Politics has taken center stage in Brasília as Congress reconvenes after its break on August 3. The government is aiming to push forward PL 2,258/2026 before the first round of the upcoming elections. This bill, introduced in May by Congressman Paulo Pimenta from the Worker’s Party, proposes amendments to the Betting Law to prohibit online casino games that rely on electronic systems or algorithms, while leaving fixed-odds sports betting intact.
Concurrently, Bill 1,808/2026 seeks to eliminate the entire regulatory framework surrounding gaming. Another proposal under consideration would impose restrictions on advertising, sponsorship, and influencer marketing related to gaming. President Lula, who previously discussed integrated casinos as potential sources of tourism and tax revenue in 2024, has now instructed his ministers to advocate for a ban on these initiatives.
On the institutional front, the Secretariat of Prizes and Bets (SPA) is actively moving forward. It has issued Public Consultation No. 3/2026, open until September 9, to review the authorization process for online gaming. A new decree guiding the design and operation of online casino games is being developed in partnership with the Ministry of Justice and the Secretariat of Social Communication (SECOM). Advertising regulations changed in July, and the National Association of Games and Lotteries recently met with the SPA to discuss game design ordinances, suggesting a phased approach to implementation. Operators can expect a second licensing opportunity later this year.
Recently, much analysis has centered on the implications of PL 2,258/2026. However, the real insights relevant to investors lie within the ongoing institutional evolution.
The specifics of the current legislative discussion are critical. Bill 2,258/2026 does not dismantle Brazil's regulated market but targets a niche area defined by a technical characteristic: games with outcomes generated by electronic means. Notably, sports betting is exempt from this bill's scope. Currently, it awaits a formal referral within the Chamber of Deputies and must navigate committee review, the Plenary, and the Senate before receiving presidential approval.
The potential impact of this legislation is considerable, as online casino operations are believed to generate approximately half of Brazil’s regulated online market revenue. For operators who have structured their business models around multiple verticals, this poses significant risks.
Over 200 bills related to betting have been introduced since the market's inception, but only three have gained significant traction. This distinction is essential for analysis. Understanding active legislation involves not just counting introduced bills, but tracking those that progress through committees, garner rapporteurs, secure Plenary attention, and function within the constraints of an election year when legislative focus wanes.
I do not comment on whether the bill should be passed; that is for Brazilian lawmakers to decide. What is clear is that no single bill determines the viability of Brazil as an investment marketplace.
The outcomes of similar legislative frameworks in Europe provide a useful perspective. Italy, for instance, enacted a sweeping ban on gambling advertising via the “Dignity Decree” in 2018. When sponsorship restrictions kicked in early 2019, the industry braced for collapse, but that outcome never materialized as licensed operators adjusted while unlicensed ones continued operating outside the law. Seven years later, Italy is revisiting this measure as they recognize that strict regulations had unintended migration effects.
Spain’s Royal Decree 958/2020 took a different approach by restricting advertising to a limited late-night window. This strategy achieved desired effects, resulting in reduced account sign-ups and overall betting volume, yet the licensed market adjusted accordingly.
Germany’s experience serves as a warning. Its 2021 Interstate Treaty legalized online slots and poker but imposed strict regulations that led to less than 40% channelization rates for online slots, significantly lower than the European average. With unlicensed operators flourishing, a statutory review of their framework is anticipated this year.
The varied experiences across countries yield a vital lesson: restrictions primarily bind those within their jurisdiction. The effectiveness of such measures depends on a state’s commitment and ability to target illegal operators. An effective enforcement system is essential to maintain regulated channels; a focus on one without the other can produce unintended consequences.
Brazil claims a stronger position in enforcement than critics suggest, yet its achievements are nuanced. Approximately 85 licensed operators manage nearly 190 brands under federal authorization. The SPA has successfully collaborated with Anatel, blocking thousands of unauthorized domains and preventing financial institutions from processing payments for unlicensed operators. Illegal advertising efforts have also been targeted, establishing a functional enforcement framework.
However, the rise in VPN usage this year and plans to require app stores to remove unlicensed applications illustrate vulnerabilities in Brazil’s regulatory structure.
Evaluating the prospects of Bill 2,258/2026 is less critical than assessing whether any restrictions, if imposed, will be effectively enforced. This question determines whether restrictions will consolidate the licensed market or shift revenue to operators escaping regulation.
There exists an imbalance in Brasília that has not gone unnoticed. As the executive branch attempts to restrict online gaming sectors, the Federal Supreme Court is deliberating whether the historic 1946 decree banning games of chance was included in the 1988 Constitution. One government branch seeks to limit the digital market while another explores the legal foundations for banning physical gaming.
Bill 2,234/2022 continues to progress through the Senate amidst this backdrop.
It is crucial to recognize that decriminalization is not tantamount to legalization. Removing legal penalties does not automatically create licenses, establish taxes, set standards, or build enforcement capabilities. Bridging the gap between prohibition and market establishment requires a comprehensive regulatory framework only Congress can enact.
For investors, it is vital to consider the broader context rather than focusing solely on online gaming, as physical gaming markets may evolve independently of immediate regulations. Operators adept at navigating this environment will strengthen their positions by fostering compliance and engagement during restrictive periods, establishing credibility with regulators.
Three key strategies come to the fore for operators:
1. Conduct thorough scenario planning that accommodates various potential outcomes rather than relying on a single trajectory, particularly during an election year where legislative dynamics fluctuate.
2. Engage actively with the institutional framework, such as contributing to Public Consultation No. 3/2026, allowing operators to shape the regulatory process and gain recognition from regulators.
3. Embrace compliance as a proactive measure rather than viewing it merely as a cost. Operators that already embrace responsible gaming practices will be better equipped to align with evolving regulations and build trust with regulatory bodies.
My recent comments at the Brazilian edition of GAT emphasized that while legalization might denote a milestone, investability is the precursor for market success. Developments over the past few weeks have tested this distinction.
No jurisdiction remains reliably friendly to the gaming sector indefinitely. As experienced in Nevada and Macau, restrictions can fluctuate widely. The experiences of Italy, Spain, and Germany show that outcomes hinge significantly on one core variable: the continuous operation of institutions amidst changing political landscapes.
Institutions that remain open, consultative, and capable of oversight are what define a capital-investable market. The evidence suggests Brazil’s gaming institutions will continue progressing, despite the unpredictable nature of political developments. Investors who misinterpret political noise as a sign of institutional failure risk mispricing their opportunities, potentially leading to regret as history shows in comparable cycles.
