Brazil’s newly regulated betting market faces possible policy reversal

Brazilian gambling industry associations and legal experts have warned against a possible government measure to restrict or ban regulated online betting, as President Luiz Inácio Lula da Silva intensifies criticism of the sector ahead of the first round of Brazil’s general election on October 4.

Reuters has reported that the Presidência da República is preparing a provisional measure that could prohibit online casino games while leaving sports betting and associated sponsorships formally untouched. The proposal has not yet received presidential approval, and no final text has been confirmed.

Brazilian gambling associations and legal experts have warned that a threatened ban on regulated online casinos could push millions of consumers toward unlicensed operators.

Women’s industry group warns on jobs

The Associação de Mulheres da Indústria do Gaming (AMIG) issued an open letter expressing “deep concern and repudiation” of calls to close or prohibit companies operating legally in Brazil. The association said it has approximately 1,500 members and represents an industry employing around 10,000 women across technology, compliance, legal services, anti-money laundering, safer gambling, payments and customer support.

AMIG cited data from the Secretariat of Prizes and Betting (SPA) showing that women account for 31.7% of active players in Brazil’s regulated market, or approximately 10.1 million women among nearly 31.8 million unique active bettors, based on data extracted from the country’s Sigap system on 8 September. “Banning is not synonymous with protecting,” the association said, arguing that prohibition would not necessarily eliminate demand and could redirect consumers toward operators without age verification, self-exclusion, transaction monitoring or responsible-gambling controls.

Natalia Nogues, AMIG founder and CEO of Control F5, raised a similar point in a LinkedIn post. “If we reduce the legal supply, does the demand for gambling disappear along with it? And if it doesn’t disappear, where do those consumers go?” she wrote, adding that “making the legal offering disappear does not necessarily mean making the desire to play disappear.”

Operators’ Association points to legal risk

The Associação Brasileira dos Operadores e Provedores Internacionais de Jogos (ABRAJOGO) said companies were authorised to operate for five years after paying licensing fees and meeting financial, operational, integrity and consumer-protection requirements. Each operator paid R$30 million to the federal government for its five-year authorisation, a process that generated approximately R$2.5 billion for the public coffers. In 2025, tax revenue related to betting reached approximately R$9 billion, according to Federal Revenue Service figures presented to the Chamber of Deputies, taking combined public revenue from fees and taxes above R$11 billion.

“Abruptly shutting down this market right at the start of regulation would be a severe breach of investors’ legitimate expectations and the predictability expected of the State,” said Witoldo Hendrich, president of ABRAJOGO. The association said it was not seeking regulatory immunity, but proportionality and legal certainty, and warned that a ban could prompt the sector to pursue proceedings before Brazil’s Supreme Federal Court and claims for reimbursement and compensation potentially reaching R$120 billion.

Ana Helena Pamplona, ABRAJOGO’s legal director, said the message such a measure would send to international investors is that “even a company that meets all requirements, pays a multi-million-dollar licensing fee, and receives a long-term authorisation can see its investment rendered unviable by a sudden political shift.” Ana Bárbara Teixeira, the association’s director of government relations, added that shutting down authorised companies “would mean reopening the Brazilian market to underground operators.”

Sponsorship and jobs at stake

José Francisco Manssur, a former special advisor to the Ministry of Finance during the drafting of Brazil’s betting regulation, said he viewed the potential measure with “shock” and “enormous concern.” He said more than 15,000 jobs within the betting industry could be lost, and that multi-year sports sponsorship contracts would lose their purpose, along with associated fund transfers to education, health, public security and sports organisations.

ABRAJOGO said betting-company investment in Brazilian football clubs had already surpassed R$1 billion by 2026, with 13 clubs carrying sector sponsors as their main partner. In 2024, 18 of the 20 Série A clubs featured sponsorship from the sector, with investments estimated at R$523 million that year.

Legal experts question the ban’s effectiveness

Udo Seckelmann, head of gambling and crypto at Bichara e Motta Advogados, said on Instagram that betting is not going to disappear regardless of the outcome. “The real question is: will the ban solve anything, or will it improve to some degree what is happening in Brazil today?” he asked, noting that Brazil currently has 188 regulated betting sites compared with more than 6,000 illegal platforms, and that between 38% and 44% of betting volume in the country goes to the underground market — down from around 50% in 2025. “The demand isn’t going to disappear; it will just move elsewhere,” he said.

AMIG urged the government to distinguish licensed operators from illegal ones and to consult regulated-sector representatives before proceeding with any measure.