Brazil’s betting ban leaves market future with Supreme Court and Congress

Brazil's federal betting licences held by 85 operators expired on 25 October 2026, the same day President Lula da Silva was re-elected with 51.79% of valid votes, according to a report. The future of the market now rests with the Supreme Federal Court (STF) and Congress, the report said.

Lula issued Provisional Measure (MP) 1,394/2026 on 25 September, nine days before the first round of the election, the report said. The measure suspended the sector, and the 85 federal licences expired with no refund of the BRL30m (€5m) licence fee each company had paid, according to the report.

ANJL's figures show that by early October the layoffs had passed 3,500, and it expects 5,600 job cuts in the first 90 days, a total that takes in affiliates, suppliers and payment providers, the report said.

Based on H2 Gambling Capital estimates, the IBIA projects that around 60% of regulated market activity, equivalent to roughly BRL25bn, could move to unlicensed operators without a legal alternative, lifting the illegal market from around BRL17bn to approximately BRL42bn, the report said.

Luiz Felipe Maia, a founding partner of MYLaw Advogados, told the report that undoing the ban soon looks improbable to him, since the political price would be steep. His words: "Supporting the ban and supporting every consequence of the ban are different things." In his view, three tracks are running at once: the STF weighing the measure's constitutional boundaries, Congress settling its legislative future, and the government putting forward a regulatory fix, the report said. He also pointed out that the sitting Congress, before the newly elected lawmakers are seated, is already able to amend, approve or reject the measure.

Thomas Carvalhaes, CEO of TC Advisors, said: "It is impossible to deny that we have been suffering a series of hard, unfair, wrong and unethical blows from our government, the same government that legalised and regulated the sector." He said Lula's victory "leaves us perplexed" but that the make-up of the new Congress brings "a certain positivity", and he argued the industry should work more closely with the government.

The National Association of Games and Lotteries (ANJL) issued a statement welcoming Lula's re-election and expressing the hope that "dialogue will be restored and the democratic rule of law will prevail", according to the report. The association also said it was ready to join Congress and the executive in strengthening the regulated market and in combating illegal betting operators, which in its words "unfortunately dominated the country during the ban on legal companies".

The International Betting Integrity Association (IBIA), a defender of the regulated market, concedes that advertising, consumer protection and operator oversight "needed further attention", the report said. In an opinion piece for NEXT.io, Fellipe Fraga of Stellar Gaming wrote that "the tone of our advertising and the way we competed was wrong" and that the industry "left an open goal for anyone who wanted to take a shot".

Marcos Sabiá, former CEO of Galera Bet, described the ban as "illegal and tremendously misguided" but said it "only had room to happen because the political world saw some dividend in banning betting among the almost 80% who disapprove of it", according to the report. He said winning society back would be "a matter of survival" and require "a disciplined, sincere communication effort, costly in several respects".

Antonio Forjaz, head of LatAm at Sportingbet, said customers must set up control tools and that accounts are monitored daily by a "Markers of Harm" model, with human review of higher-risk cases that can lead to deposit limits, blocks or account closure, the report said. He said responsible gambling "is a systemic agenda that requires the participation of other sectors, such as financial institutions and credit companies".

Ana Clara Barros, a lawyer and vice-president of AIGAMING, told the report that the episode should serve as a wake-up call, and that gambling is under growing scrutiny across the globe, not only in Brazil. Her words: "We cannot demand to be treated as a mature and responsible sector while, for example, objectifying women at trade shows, glorifying excess and turning professional events into endless parties." She added that no final decision has been reached and that roughly 130 days remain, until early March 2027, before the MP lapses.

Laura Morganti, a lawyer and finance director of Sindibets-SP, São Paulo's online betting employers' union, said the sector faces "significant wear and tear in public perception" and recognised "there is significant work to be done to rebuild society's trust", according to the report. She pointed to a paradox in which the MP's advertising restrictions may also cover responsible gambling campaigns, and said the sector does not necessarily expect a return to the previous scenario without adjustments.

Witoldo Hendrich, president of Abrajogo, said the government is already negotiating the MP's reversal, whether with the STF, the Federal Court of Accounts (TCU) or Congress, because it "dramatically needs the resources that come from gambling", the report said. He said: "Taxing betting is essential to the current government." If the market reopens, he expects "somewhat more restrictive" rules, with limits on marketing and potentially the removal of controversial games such as Fortune Tiger, known in Brazil as "Tigrinho".

Hiago Piau, president of the National Association of Municipal and State Lotteries (ANALOME), said Lula will not take the initiative to reopen the market but will not work hard to stop Congress from doing so, as he will not easily give up such a large source of revenue, according to the report. Piau expects Congress to let the MP lapse because lawmakers "will not want to discuss this issue and take a direct part in a possible solution".

Trading on the election at Polymarket exceeded $200m, and the platform put Flávio Bolsonaro at an 80% chance of victory on Saturday 24 October, then switched to Lula on Sunday night, the report said.

Within under two years, the report said, Brazil licensed over 80 operators and set standards for customer identification, monitoring of suspicious bets and self-exclusion. IBIA scored the country's framework at 77 out of 100, above Portugal's 68 and close to Great Britain's 86, according to the report. Hendrich said investors require "a guarantee that agreements will be honoured, a guarantee of stability, a guarantee of legal certainty", the report said.