Brazil’s Congress and Supreme Court weigh online gambling ban after Lula re-election

Brazil's Supreme Federal Court (STF) is due to examine constitutional challenges to Provisional Measure 1,394/2026, the measure that restricts online gambling, while the National Congress considers close to 100 amendments to it. The STF could grant an injunction suspending the measure's effects, which would allow licences to regain validity and operations to resume in part, according to the source. The mixed congressional commission has 13 senators and 13 deputies appointed, with alternates, but has not yet been formally installed or chosen a president and rapporteur.

The challenges were filed by sector bodies including the National Association of Games and Lotteries (ANJL) and the Brazilian Institute of Responsible Gaming (IBJR), as well as football clubs. Minister Luiz Fux, the rapporteur, had said he would rule once the electoral process concluded. The arguments cited are breach of legal certainty, contract disruption, the risk of large-scale dismissals and the likely migration of players to the illegal market. Operators had paid R$30m for each five-year authorisation and set up additional reserves.

The interruption of more than 20 days produced estimated losses of R$1,200m in revenue for operators, while the state forwent more than R$400m in direct and indirect taxes, according to sector estimates cited in the source. The ordinary deadline to analyse the measure expires on 23 November; from 9 November the parliamentary agenda is blocked until the text is voted. A 60-day extension is possible.

Among the amendments, several propose keeping only sports betting, preserving sponsorship contracts already signed with clubs and setting transition periods. One of the most mentioned would allow the use of brands on shirts and stadiums linked to prior agreements for 24 months. Another would respect authorisations until the end of their original terms, without the possibility of renewal.

The Superior Electoral Court confirmed the re-election of Luiz Inácio Lula da Silva with almost 52% of the vote against just over 48% for Flávio Bolsonaro, a difference of a little more than 4.3 million ballots. During the campaign Lula's team presented the election as a plebiscite for or against betting platforms, and the president said the prohibition was irreversible and that the country must "acabar con esta plaga", citing protection for indebted families.

With the Liberal Party, the opposition, as the largest bench in both the Chamber of Deputies and the Senate, the source describes the scenario as more adverse for the executive. Even if the government keeps the prohibition, approval of the text in its original terms before the deadline is described as unlikely.

Clubs in the Brasileirão Serie A received more than R$1,000m in sponsorships linked to the sector in 2025. Teams including Flamengo, São Paulo and Fluminense used shirt space to question the measure under slogans such as "Prohibir no es proteger". Flamengo joined the court actions before the STF, and its president maintained dialogue with and expressed support for the defeated candidate, Flávio Bolsonaro.

For operators the uncertainty is twofold: licences suspended without reimbursement of the amounts paid, and the possibility that a return would require a new authorisation application. The most likely legislative scenario is described as a partial reopening limited to sports betting, with tighter advertising and responsible-gaming restrictions.

Udo Seckelmann, a partner in the gambling and cryptocurrency practice at Bichara e Motta Advogados, told the source that the betting sector would keep growing in Brazil despite important challenges, and that Lula's re-election did not necessarily mean a change of direction for the industry, with the composition of Congress expected to play a relevant role. He said Brazil already has an established regulatory structure and that the next step is consolidation, with clear rules, legal certainty and an environment that encourages investment. He added that he was optimistic about the sector's future and that the most efficient path is to improve regulation, strengthen the fight against the illegal market and ensure conditions for authorised operators to operate sustainably.