Brazilian Betting Industry Pushes Back After President Lula Calls for Online Gambling Ban

Brazil’s regulated betting sector has reacted strongly after President Luiz Inácio Lula da Silva urged authorities to consider banning online gambling, comments that have drawn criticism from industry stakeholders who warn the move could drive players into the unregulated market.

The remarks were made during a national address delivered on Sunday to mark International Women’s Day, when Lula described gambling addiction as a growing social problem affecting Brazilian families. In his speech, the president portrayed online betting as a threat that drains household resources and harms families across the country.

“Although most addicts are men, the burden falls on women,” Lula said. “It’s the money for food, rent and children’s school that disappears on the cell phone screen.

“Gambling dens are prohibited in Brazil. It makes no sense to allow gambling to enter homes, indebting families through cell phones.

“Let’s work together, uniting the government, Congress and the judiciary, so that these digital casinos don’t continue to indebt families and destroy homes.”

The comments have sparked widespread concern within the country’s licensed betting industry, particularly because the regulatory framework governing online gambling was introduced under Lula’s own administration. In December 2023, the government formally regulated the sector through legislation that established rules for licensing, taxation and consumer protection. The legal market subsequently launched on 1 January the following year.

That regulatory framework included a variety of safeguards for players, among them a recently introduced nationwide self-exclusion system designed to help individuals limit their gambling activities.

Industry representatives say Lula’s remarks risk undermining investor confidence and damaging a newly regulated market that requires significant financial commitments from operators.

Ramiro Atucha, founder and chief executive of Atucha Strategic Advisory, described the president’s comments as “disrespectful” toward investors who have committed capital to Brazil’s licensed market.

Speaking on Monday, Atucha warned that such rhetoric could discourage future mergers and acquisitions in the sector. According to him, companies operating legally in Brazil must comply with extensive regulatory requirements, including strict identity verification procedures and technical certifications, while also bearing considerable financial obligations.

Operators seeking licences must pay a fee of 30 million Brazilian reais and face a significant tax burden, Atucha noted. In his view, it is unfair to criticize licensed companies that operate within these strict rules.

He also warned that banning regulated online betting would likely produce the opposite of the intended effect by pushing gamblers toward unregulated platforms.

“I struggle to believe that someone as smart as [Lula] will not know that the players are going to end up in the unregulated market,” Atucha said.

“All the problems they are listing are to do with unregulated operators, not with regulated operators.”

Legal experts have echoed these concerns. Udo Seckelmann, partner for Gambling and Crypto at Bichara e Motta Advogados, said Lula’s comments appear to reflect a misunderstanding of how the sector currently operates in Brazil.

According to Seckelmann, the government introduced regulation precisely because online betting had already existed for years through offshore and unlicensed operators.

“Online betting has existed for years through offshore/unlicensed operators; regulation under Law No 14,790/2023 and the Ministry of Finance’s ordinances – which occurred during his mandate and with his full awareness – was designed precisely to bring that existing activity under supervision,” Seckelmann explained.

“Prohibition would not eliminate the market – it would simply push it back into the shadows.”

Both Atucha and Seckelmann believe a ban on online betting is unlikely to materialize in practice. In addition to political resistance, they argue the measure could lead to significant economic consequences.

“In my opinion, the chances are limited,” Seckelmann said. “Reversing that system would require a new legislative process and broad political support, which currently seems unlikely.”

Atucha shared a similar view, emphasizing that the economic fallout could be severe if the government attempted to dismantle the regulated system it recently created.

“The backlash of that, first in stopping the tax collection and revenues, and second on lawsuits, is going to be huge, and it’s going to establish a very negative precedent for any company considering investing in Brazil,” he said.

The criticism has also extended to organizations representing professionals within the gaming sector. The Association of Women in the Gaming Industry (AMIG) issued a statement saying the president’s remarks caused “surprise and concern,” arguing that they demonstrated a “lack of understanding” of the industry.

In particular, the group expressed unease about the timing of the comments, which were delivered during a speech intended to celebrate women. AMIG also stressed that women play an important role in Brazil’s regulated betting industry, including in leadership positions and as key contributors to the workforce.

“For AMIG, this date is not just symbolic – it is a permanent reminder of the collective responsibility to transform structures, expand opportunities and ensure that women occupy leadership and decision-making positions in all sectors of society, including the Brazilian gaming and betting industry,” the organization said.

“Taking advantage of a moment that should be one of celebrating Brazilian women, to threaten a measure that could have a direct impact on working women who support their families ethically and with dignity cannot be acceptable under any circumstances or scenario.”

Lula’s latest comments come amid a broader pattern of attempts by his administration to tighten rules around the gambling sector, despite having overseen its formal legalization.

Since the market launched, the government has repeatedly sought to increase the tax burden on licensed operators.

Officials have focused on the industry partly as a potential source of additional revenue while attempting to address a budget gap of roughly 20 billion Brazilian reais. The shortfall followed the government’s unsuccessful effort to raise the financial transactions tax rate from 0.38 percent to 3.5 percent.

Earlier proposals to raise the gambling tax rate from 12 percent to 18 percent failed to gain approval. However, in late 2025 Lula approved a gradual tax increase that will raise the rate to 15 percent beginning in 2028.

The president’s recent remarks also echo statements previously made by other members of his administration. In July of the previous year, Fernando Haddad, Brazil’s finance minister, sparked controversy when he suggested he would support banning gambling if such legislation were introduced in the Chamber of Deputies.

The comments drew sharp criticism from the industry, particularly because the country’s gambling regulator, the Secretariat of Prizes and Bets, operates within Haddad’s own Ministry of Finance.

At the time, the National Association of Games and Lotteries accused Haddad of overlooking the central challenge facing the sector: illegal gambling activity. The Brazilian Institute of Responsible Gaming also publicly criticized the minister’s remarks, arguing that effective regulation—rather than prohibition—is the key to protecting consumers and controlling the market.

By fLEXI tEAM