Brazil betting ban leaves suppliers with unpaid invoices and cancelled contracts
Regulation3 min read
Brazil’s betting ban has left suppliers and contractors facing unpaid invoices and cancelled contracts, according to industry participants. The SPA said it had no study measuring the ban’s effects before it took effect; operators must still keep records for five years and report to the authority.
Brazil's betting ban has left suppliers with unpaid invoices and contractors with cancelled agreements, industry participants said. Provisional Measure 1.394, signed on 25 September, closed the regulated betting market, and Justice Luiz Fux suspended lower-court challenges nationwide from 9 November.
Some operator clients left tax invoices unpaid after the ban, said Marlon Tseng, co-founder of payments company PagSmile. Layoffs remain undecided, although Tseng said PagSmile could not sustain its structure indefinitely without the market it was built to serve. PagSmile has left open the possibility of litigation, while holding off on announcing a compensation claim.
An unnamed executive at an international technology supplier said suppliers faced millions in tax invoices that would never be paid. An executive at an operator that recently closed in Brazil said companies had cancelled contractor agreements despite termination clauses, treating the ban as force majeure. The executive said workers faced a choice between pursuing money owed and preserving their prospects if the market reopened.
Companies must preserve records for five years and keep reporting to the Secretariat of Prizes and Betting under the provisional measure, a study by consultancy LCA for the Brazilian Institute for Responsible Gaming found.
The betting regulator held no study of a ban's impact less than 24 hours before the provisional measure's publication, it said in response to an information request. It stressed that the assessments were nonexistent, not secret. That same day, the Ministry of Justice placed the MP's drafting documents under seal for five years. The Ministry of Finance said the regulator had provided technical contributions on regulation and implementation, without specifying whether an impact study had been conducted.
Operators have grounds to seek repayment for licence periods lost to the ban and compensation for other losses, including lost profits, said José Frederico Cimino Manssur, a contracts and betting regulation specialist and partner at Natal & Manssur Advogados. The provisional measure prohibits licence-fee refunds, while the Attorney General’s Office has already turned down compensation requests. The Ministry of Finance said the licences were ended in the public interest and that operators were entitled to neither full nor partial repayment of the fee. At the STF hearing, Attorney General Jorge Messias argued that the state can stop an economic activity if it undermines fundamental rights.
A federal appeals court injunction restoring CDA Gaming's licence on 3 November was overturned at the government's request on 6 November, taking the Casa de Apostas brand offline again. Fux's suspension of lower-court lawsuits, requested by the Prosecutor General's Office, must still be upheld by the full STF and remains in place until it rules on four challenges to the measure. No date has been set for that ruling. The IBJR said it intended to ask Fux to order the government to provide the studies behind the ban.
Some of the 99 amendments tabled to the MP would retain sports betting but restrict online casino. Congress has until 4 March 2027 to vote on the measure.