Brazil bans betting and online casino gambling with immediate effect

The immediate suspension of online gaming and betting in Brazil comes less than two years after the sector was regulated.

Key takeaways:

• Brazil has imposed an immediate suspension on online betting, with operators no longer allowed to accept deposits and all licensed betting websites and apps set to be blocked from October 6.
• Operators will be required to return all player balances by October 14, even if customers do not actively request a withdrawal.
• The Lula administration says the move was driven by concerns over addiction and household debt, arguing that previous regulatory measures have failed to prevent financial harm to Brazilian families.
• Industry groups have vowed to challenge the decision in court, warning that the ban could destroy thousands of jobs, reduce tax revenues and push millions of gamblers towards illegal operators.

Brazil.- President Luiz Inacio Lula da Silva has announced an immediate suspension of online gambling in Brazil less than two years after the regulated market was launched in January 2025. The announcement comes two weeks ahead of presidential elections on October 4.

Under a provisional measure signed on Friday, online betting operators are no longer permitted to accept customer deposits with immediate effect. Customers have until October 5 to withdraw any remaining balances. Licensed betting websites and apps will be blocked from October 6, while operators must reconcile customer balances between October 7 and October 8 and return funds between October 9 and 14.

Should customers fail to request withdrawals before the deadline, operators will still be required to refund the money through their banking partners. From October 14, state-owned lender Caixa Econômica Federal will assist in processing repayments if operators or financial institutions encounter difficulties.

Finance Minister Dario Durigan, who announced the decision on the government’s behalf, said authorities had previously attempted to regulate the sector through measures introduced by the Secretariat of Prizes and Bets (SPA) and initiatives designed to protect households from excessive debt. However, he said these efforts had failed to achieve their intended goals. “We are facing a public health issue,” he said during the announcement.

Durigan said the government would take action against websites offering betting services and encouraged members of the public to submit reports through the government’s complaints platform.

Alongside the executive order, the government plans to submit an urgent bill to Congress to create criminal penalties for individuals who run, operate or promote sports betting. Under the proposal, offenders could face prison sentences of four to six years in addition to financial penalties. Institutions involved in processing betting payments could face sentences of two to four years. The provisional measure must be approved by Congress within 120 days if it is to remain permanently in force.

A dramatic reversal

The decision marks a dramatic reversal less than two years after Lula’s administration introduced a legal framework governing online betting. Although sports betting was legalised in Brazil in 2018 under former president Michel Temer, the sector remained largely unregulated during Jair Bolsonaro’s presidency. Lula signed sports betting legislation in December 2023 to establish a comprehensive regulatory structure and formally authorise online casino games as well as sports betting. Since January 2025, licensed operators have been permitted to offer services nationwide after paying concession fees and meeting regulatory requirements.

However, government officials have increasingly linked gambling losses to household financial pressures despite Brazil’s relatively low unemployment and moderate inflation. The Finance Ministry estimates that Brazilian households spend around 60bn reais annually on online betting, generating approximately 10bn reais in tax revenue. Lula had already signalled that he was in favour of a ban on online casino gambling, but the announcement of an immediate ban on both igaming and sports betting had not been expected until reports emerged in recent days.

Lula argued that online gambling has damaged family finances across Brazil and criticised the growing dependence of sports clubs on sponsorship agreements with betting companies. He also announced the creation of a new household debt relief scheme as part of his bid for re-election. The government will spend 15bn reais at an auction scheduled for November to acquire and restructure up to 150bn reais of delinquent household debt, purchasing loans at discounts of at least 90 per cent.

Industry reaction to the ban on betting in Brazil

The ban is expected to trigger a wave of legal challenges. Nearly 90 licensed operators had each paid BRL30m in licence fees and invested heavily in the regulated market. Industry participants are expected to seek reimbursement of licence costs, compensation for investments and damages for lost profits.

The federal government may also face complications from Brazilian states that have established their own sports betting frameworks through state lottery systems.

The National Association of Games and Lotteries (ANJL) warned that the prohibition would cost the government billions in tax revenue, eliminate thousands of jobs and drive consumers towards unregulated operators. The organisation also confirmed it was already “taking appropriate measures to overturn the provisional measure by taking the matter to court”.

It said: “In a move unprecedented in the global industry, aimed solely at perceived electoral gain in the race for the presidency, the country is undermining constitutional principles such as free enterprise and human dignity; the latter is compromised by facilitating the migration of bettors to the illegal market.”

The ANJL argued that more than 30 million gamblers could be pushed towards illegal betting websites as a result of the ban and said the decision disregarded investments made by companies that entered the market in compliance with existing laws.

The Brazilian Institute of Responsible Gaming (IBJR), an association representing the interests of licensed gambling operators, also criticised the decision. “Shutting down this market shortly after its implementation will have significant economic and legal consequences and will undermine the progress made in formalising and controlling an activity that already existed in the country,” it said.

According to JPMorgan, listed gambling groups with notable exposure to Brazil include Evolution, which derives around 9 per cent of its sales from the country, Allwyn, whose Betano business contributes between 6 per cent and 7 per cent of EBITDA, as well as Entain and Flutter.

The right-wing opposition candidate Flavio Bolsonaro, the eldest son of former president Jair Bolsonaro and currently close in the polls, described the measure as “populist, hypocritical and politically motivated” during a campaign event in Rio de Janeiro. However, Caroline De Toni, a deputy in his own Partido Liberal (PL), introduced a bill seeking a ban on sports betting just last month. De Toni’s bill would have given operators 180 days to cease operations.

Frequently asked questions (FAQs)

When will online betting websites stop operating in Brazil?
Licensed betting websites and apps are scheduled to go offline on October 6, However, operators must stop accepting deposits immediately following publication of the provisional measure.

What happens to money currently held in Brazilian betting accounts?
Bettors have until October 5 to withdraw their balances. Operators must then return all remaining customer funds between October 9 and 14, even if users do not initiate a withdrawal request.

Can the ban on betting in Brazil will be overturned?
The measure is expected to face immediate legal challenges from operators and trade bodies. The provisional measure must be approved by Congress within 120 days if it is to remain permanently in force.

By Focus Gaming News Editorial Team