KTO Brazil Shutdown: Betting Ban Puts Future at Risk

Key Points

• LinkedIn posts are saying that KTO let more than 200 staff go back on 8th October, but the company’s founder is still insisting the reports of its demise are greatly exaggerated.
• The operator had quit Peru and Chile earlier this year in a bid to chase a Brazilian licence, leaving it with no fallback option if things didn’t go according to plan.
• KTO’s federal licence is due to expire on 25th October, just as Brazilians head to the polls in a tight presidential runoff.

A Former Betting Site Now Sends You to a Government Page

Pop a Brazilian address into your browser and you’ll find yourself on brasilsembets.gov.br, a government ” warning page”. Just a few weeks ago that same domain was taking bets from millions of Brazilians under a full federal licence. Not a peep about the change from the company, it took a bunch of former employees to break the news on LinkedIn.

Their posts suggested that the company had let go of more than 200 people on 8th October. Anthony MacKay, the head of affiliates, put it in pretty blunt terms saying “the recent developments in Brazil have unfortunately led KTO Group to close its doors.” You can tell he was hurting as he wrote that, no hiding the pain.

The company’s founder and CEO, Andreas Bardun, has a very different take on events though. He’s said that “the reports of KTO’s death are greatly exaggerated”, without offering a single shred of detail to back that up. In a previous chat with NEXT.io he did admit that there had been a lot of redundancies, and that some staff would be sticking around.

It All Came Down to One Signature

Things started to go wrong on 25th September, when President Luiz Inácio Lula da Silva signed Provisional Measure 1,394/2026. This order banned fixed-odds sports betting and online casino games nationwide, just 9 days before the first round of voting. Not long after that, Lula was saying that betting was “like a cancer”, and it’s not hard to see why the government would be keen to get rid of it.

There were 85 licensed companies in Brazil before the ban, each one paying 30 million reais for a 5-year permit. But after Lula signed the order, all of those sites went dark, and are due to lose their federal authorisations on 25th October.

The government’s case against the industry is built around some pretty eye-watering numbers though. A Comsefaz fiscal bulletin, based on central bank Pix data, reckons that families lost 62.5 billion reais to betting. And that was just in net terms. Health researchers have come up with an even bigger figure, a study from the IEPS health institute put the yearly social costs at around 38.8 billion reais. That’s not just a measure of money lost, it’s an estimate of the impact on mental health, suicide rates and unemployment too.

KTO Never Went to Brazil as a Plan B – it Was the Only One

Created in Malta in 2018, KTO expanded into Brazil in 2019 to build up local presence. In August 2024, the operator withdrew from Peru and Chile altogether. Bardun commented back then that the company “will operate only in fully regulated markets.”

For almost eighteen months, this decision seemed to be one of the best in the industry. KTO opened offices in Porto Alegre and Santa Cruz do Sul, both located in Rio Grande do Sul. At the moment the regulation came into force on 1 January 2025, the operator became one of the 14 companies that received a licence.

Bardun called the licence “like a stamp of approval on how disciplined we are as an organisation.” Furthermore, he made a bold statement saying that he wants to make KTO one of the top three Brazilian brands. According to the estimate by Blask, cited by app2top, its 2025 gross gaming revenue was approximately US$54 million – a rather small business.

Compared to the diversified companies that compete against it, KTO suffered more losses without getting any serious damage elsewhere. For instance, Flutter is expected to lose nearly $70 million of 2026 revenue, while Entain cut the forecast of its 2026 online net gaming revenue growth to 4% to 6%. According to the same report, none of the operators will receive any compensation for their licences. Both companies will manage to withstand the loss without difficulty, while KTO does not have another market to earn anything.

World Cup Popularity Accompanied by Regulator’s Notice

Just three months before the ban, KTO faced its largest audience. The company was among bet365 and Betnacional that sponsored YouTube coverage of all 104 World Cup matches on CazéTV. The match between France and Spain in the semi-final had the maximum number of viewers, reaching 24.2 million devices at a time.

This huge audience was unwanted attention in the election year. Consumer Protection Authority Senacon initiated a preliminary investigation on 24 June, referring to the promotion of KTO on the Uruguay vs. Cape Verde match. Two days later, advertisement regulator Conar recommended suspending advertisements of all three brands.

On 30 June, the Secretariat of Prizes and Betting suspended the ads and initiated an administrative procedure.

Thousands of Jobs Lost, and a Much Bigger Problem

KTO’s layoffs just scratch the surface of a much deeper issue within the sector. With thousands already losing their jobs and thousands more put on collective leave, it’s a worrying trend that shows no signs of slowing down. The ANJL trade body says there have been more than 3,500 job losses since this all started, and NEXT.io’s analysis of the situation suggests that by the end of the 90 days, the number could be as high as 5,600.

And then there are the suppliers, folks who rely heavily on Brazil’s licensed market to keep their businesses afloat. Pay4Fun director Ari Celia says “it’s just not sinking in”, his company relies on iGaming for a whopping 95% of its revenue. Meanwhile Kambi says Brazil only accounts for a tiny fraction of its income.

Lula’s response to it all is to tell people to sort it out for themselves, not exactly the most reassuring message.

Courts, Congress and the Ballot Box, a Recipe for Disaster

KTO’s not going down without a fight though, they helped found the IBJR, which has joined forces with ANJL and Anseja to challenge this new law in the Supreme Court. But so far, the courts haven’t been able to do much to halt the situation. Stake managed to win an injunction just for a day, but it was overturned soon after. And even if operators can convince the courts to take their side, the Finance Ministry has an ordinance that’s going to make life very difficult for anyone who gets their licence revoked.

The lawmakers are getting in on the act too, there are dozens of amendments floating around, and at least 7 of them would restore sports betting while keeping casinos off the table. They have until 23 November to get it all sorted out.

But it may not be the courts or the politicians who come up with the final solution, it may be down to the ballot box instead. Flávio Bolsonaro is currently in the lead in the polls, and if he wins, he’s going to have a real say in the matter. And as luck would have it, KTO’s licence is up for renewal on the day of the runoff, 25 October.

Expert Analysis: KTO Got it Wrong, and the Rulebook Changed

We think KTO did everything they were supposed to do, but in the end it made no difference. They voluntarily quit two markets, paid out millions, hired local staff and even co-founded a lobby group. But then the President goes and changes the rules on them out of the blue, and that’s that. This new ban is a massive U-turn, and it’s not something that should be glossed over, no matter what you think about gambling harm. The truth is, it is a real problem, and that’s because studies have shown that around 2 million Brazilians are hooked on betting platforms.

But did the government do its maths right? According to AP, the President weighed up the risks of a partial ban before deciding to go all out and ban it completely. And all this was done just days before the vote. If Congress does do a U-turn and decides to soften this new ban, it may be a case of “greatly exaggerated” post from Bardun proving right. The problem is, we don’t think KTO can just pick up where it left off, even if Congress does decide to give them a second chance. Trust has been broken, because every operator now knows that a Brazilian licence is basically worthless.