Lula’s Pre-Election Gamble: Brazil’s Sudden Ban on Online Betting

Key points

• The provisional measure takes immediate effect, prohibiting all operations, advertising, and intermediation of fixed-odds betting and online casinos.
• Bettors must withdraw funds by October 5; operators must refund balances by October 14, with the state bank Caixa Econômica Federal stepping in if operators fail to comply.
• A separate bill will be submitted to Congress to establish criminal penalties of four to six years imprisonment for running or promoting betting, with fines for institutions processing payments.
• The ban requires congressional approval within 120 days to remain in force, creating significant legal uncertainty for the approximately 90 licensed operators.
• Lula compared the betting industry to 'cancer,' stating that it must be removed to prevent it from destroying families, while critics call the move 'populist' and 'hypocritical'.

Background

Online betting was legalized in Brazil in 2018 under President Michel Temer and expanded significantly during the administration of Jair Bolsonaro. In December 2023, Lula signed a law to regulate and tax the sector, and his administration blocked over 2,000 irregular sites. However, the industry has grown into a multibillion-dollar market, with the central bank linking it to rising household indebtedness. The current ban follows a period of intense public backlash, particularly during the FIFA World Cup, and comes amid a tight presidential race where Lula is neck-and-neck with Flávio Bolsonaro.

How outlets are covering it

Supporters, including Lula and the government, emphasize the severe social costs of gambling, citing addiction, suicide, and the destruction of family finances. They argue that previous regulatory measures were ineffective and that a total ban is necessary to protect vulnerable populations. In contrast, industry bodies like the National Association of Games and Lotteries (ANJL) and the Brazilian Institute of Responsible Gaming (IBJR) warn that the ban will eliminate thousands of jobs, reduce tax revenue by billions, and push consumers into unregulated illegal markets where they lack consumer protections. Flávio Bolsonaro, Lula’s main rival, labeled the ban 'populist, hypocritical, and politically motivated,' suggesting it is an electoral tactic. Football clubs, including Grêmio, warned that the loss of betting sponsorships could lead to insolvency for many teams, as betting firms paid 1.1 billion reais in 2025.

Why it matters

The ban represents a drastic shift in Brazil’s approach to a major economic sector, with potential implications for the country’s fiscal health, the football industry, and the legal landscape. It also highlights the intersection of public health, economic policy, and electoral politics in Brazil, as the government seeks to address widespread concerns over household debt and addiction. The move could set a precedent for how other countries regulate or ban online gambling, and its success or failure will depend on the ability to enforce the ban and manage the transition to a regulated or prohibited market.

What to watch

The government will submit an urgent bill to Congress to establish criminal penalties for betting violations. Operators and industry groups are expected to challenge the provisional measure in court, seeking the return of license fees and compensation for lost profits. The ban must receive congressional approval within 120 days to remain in force, and the government will monitor the transition to ensure that funds are properly refunded and that illegal markets do not expand. The outcome of the October 4 election will also influence the future of the ban, as the new administration may choose to uphold, modify, or repeal the measure.