Brazil’s online betting sector faces an abrupt shutdown after President Luiz Inácio Lula da Silva signed a provisional measure prohibiting online sports betting and casino gaming across the country, marking a dramatic policy shift less than three years after his administration established a regulatory framework for the industry.

The announcement came as Brazil enters the final stretch of its presidential campaign, with the first round of voting scheduled for October 4. Opinion surveys cited in reports indicate Lula is engaged in a close contest with Senator Flávio Bolsonaro, son of former President Jair Bolsonaro.

The executive order takes effect immediately but requires approval from Congress within 120 days to remain in force. If lawmakers do not approve the measure, it will expire.

The decision reverses a regulatory approach that culminated in Lula signing legislation in 2023 that formally authorized online casino games and sports betting while setting rules for licensed operators. Companies that met regulatory requirements and paid authorization fees have been permitted to operate nationwide since January 2025.

Government Links Ban to Debt and Social Concerns

Brazilian officials presented the move as part of a broader effort to address household debt and gambling-related harm.

During the announcement, Finance Minister Dario Durigan said: “We are facing a public health issue involving ⁠online betting. It is a serious problem.”

The government has argued that increasing gambling expenditure has contributed to financial strain among households. According to Finance Ministry estimates, Brazilian consumers spend approximately 60 billion reais annually on online betting, generating around 10 billion reais in tax revenue.

Lula has adopted increasingly strong language when discussing the sector. According to reports cited by NBC News, he described online gambling as a “cancer” and warned that “either we remove the tumour, or it kills us”.

In comments posted on social media, Lula said the industry had expanded rapidly after legalization, claiming there were insufficient safeguards preventing young people from accessing betting platforms. He stated: “We won’t allow betting companies to profit at the expense of Brazilian families’ income and lives.”

The president also referenced accounts from families affected by gambling addiction and, earlier at the United Nations General Assembly, accused the industry of “transforming addiction into profit.”

Public opinion appears divided but generally supportive of tighter restrictions. One survey referenced in reports found roughly three-quarters of Brazilians favor a complete prohibition of online betting, while another poll showed 59.9% support for banning internet gambling.

Operators Face Tight Wind-Down Timeline

The measure establishes a rapid closure process for licensed operators.

Customers will be allowed to withdraw funds from betting accounts until October 5. According to Durigan, app stores and network providers will begin blocking betting websites on October 6.

Reports indicate operators are barred from accepting new deposits immediately. Remaining balances that customers do not withdraw themselves are expected to be returned through financial institutions during a subsequent transition period.

The order extends beyond gaming operations. Advertising, sponsorship agreements and marketing activities connected to betting companies are also slated to end, with existing promotional materials required to be removed shortly after implementation.

Financial institutions and payment providers will be restricted from processing gambling-related transactions apart from those associated with the market’s closure and customer reimbursements.

The government has also established an inter-agency enforcement body tasked with combating illegal betting activity and coordinating website-blocking efforts.

Industry stakeholders face additional financial consequences. Reports indicate that companies holding federal licenses will not receive refunds for authorization fees already paid, nor compensation for the termination of their operating rights.

The measure also halts pending market-entry applications, eliminating opportunities for companies that had been seeking approval to launch regulated services in Brazil.

Industry Groups and Football Clubs Warn of Consequences

The announcement drew immediate criticism from industry representatives and sporting organizations.

Flávio Bolsonaro described the move as “populist, hypocritical and politically motivated” during a campaign event in Rio de Janeiro.

Trade associations representing betting operators argued that prohibition could drive customers toward unlicensed platforms. The National Association of Games and Lotteries (ANJL) warned that more than 30 million gamblers could migrate to illegal websites, while the Brazilian Institute for Responsible Gaming (IBJR), which represents a large portion of the regulated sector, said demand for betting would likely persist even if licensed operators disappear.

IBJR stated that consumers using illicit platforms would lose “access to protection mechanisms provided in the regulated environment” and called on authorities to strengthen regulation rather than eliminate legal betting altogether.

Brazilian football clubs have also voiced concerns. Grêmio said betting sponsorships have become a major source of income for sports organizations since legalization. The club warned that banning the industry “will not only be an open door for illegal betting, but a fatal blow to Brazilian football, leading many clubs to insolvency”.

Reports cited figures showing betting companies paid Brazilian football clubs approximately 1.1 billion reais in sponsorship-related revenue during 2025.

The broader business impact could extend across suppliers, payment companies, marketing firms, affiliates, broadcasters and sports organizations that expanded alongside the regulated market.