Brazil's online gambling ban leaves market facing four scenarios

Brazil banned fixed-odds sports betting and online casino games under Provisional Measure 1.394/2026, signed by President Luiz Inácio Lula da Silva on 25 September. The measure took immediate effect and is before the national Congress. Authorised platforms closed from 6 October, new deposits were blocked and advertising and sponsorship were prohibited.

The measure prohibits the operation, offering, intermediation and advertising of fixed-odds betting, including on sporting events and online games, throughout the country. It also covers operators based abroad that offer services to people in Brazil and extends to authorisations issued by the states and the Federal District. Other lottery modalities expressly permitted by law are excluded.

Under the implementation timetable, new deposits were blocked from 25 September and players could withdraw their funds voluntarily until 5 October. From the following day, betting sites and applications had to stop operating. Refunds of remaining balances were assigned to financial institutions, with Caixa Econômica Federal involved where repayments could not be completed directly.

On 6 October, the Brazilian Ministry of Justice confirmed that the previously authorised platforms had ceased operations and said about R$1.325bn was still to be returned to about 26.5 million players.

Vixio Regulatory Intelligence published an analysis of four possible developments, taking into account decisions by Congress and the courts. The first scenario is a permanent ban, with Congress approving the measure without substantial changes. Vixio considers this less likely than other solutions, citing consequences for tax revenue, investment and sports sponsorship and the risk of favouring the illegal market.

The second scenario is a reopening of sports betting while the ban on online casinos, including slots and other digital games, remains. Vixio describes this as a possible political compromise. The analysis cites the position of Flávio Bolsonaro and the Liberal Party in favour of a regulatory distinction between sports betting and online casino games, and says an agreement with centrist forces could allow sports betting to survive while significantly reducing the overall market.

The third scenario is a full restoration of the regulated market, if Congress rejects the provisional measure or lets it lapse without approving it within the constitutional deadlines. The previous framework under law 14.790/2023 would then apply again. Reopening would require further measures to address administrative effects of the ban period, including authorisations already issued, interrupted contracts and amounts paid by operators for licences.

The fourth possibility is intervention by the Supreme Federal Court (STF). Industry associations have asked the courts to suspend the effects of the provisional measure so that authorised operators can resume activity pending parliamentary decisions. Vixio says a general injunction could allow platforms and payment channels to be reactivated relatively quickly. The matter has been put before judge Luiz Fux, and the most relevant judicial decisions could come after the second round of the presidential election on 25 October.

The measure provides for existing authorisations to lapse within 30 days of publication, with a deadline of 25 October 2026, and does not provide for refunds of amounts already paid for concessions. For companies that paid R$30m to enter the Brazilian market, the prospect of a new authorisation procedure is one of the main economic and legal issues. Vixio says any restoration of the regulated system could require specific provisions allowing previous licences to be recovered without a second payment.

Congress has received 99 amendments to the measure, and it is scheduled to enter the urgency regime on 9 November. A final decision could come by the end of the year or slip to the first months of 2027. The issue is also linked to the presidential election: a change of leadership could influence Congress, and the composition of parliamentary majorities will determine whether the ban is maintained, amended or the previous authorisation system restored.

On employment, data from the national association of games and lotteries (ANJL) reported by Vixio indicates that about 51% of the 15,000 workers employed by authorised betting companies had already been dismissed or suspended. On enforcement, the Ministry of Justice said that between 25 September and 6 October, 13,241 illegal sites were reported for blocking and removal was requested for 3,552 pages, profiles, groups and channels used to promote unauthorised betting.

Vixio says that even with a full reopening, the Brazilian market would be unlikely to return immediately to previous conditions. Lost revenue, terminated commercial relationships, difficulty in recovering customers and the cost of legal disputes could accelerate consolidation, favouring operators with greater financial capacity.