Brazil's President Luiz Inácio Lula da Silva is preparing to introduce a provisional measure this week aimed at tightening regulations on betting throughout the country. Sources indicate that the government is contemplating wider restrictions on advertising related to betting and may prohibit online casino games, allowing only sports betting to continue.
Utilizing a provisional measure enables immediate implementation of these regulations, just weeks before elections, suggesting that Lula is leveraging the issue as part of his re-election strategy.
The drafting of this proposal is being handled by the Civil House, with speculation that its true aim is to ride the wave of public criticism against the gambling industry. Recently, the Brazilian betting industry has come under increasing scrutiny, amid concerns that families are sinking into debt due to gambling.
Divisions within the government have surfaced regarding this approach. Lula aims to bypass the lengthy legislative process by not presenting the measures as a full bill, which could dilute their political effectiveness in the lead-up to elections. However, certain factions, particularly the Ministry of Finance, are opposed to more stringent measures. The Finance Ministry acknowledges the sector's significance to the economy. Finance Minister Dario Durigan faces challenges in persuading Lula of the importance of a well-regulated gambling sector for public finances, particularly as Lula has publicly stated that he would prefer to eliminate betting entirely from Brazil.
Lula's opposition to gambling aligns with sentiments echoed by other political candidates. Studies from the Workers' Party (PT) reveal that approximately 75% of Brazilians are against betting establishments, a statistic that furthers the president's justification for imposing tougher restrictions on the sector.
The potential loss of tax revenue from betting raises eyebrows, too. The government collected nearly BRL10 billion (around $1.97 billion) from the licensed betting sector in 2025. In just the first seven months of the year, taxation from this activity contributed BRL8.7 billion to public finances. Projections from the Federal Revenue Service suggest that the sector could generate approximately BRL16 billion in tax revenue by 2026.
Additionally, companies have already invested over BRL2.5 billion for operational licenses following the sector's regulation. A move to terminate betting activities could lead to litigation over these payments and demands for compensation related to past investments. The anticipated tax income from betting is also integrated into the Annual Budget Law, which outlines the federal government's spending priorities.
What concerns the betting sector is not just the threat of new restrictions. To this point, the government's efforts to combat the illegal gambling market have been largely ineffective, with estimates suggesting that illegal operations account for nearly half of the market.
