Lula’s re-election leaves Brazil’s gambling policy facing four possible paths

Chance of court challenge to PM succeeding

5%

Chance Lula wins simple majority to validate ban

5%

Likelihood of amended compromise PM

10%

Likelihood PM and licences lapse

80%

Brazil's gambling sector faces uncertainty after President Lula's re-election on 25 October, according to Regulus Partners. The research firm said the result reduced the prospect that the Provisional Measure banning online gambling in Brazil would be reversed, and set out four possible policy paths.

According to Regulus Partners, whatever optimism remains for the licensed sector now rests with Congress. The research firm noted that some political observers consider it unlikely that lawmakers will approve the ban as the law demands. Regulus added that a Senate and Chamber of Deputies leaning right, particularly from next year onward, invites broad gridlock. In the firm's view, that gridlock will almost certainly trap gambling policy in high-stakes lawfare, while the licensed blackout and the black market carry on.

Under the first scenario, Judge Fux would either invalidate the PM or put it on hold until Congress lends its support. Regulus judged this outcome improbable, assigning it a 5% chance of success. The analysts also stressed that a ruling in the sector's favour would not by itself bring licences back.

Regulus also saw a roughly 5% likelihood that Lula could gather a simple majority in the Senate and the Chamber of Deputies, which would confirm the ban and keep the licensed blackout in place until fresh policy is devised. The firm argued that, given the gridlock in Brazilian politics, reaching that point could stretch over years.

A third option would see an amended compromise PM adopted as law that heavily restricts the licensed market, for example by prohibiting or limiting influencer advertising, slots and crash games, and possibly banning casino outright. Regulus put the likelihood at about 10%, saying the path supposes Congress is in a mood to find compromise rather than bicker, and that one-line amendments would need to be turned into actionable policy.

Regulus put the most likely outcome at 80%: the PM falls away and the licences fall with it, leaving the sector without a settled framework. The firm expects further drawn-out lawfare to settle this scenario. Should Lula's allies make real headway in court actions against the post-licensed sector over player losses, the industry would in all probability be buried, notwithstanding the absence of legal clarity around the ban. On the other hand, if the industry makes headway in claims over losses stemming from a presidential measure that was effectively struck down, the government could be pushed to reopen the market, accompanied by the usual talk of restrictions and of pursuing bad actors.

Regulus described provincial licensing regimes filling the federal gap with a more attractive framework as the sole slim prospect it can identify. The firm also said that each of the four options is considerably messier than the situation that a Flávio Bolsonaro presidency could have produced.