introduction could lead to substantial economic and legal repercussions, jeopardizing the advancements made in regulating a previously unregulated activity in the country.
