Brazil Bans Online Betting Under Provisional Measure Signed by President Lula

Brazilian President Luiz Inácio Lula da Silva signed a provisional measure on September 25, 2026, prohibiting the operation, offering, intermediation and advertising of fixed-odds betting across the country. The measure covers both online sports betting and online casino games, and also applies to authorisations granted by states and the Federal District. It took effect upon publication, but must be approved by the National Congress within 120 days to remain in force.

The decision reverses the regulated online betting framework that began operating in January 2025, less than two years after the market’s launch. The government said the ban was intended to address household indebtedness and gambling-related harm. Finance Minister Dario Durigan said measures introduced to regulate the sector and protect families had not achieved the intended results.

Under the measure, licensed betting operators are prohibited from accepting new customer deposits from the date it came into force. Customers have until October 5 to request withdrawal of the balances held in their betting accounts. From October 6, betting websites and applications are scheduled to be taken offline. Operators must then consolidate account balances and provide the necessary information to banking partners to process refunds.

The refund process is scheduled to take place from October 9 to October 14. Operators must return customers’ remaining funds through their partner banks, including where a customer has not initiated a withdrawal within the initial period. From October 14, state-owned Caixa Econômica Federal is expected to facilitate the return of funds in cases where operators or their banking partners encounter difficulties completing the process.

The measure applies to fixed-odds betting, including sports betting and online games, but does not prohibit other lottery products authorised under separate legislation. The government’s announcement described the measure as covering the exploitation, offer, intermediation and advertising of fixed-odds bets, in both physical and virtual environments.

The government has also prepared a bill to establish criminal offences related to operating or promoting betting activity. The proposed penalties reported at the announcement include imprisonment of four to six years and a fine for those who run, operate or promote sports betting. Institutions that process betting payments would face proposed imprisonment of two to four years. The criminal provisions are part of a separate legislative proposal and are not the same as the provisional measure that immediately halted the regulated market.

The new restrictions follow a period in which Brazil developed a federal licensing and supervision system for online betting. Fixed-odds sports betting was legalised in 2018, and subsequent legislation expanded the framework to include online games. The government finalised rules for the regulated market in late 2024, with licensed operations beginning on January 1, 2025.

Operators entering the regulated market paid a licence fee of BRL 30 million for a five-year authorisation. With nearly 90 companies reportedly licensed, the decision has raised questions about the treatment of licence fees and investments made in reliance on the regulatory framework. Industry representatives have said they are preparing legal challenges and may seek reimbursement of licence fees and compensation for other losses.

The National Association of Games and Lotteries has indicated that it intends to challenge the measure in court. The association’s president said the compensation claim could include licence fees, material losses arising from industry investments and other damages. The industry’s legal position is expected to be tested through proceedings, and the government’s obligations concerning licence reimbursement or compensation have not been finally determined.

The provisional measure’s requirement for congressional approval creates a further legislative stage. Under the reported timetable, Congress has 120 days to approve the measure for it to remain effective. Until that process is completed, the order has immediate effect, while its longer-term status depends on legislative action.

The ban also affects the relationship between federal and state-level betting authorisations. The measure states that it applies to authorisations issued by states and the Federal District, extending the restrictions beyond operators licensed under the federal system. The effect on state lottery arrangements and any related legal disputes will depend on the application of the measure and subsequent decisions by the courts and legislature.

The government’s announcement linked the measure to a wider package addressing household debt. Alongside the betting prohibition, the administration announced a debt renegotiation measure and a bill proposing criminal penalties for activities connected with betting. The government described the package as a response to financial pressure on Brazilian households and the social effects it associates with gambling.

The immediate operational deadlines require operators to stop taking deposits, facilitate customer withdrawals and prepare for the closure of their platforms. The subsequent balance reconciliation and refund period will involve operators and partner banks, with Caixa Econômica Federal designated to assist with unresolved payments from October 14. The measure’s implementation and the handling of outstanding customer funds will therefore be central to the transition away from the regulated online betting market.

The provisional measure marks a major change in Brazil’s online betting regulation. Its immediate restrictions are in effect, while congressional consideration and expected legal challenges will determine how the ban is applied and whether it remains in force beyond the approval period.

By fLEXI tEAM