Key Points
- Provisional Measure Number 1,394 was signed by President Lula on 25 September and immediately banned all fixed-odds betting and online casinos in Brazil.
- Eighty-five licenses were granted at R$30 million each; however, the Brazilian government has said there will be no reimbursement of the money.
- ANJL and IBJR have filed a joint request to the Supreme Federal Court of Brazil on 28 September, seeking suspension of the measure from Justice Luiz Fux.
Brazil Dismantles the Betting Market Its Own President Built
The individual who signed the legislation that created Brazil’s regulated gambling industry is the very same person who now signed the legislation which will shut it down. On 25 September 2026, President Luiz Inácio Lula da Silva affixed his signature to Provisional Measure 1,394, banning the operation, provision and advertising of fixed odds gambling throughout Brazil, encompassing sports betting and online casinos.
It is President Lula himself who signed into law Legislation 14,790 in December 2023, which established the regulatory regime through which Brazil’s huge gambling market would come under federal regulation. A total of 85 licences have been handed out at a cost of R30million each, for a total of R2.55 billion entering the coffers of the Brazilian government.
The Wind-Down Clock Operators Are Now Racing Against
The transition framework is precise and tight. New deposits were prohibited immediately on 25 September. Players have until 11:59 pm on 5 October to withdraw their balances. Betting sites and apps go dark from 6 October, two days after the first round of voting. Advertising and sponsorship material must be removed by 5 October. Banks must return remaining balances between 9 and 14 October, with state-owned Caixa Econômica Federal stepping in for cases where operators’ banking partners cannot complete transfers. Operators that fail to secure player funds and submit refund lists to their banks within two days of going offline face a daily fine of R$200,000.
At the announcement in São Paulo, Lula described the betting industry in stark terms, likening its spread to the early days of crack cocaine in Brazil. “I made the decision to take a tough, drastic and necessary measure,” he said. “It’s like a tumour: either we remove it or the tumour kills us.” Finance Minister Dario Durigan said the government had made repeated efforts to regulate the sector, but the measures had proven insufficient in containing addiction and household debt. Durigan confirmed that roughly R$60 billion flows from Brazilian families to legal betting companies each year, a figure the government presented as evidence of systemic financial harm.
A Separate Criminal Bill Adds Teeth the Measure Itself Cannot
The provisional measure banning betting cannot itself establish criminal penalties; the Brazilian Constitution bars provisional measures from creating criminal law. That is why the government submitted a separate bill to Congress alongside the measure. Under that proposed legislation, operating or exploiting fixed-odds betting carries four to six years in prison. Advertising betting, recruiting players, using personal data to recruit customers, facilitating betting payments, and providing betting applications each carry two to four years plus fines. The government also stated that influencers who profit from promoting illegal betting would fall within the bill’s scope.
What the Tax Figures Actually Reveal?
The government’s public health justification sits uncomfortably beside its own fiscal data. Brazil’s federal tax authority, the Receita Federal, collected R$8.747 billion in taxes linked to betting and gaming activities between January and July 2026, a 76.86% increase year-on-year, a figure that encompasses both licensed private operators and the state-run Caixa lottery. With five months of the year still remaining at that point, the sector was tracking toward roughly R$16 billion in annual tax receipts. A portion of those proceeds funds education, health, social security and sport, the same sectors the government says it is protecting by shutting the market down.
Analyst firm Regulus Partners was pointed out for the contradiction, noting that “suddenly banning a product which is specifically and directly taxed clearly does threaten federal tax revenue and no legally required justification or mitigation has been made public.” Regulus put the probability of a permanent ban at just 5%, and an 85% likelihood of a multi-month blackout, its analysts noting that the scale of industrial damage from such a blackout “should not be underestimated.”
Listed Operators Begin Counting the Damage
The financial fallout for listed companies has been immediate. JPMorgan identified Evolution, Allwyn, Entain and Flutter among the most exposed. Allwyn, which holds a 36.75% stake in Kaizen Gaming, operator of Betano, said its previously communicated adjusted EBITDA margin guidance of approximately 37% for 2026 would no longer be applicable if the measure remained in force. Entain reconfirmed its FY26 underlying EBITDA guidance of £910 million to £960 million but said it now expected to land at the lower end of both ranges. Flutter said the shutdown, if maintained through the year, would reduce its 2026 revenue by approximately US 70 million and adjusted EBITDA by approximately US20 million.
Better Collective, the iGaming affiliate group, felt the announcement fastest in its share price, falling around 25% in Stockholm trading on Monday, 28 September. The company cut its 2026 revenue growth guidance to 3-8% from a previous forecast of 7-12%, and suspended its share buyback programme with immediate effect. Kambi CEO Werner Becher said Brazil represented “a low single-digit percentage of Kambi’s revenue” and that the company would comply with the order, while expressing his belief that “a well-regulated betting market, with strong consumer protections and effective oversight, provides the best framework for protecting players.”
The Black Market That Was Already Waiting
Critics, including Brazil’s own regulated industry, argue the government’s logic has a fundamental flaw. Regulus estimates that Brazil’s black market already turns over more than $25 billion annually, comprising Jogo do Bicho, crypto-led gambling and illegal slot machines. That shadow infrastructure does not require licensed operators to survive. It just needs them to disappear.
Flutter highlighted that the estimated illegal share of Brazil’s online betting market had actually fallen from 41-51% in 2025 to 38-44% in 2026, a measurable sign that regulation was starting to work. One immediate reversal of that progress was the industry’s core concern. ANJL stated that an estimated 31 million Brazilians are active on licensed platforms, and that those bettors “will simply change location to uncontrolled environments that accept minors and credit cards.” The association noted that, under the regulated market, platforms had already processed 1.2 million self-exclusion requests and blocked 3 million Bolsa Família beneficiaries from gambling. No equivalent protections exist in the illegal market.
Industry Takes the Fight to the Supreme Court
On 28 September, ANJL and IBJR filed a joint petition at Brazil’s Supreme Federal Court, asking Justice Luiz Fux to suspend the provisional measure’s effects until Congress acts on it, either by converting it into law, rejecting it, or letting it lapse. A separate constitutional challenge is also being prepared, which would argue that the measure violates free enterprise principles and that the existing betting framework is constitutional. Betano separately confirmed it is “preparing legal action to protect its rights in Brazil in consideration of its five-year licence to operate.” Attorney General Jorge Messias told CNN Brasil the government was “completely confident” in the measure’s legal basis and “fully prepared to respond to any challenges that may arise.”
Congress has 120 days to vote on the measure; that window extends further if Congress is in recess, potentially stretching to early March 2027.
Expert Analysis: The Credibility Problem Lula Cannot Regulate Away
Here is the argument nobody in government is willing to answer directly. Eighty-five authorisations were issued by this same government under a five-year federal licence framework. The regulated sector processed 1.2 million self-exclusion requests, actively blocked welfare recipients from gambling, and generated billions in tax receipts that funded public policy. In short, regulation was producing results. Flávio Bolsonaro called the ban “populist, hypocritical and politically motivated,” and industry groups have said it was “aimed solely at perceived electoral gain.” Whether or not the motive was electoral, the practical outcome is clear: Brazil dismantled a functioning regulatory system on a 10-day timeline, with no compensation and no consultation with industry stakeholders.
LCA Consultoria’s study for IBJR estimated that a total ban could put between R58 billion and R73 billion in tax revenues at risk between 2027 and 2030, based on the scenario where 80-100% of regulated demand migrates to illegal operators. That projection is a scenario estimate, not a guaranteed figure, but the direction of travel is not seriously disputed. We think the lasting damage here is not measured in GGR or EBITDA. It is measured in something harder to rebuild: the signal Brazil has now sent to every operator weighing regulatory risk in an emerging market. A government that writes the rules, collects the fees, and then tears the framework apart before the ink dries on the licences is not a government that any serious capital allocation committee will treat as a safe regulatory partner. That reputation will outlast whatever Congress decides in 120 days.
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