Brazil's President Lula has enacted a provisional measure that prohibits online betting operations, effective immediately. According to this measure, once it was officially published, online betting operators are barred from accepting any customer deposits.
Bettors have until October 5 to withdraw their funds from these platforms. If they do not request withdrawals by that date, the betting sites are obligated to refund the amounts held in their accounts between October 9 and 14. From October 6, all licensed betting sites will be blocked, and operators must return funds regardless of whether a bettor has initiated a withdrawal during the specified timeframe. Refunds are to be handled through the operators' partner banks.
Dario Durigan, Brazil's Minister of Finance, announced President Lula's decision. He mentioned the actions of the Secretariat of Prizes and Bets (SPA) aimed at regulating the betting industry, emphasizing the need for measures that protect families from potential debt. Durigan noted previous regulatory efforts had not yielded the desired outcomes, especially in light of growing concerns about gambling addiction, which influenced Lula's decision to impose an outright ban.
The deadlines established under this measure are as follows: Currently until October 5, bettors must withdraw their remaining balances from the platforms. On October 6, the websites and apps will become inoperable. Between October 7 and 8, operators are required to consolidate customer balances using taxpayer identification numbers (CPF). From October 9 to 14, operators must process full refunds for users who have withdrawn during that period. If issues arise with banks during the refund process, the state-owned Caixa Econômica Federal will assist starting on October 14.
In addition to the outright ban, the government plans to submit a legislative proposal to the National Congress, which will introduce criminal penalties for operating or promoting sports betting. Individuals found guilty could face four to six years in prison and a fine, while institutions handling betting payments may incur two to four years of imprisonment.
This policy introduces a layer of legal uncertainty that is likely to incite immediate challenges in court. Nearly 90 licensed betting companies, each having paid BRL 30 million (approximately $5.8 million) for their licenses, may pursue legal avenues to recover their funds and seek compensation for investments and lost revenues. The federal government will also need to address state-level regulations where sports betting is permitted under state lotteries.
Trade organizations have already started pushing back against the ban. The National Association of Games and Lotteries (ANJL) cautioned that the prohibition would result in substantial tax revenue losses, thousands of job eliminations, and prompt bettors to shift to illegal gambling markets. The ANJL is pursuing legal action to challenge the provisional order, claiming it undermines constitutional rights to free enterprise and human dignity, potentially pushing bettors toward the illegal sector.
The Brazilian Institute of Responsible Gaming (IBJR) echoed concerns about the economic and legal ramifications of abruptly shutting down the newly established market, warning it would negate progress made in formalizing and regulating an industry that had already surfaced in Brazil.
