Brazil Bans Online Betting As Lula Orders Licensed Market To Close
President Lula has signed a provisional measure ending Brazil’s regulated fixed-odds betting market, with licensed platforms required to shut down from 6 October.
Brazil has moved to ban fixed-odds betting less than two years after launching its federally regulated online market, with President Luiz Inácio Lula da Silva signing a provisional measure that will force licensed operators to cease operations.
Provisional Measure 1,394 was signed and published on 25 September, prohibiting the operation, offering, intermediation and advertising of fixed-odds betting throughout Brazil. It covers both sports betting and online casino games and also applies to state and Federal District authorisations.
The measure has immediate legal force, although the licensed market will undergo a short wind-down period. Operators can no longer accept customer deposits, while bettors have until 5 October to withdraw funds before licensed websites and apps are taken offline from 6 October.
Finance Minister Dario Durigan announced the decision, arguing that regulatory measures introduced since the market launched had failed to address the government’s concerns surrounding gambling-related harm and household finances.
Licensed Operators Given Days To Exit Brazil
The government has established a timetable for winding down the regulated sector and returning customer balances.
Bettors can request withdrawals until 5 October, with platforms required to cease operating from midnight on 6 October. On 7 and 8 October, operators must consolidate remaining customer balances by CPF, Brazil’s individual taxpayer identification number.
Between 9 and 14 October, remaining balances must be returned to customers through operators and their banking partners, including where the bettor did not previously request a withdrawal.
Caixa Econômica Federal will become involved from 14 October where difficulties prevent operators or their banking partners from completing refunds.
The decision represents a dramatic reversal of Brazil’s recent gambling policy. Almost 90 companies secured licences for the regulated market, with federal authorisations costing R$30 million and running for five years.
The provisional measure also extinguishes state and Federal District fixed-odds betting authorisations under the timetable established by the new rules.
Government Plans Criminal Penalties
Brazil’s government is also preparing separate legislation establishing criminal penalties for operating or promoting sports betting following the prohibition.
Under the proposed legislation, individuals involved in running, operating or promoting betting could face between four and six years in prison alongside financial penalties. Institutions processing betting payments could face prison terms of between two and four years.
The government also intends to continue blocking unauthorised gambling websites and disrupting their payment infrastructure after licensed platforms have closed.
Lula has repeatedly criticised the rapid expansion of online betting in Brazil, arguing that gambling has contributed to addiction and financial problems among Brazilian households. He has also questioned the increasing reliance of football clubs on sponsorship revenue from betting companies.
Industry Prepares Legal Challenge
The decision is expected to face legal challenges from operators and industry associations that invested in Brazil following the creation of the regulated market.
The National Association of Games and Lotteries (ANJL) confirmed it was “taking appropriate measures to overturn the provisional measure by taking the matter to court”.
The association warned that closing the licensed market would cost Brazil tax revenue and jobs while encouraging consumers to use illegal operators.
The Brazilian Institute of Responsible Gaming (IBJR) also criticised the decision, saying:
“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.”
Licensed operators could also pursue claims relating to authorisation fees, investments and other losses, although the extent of any government liability will depend on future legal proceedings.
The provisional measure has already taken effect but remains subject to consideration by Brazil’s National Congress, adding a further political and legal dimension to the abrupt closure of one of the world’s largest newly regulated betting markets.
