Brazil Betting Trade Bodies Ask Supreme Court to Halt Lula’s Ban Amid Constitutional Challenge

Brazil’s National Association of Games and Lotteries (ANJL) and the Brazilian Institute of Responsible Gaming (IBJR) have asked the country’s Supreme Federal Court (STF) to immediately suspend Provisional Measure 1.394, which prohibits the operation of online betting platforms in Brazil.

The organisations submitted a “Statement on Supervening Fact” to Supreme Court Justice Luiz Fux in connection with three direct actions of unconstitutionality concerning Brazil’s regulated betting framework. Acting as amici curiae, or “friends of the court”, the two trade bodies argue that the government’s decision to prohibit the sector lacks the constitutional justification required for a provisional measure and could inflict irreversible economic and legal damage.

A central element of their argument is that the government has failed to demonstrate the necessary urgency. ANJL and IBJR maintain that there has been no sudden development in the betting market that would justify immediate executive intervention. Data from Brazil’s Secretariat of Prizes and Bets, they argue, actually indicates that betting activity has not experienced the extraordinary expansion that might warrant emergency measures. According to the figures cited by the organisations, the financial volume of the sector declined by 42% between October 2025 and June 2026.

The trade bodies also point to what they regard as an inconsistency in government policy.

During the legislative process that produced Law 14.790/2023, the federal government supported the creation and regulation of the betting market and opposed certain proposed restrictions on access by vulnerable consumers. In their view, the subsequent decision to eliminate the regulated sector represents a major policy reversal unsupported by an adequate technical justification.

Concerns over legal certainty

ANJL and IBJR argue that the provisional measure threatens legal certainty because the federal government itself established, licensed and supervised the regulated betting market from January 2025.

Licensed operators reportedly paid BRL30 million (approximately $5.7 million) each for their authorisations and subsequently invested substantial sums in technology, security, customer support and responsible-gambling systems. The organisations argue that terminating those authorisations abruptly, without a transition period or compensation, undermines legitimate expectations created by the government.

They contend that private companies were encouraged to enter the Brazilian market under a regulatory structure established by the state, only to have the economic value of the licences subsequently removed.

Tax and public-finance implications

The organisations also challenge the provisional measure on fiscal grounds. They say it does not contain the budgetary impact assessment required under Article 113 of Brazil’s Transitional Constitutional Provisions Act.

According to figures cited in their filing, the regulated betting sector generated approximately BRL9.95 billion in federal tax revenue during 2025, alongside BRL2.5 billion in grants and BRL95.5 million in inspection fees.

ANJL and IBJR argue that eliminating the regulated market would therefore not only remove future government revenue but could potentially create additional public expenses. Among the possible costs they identify are employment-related liabilities arising from the abrupt closure of businesses.

Industry warns of expansion of illegal betting

Another major argument concerns consumer protection. The organisations warn that banning licensed operators could push bettors towards unregulated websites.

They cite studies estimating that illegal platforms already account for between 41% and 51% of Brazil’s betting market. Unlike licensed operators, these sites generally do not have to implement robust customer-identification procedures, deposit restrictions, responsible-gambling measures or effective self-exclusion systems.

The organisations also highlight weaker anti-money-laundering controls and fewer restrictions on advertising within the illegal market. They therefore argue that the ban could have the opposite effect to its stated consumer-protection objectives, particularly by leaving people experiencing gambling-related problems with fewer safeguards.

ANJL and IBJR have asked Justice Fux to suspend Provisional Measure 1.394 in its entirety while Congress considers the measure or until the Supreme Court reaches a decision on the constitutional challenges.

As an alternative, they have requested that the deadlines contained in the measure be extended by at least six months. They have also asked the court to prevent federal authorities from freezing assets, revoking licences or confiscating funds while the requested suspension remains in force.

Anseja launches separate challenge

The National Association for the Legal Security of Games and Betting (Anseja) has separately approached the Supreme Court with its own constitutional challenge to the provisional measure.

Anseja is seeking an urgent injunction preventing the government from implementing the measure. Like ANJL and IBJR, it argues that the government has not demonstrated the urgency required for the use of a provisional measure and says the legislation contains several constitutional and procedural defects.

The organisation particularly objects to the immediate closure of betting platforms and the cancellation of bets already in progress, describing those consequences as the first irreversible effects of the government’s action.

Anseja also argues that the measure improperly addresses matters that cannot constitutionally be dealt with through a provisional measure. Among the issues it raises are the absence of a proper fiscal-impact assessment, provisions concerning financial-asset seizure and provisions that could potentially turn certain forms of advertising into criminal offences.

The association further argues that the government’s decision conflicts with fiscal-responsibility requirements because it could affect public revenues, concession arrangements and large financial flows within the regulated market.

In addition, Anseja says the government failed to respect the principle of legitimate expectations. Because the state created and regulated the betting framework and issued licences to operators, the association argues that those authorisations cannot simply be eliminated without appropriate legal procedures and compensation.

Anseja is therefore asking the Supreme Court to suspend the provisional measure immediately, recognise its formal and substantive constitutional defects, and preserve the validity of existing betting authorisations until the court reaches a final decision.

By fLEXI tEAM