Stake, the gaming operator, plans to take further legal action after a Brazilian court annulled an injunction that had temporarily shielded it from a recently enacted betting ban. This ban was put in place by President Luiz Inácio Lula da Silva in late September, but initially, Stake received a brief reprieve when a preliminary injunction allowed its operations to continue until October 25.
However, this relief was short-lived. The following day, Judge Luis Antonio Johonsom di Salvo, who presides over the Federal Regional Court of the 3rd Region (TRF-3), suspended the injunction, leaving Stake back under the ban.
The Brazilian law firm Bichara e Motta Advogados is representing Stake in this matter. Udo Seckelmann, a partner at the firm, confirmed that they intend to contest the decision to rescind the injunction. "Of course, this is not over," Seckelmann stated. "This is just one setback that happened. We are drawing up some strategies to overturn this. We’re going to challenge this decision for sure. We have two possible strategies. We’re analyzing which one would be best to file."
Although Seckelmann did not disclose the specific grounds for the challenge, he acknowledged the broader implications of this case for the Brazilian gaming industry as it struggles to regain its legal footing. "If we get a positive decision in the next couple of days, maybe other operators will get that too," he remarked, recognizing the significance of Stake's challenge for the entire sector.
Stake's objections to the ban are largely rooted in the substantial investments companies made to comply with Brazil's stringent licensing requirements. To operate legally, companies had to pay a BRL30 million ($6 million) licensing fee and maintain a minimum financial reserve of BRL5 million. International operators like Stake were also mandated to have a physical presence in Brazil.
Seckelmann emphasized that this judicial reversal jeopardizes the legal stability that operators relied upon when entering this market. "The government regulated the market, established all the rules, and based on these rules, we’re going to pay you BRL30 million plus BRL5 million of financial reserve to exploit this activity that is legal and regulated," he explained. "And from one moment to another, before we reach the two-year landmark of this license that would be valid for five years, you say now it’s over, that activity is prohibited."
Public perception has played a significant role in the ongoing debate surrounding the gaming sector in Brazil, particularly since the regulated market began on January 1, 2025. The sector has faced negative press linking gambling to family debt. Seckelmann argued that this often wrongfully conflated licensed operators with illegal gambling entities. He pointed out that there is no substantiated evidence connecting licensed operations with the country’s challenges related to addiction and gambling debts. "The reasoning that was raised by the federal government to issue the provisional measure was not grounded on any relevant studies and statistics," he asserted.
The AGU, or Attorney General's Office, requested the judge to reverse Stake's injunction, arguing that the initial ruling created an uneven playing field for other operators. Seckelmann suggested that the AGU strategically targeted the president of TRF-3, known to favor the government, for the appeal. "The prosecutors knew that if they brought this for this president to decide, he would decide in favor of them," he said. This judge's ruling, according to Seckelmann, was politically motivated rather than substantiated by sound reasoning.
The consequences of the ban have already begun to manifest. A survey conducted by the National Association of Games and Lotteries indicated that over 3,500 employees in Brazil's betting sector have been laid off since the provisional measure was enacted. Seckelmann stressed the urgency for the licensed sector to be reinstated, even partially.
Amid Stake's ongoing legal battle, two major gambling trade associations have filed a motion with the Supreme Federal Court (STF) to overturn the ban as unconstitutional. However, Seckelmann noted that a resolution from the STF is not anticipated until after the second round of elections on October 25. He argued that the necessity for a preliminary injunction was critical to maintain Stake's position while awaiting the court's decision.
"We waited for the Supreme Court to make a decision, but they were not making any decisions," Seckelmann reflected. "Our operation is frozen. We have to terminate several contracts, fire many people, and we’re losing money here. If you take a lot of time to decide this, our operation will be over. We have a lot of losses, and this will be irreversible. We will not be able to reverse everything that’s happening."
