Lula legalised Brazil's betting market, then campaigned on killing it. Our assessment is that the ban will be softened, not reversed

Updated 26 October 2026

Brazil's betting market was legalised and taxed under Luiz Inácio Lula da Silva. It was banned under him too.

His government signed Law 14.790 in December 2023 and sold 85 five-year licences at R$30 million each, which comes to R$2.55 billion, according to the Ministry of Health's own account of the ban. Twenty-one months after the first licences took effect, his government extinguished all of them by provisional measure. MP 1.394 was signed on September 25, nine days before the first round of the election. It refunds none of the licence fees.

Lula won the runoff on October 25 with 51.79% of the valid vote, according to the TSE. The government that built the market and the government that banned it are now the same government, with four more years in office.

Our assessment: the ban was a late electoral decision layered on top of a real public-health problem. It was not a long-planned policy. We think the more likely outcome is a ban that Congress narrows by keeping restrictions on online casino and advertising while leaving a route back for licensed sports betting. We do not expect the ban to be upheld as written, or to be quietly dropped.

We put a narrowed regime at about 50%, the MP converted largely as written at about 30%, and a lapse without replacement at about 20%. We would be wrong if the joint committee is installed quickly and reports the text unchanged before November 23, or if the Supreme Court suspends the MP.

The contradiction is documented

Lula's own platform did not promise a ban. According to g1, which reviewed the coalition's plano de governo filed with the TSE, the programme promised to keep "mechanisms to control excessive spending on online betting" and to expand care for people with gambling problems. That is the language of regulation, not prohibition.

The MP's timing and the campaign then fused. Lula announced the signing on X on September 26 and called the measure "tough, drastic and necessary". The next day he posted: "From now on, there are no more bets." On October 24, the eve of the runoff, he used the issue against his opponent, saying on X that the Bolsonaro family had opened the door to "Tigrinho" games and bets.

Lula has denied that the ban was electoral. In an October 1 interview on the Flow podcast, as reported by O Tempo, he said he had not grasped how serious the problem was. He also said: "because we have an election, I really ended it, because if I don't end it and don't win the election, it would never end." That quote comes from a media report. It is not a transcript we have verified. Even so, it describes the election as the trigger in the president's own words.

The fiscal side of the contradiction is in the government's own filing. Congress's summary of the MP says the executive itself "estimates a reduction in tax revenue and supervision fees". The Finance Ministry built the 12% gross-gaming-revenue levy, the licence fees and the monthly supervision fee (R$54,000 to R$1.944 million per operator, under Law 14.790's annex). Its Secretariat of Prizes and Betting then had to write the wind-down rules. The finance minister who signed the MP is Dario Durigan, not Fernando Haddad, who co-signed the 2023 law.

Our reading: the U-turn is the health and social wing of the government, plus campaign strategy, overriding the revenue wing. This is an inference from who signed and spoke at the launch. The Justice and Health ministers presented the measure, and the Finance Ministry's role was limited to implementing it. Nobody in government has described the decision that way.

Who gains and who loses

Lula and the PT campaign. They wanted a clear, popular contrast in a tight race. Their leverage was the power to issue a provisional measure that takes effect immediately. The evidence is the timing, the X posts and the shelving of the regulatory approach in the plano de governo. They have already collected the electoral benefit. Our inference: the incentive to fight hard for the full text is now weaker than it was on September 25. But Lula has staked his credibility on "no more bets", which makes an open climbdown costly. Expect him to defend the ban rhetorically and let Congress do the softening.

Health and social ministries. Health Minister Alexandre Padilha cited more than 1.3 million self-exclusions and a study estimating the social cost at R$38.8 billion a year. Those are his figures, and they have not been audited. The ban is their policy win, and they are the actors most likely to resist a sports-betting carve-out.

Finance (Fazenda/SPA). Finance loses outorga income from future licences, the GGR levy and the supervision fees, and keeps the cost of enforcing against the offshore market. The MP did give it some protection. Firms keep their tax obligations, the SPA keeps its powers over past conduct, and Ordinance 3.005 sets December 15 as the deadline to settle obligations. Not refunding the R$2.55 billion avoids a fiscal hit, but it is also the MP's greatest legal exposure (see the STF section below).

Congress. The Centrão parties hold the votes, and the parties that passed Law 14.790 have a stake in their own framework. The 99 amendments filed (five withdrawn) cluster around a narrower ban: Dr. Hiran's amendment 38 keeps sports betting, and Julio Arcoverde's amendment 28 bans only unlicensed operators. The presidents of the Chamber and Senate hold the clock, since the joint committee has not been installed.

Licensed operators and their associations. They want reinstatement and compensation. Their leverage is litigation, jobs and the argument that a ban hands the market to offshore sites. Their weakness is that they are politically toxic in an election year. The evidence is in the operator section below.

Illegal and offshore operators. They benefit structurally. They lose licensed competitors and their advertising, and they pay no 12% levy. Against that, the MP adds Pix rejection rules, payment-processing bans, site blocking through Anatel and CGI.br, and an inter-agency enforcement committee. The Justice Ministry said 1,367 sites and profiles were taken down the day before signing. Our assessment: blocking will raise their costs but will not eliminate demand. ABRAJOGO, a licensed-operator association, makes the same argument, but it is an interested party.

Banks, Pix and payment firms. They lose licensed flows, take on compliance work, and become the main enforcement chokepoint. That gives them quiet leverage over any reopened regime.

Clubs, broadcasters, states and the STF. Sponsorship bans hit clubs and media directly, and state licences die with the MP; none has gone on record (see the table below). Anseja (ADI 8024) and ANJL (ADI 8027) are before Justice Fux, with no ruling on the dockets; NEXT.io reported he would decide after the election. Our inference: football is the most likely ally of a sports-only carve-out.

What the operators are saying and doing

• Flutter (Betnacional and Betfair). Flutter's September 28 SEC filing says it has stopped sports betting and iGaming in Brazil and is "reviewing all available options, including the potential to appeal". It expects about $70 million less revenue and $20 million less adjusted EBITDA in 2026, and it is assessing non-cash accounting effects. Its Q2 10-Q carries $539 million of goodwill in Flutter Brazil. In a statement reported by NEXT.io, Flutter Brazil said it would close Betfair locally, keep Betnacional and cut staff. Forecast: an impairment at Q3 or full-year results is likely (about 70%), given a closed brand and a frozen market. Keeping Betnacional is a cheap option on reopening. We do not expect a Brazil exit while Congress is still undecided.
• Entain (Sportingbet). Entain's October 15 Q3 trading update says Brazil NGR fell 36%. Its guidance assumes the ban holds for the rest of 2026, with online NGR growth of 4–6% and EBITDA at the lower end of £910–960 million. According to iGaming Business, CEO Stella David told analysts: "I think the market will reopen in some form or another and we will be back there." NEXT.io reported that Entain had kept its Brazil team for now. Forecast: Entain is positioned for a narrowed reopening. If Congress passes the MP intact, we expect cuts to the Brazil team, which we put at about 60% in that scenario.
• Betano (Kaizen). The igaming-times roundup reports that Allwyn, a 36.75% shareholder in Kaizen, said Betano is preparing legal action and that Allwyn's margin guidance would not hold if the ban lasts the year. Kaizen itself has made no statement we could locate. Forecast: individual suits are likely to be folded into, or wait on, the STF ADIs.
• Evolution (supplier). Evolution's Q3 report says it closed its Brazil studio on October 5 (see our Evolution Q3 report). Forecast: suppliers will be the slowest to return, because studios are fixed costs.
• Associations. In a September 28 statement, IBJR said it had joined ANJL in asking the STF to suspend the MP immediately. ABRAJOGO called the ban "a rupture of the regulatory framework built by the Brazilian state itself" and warned that it would push players to clandestine sites; its statement was reported by iGaming Brazil. Forecast: a full STF suspension is unlikely (about 15%). The courts usually defer to Congress while an MP is still pending, and the strongest legal argument is about compensation for the licence fees, not the right to operate. We expect the outorga claim to outlive the ban debate.
• Bet365, Superbet, Rei do Pitaco, Esportes da Sorte and other local brands. All of these brands appear on the SPA's register of authorised operators. We found no public statement from any of them on MP 1.394 in their own channels. That silence is consistent with letting the associations carry the fight, and with avoiding being named in an election.

Who stands where

The silence is telling. Clubs, broadcasters and banks are among the biggest earners from the old regime, but none of them has gone on record, as far as we can find. Our reading is that they are lobbying privately for a carve-out rather than defending a toxic industry in public.

The region: a redistribution, not a contagion

Our assessment: Brazil's ban will push investment and some marketing into Peru and Argentina's provinces. It will not trigger copycat bans elsewhere in Latin America. We found no government or legislator in the region citing Brazil in a primary statement or bill text. That could change if the ban is converted and appears to work.

• Peru (likely destination, about 60%). Peru licenses nationally through MINCETUR, and foreign entities can apply without a local branch, according to a regional market review by Econosur. A lawyer told NEXT.io that Peru could attract investment if the Brazilian ban becomes law. Expect licensed groups to put marketing budgets there first.
• Argentina (partial, about 40%). Licensing is provincial. Argentina's Justice Ministry says 20 of 24 jurisdictions regulate online gaming, as cited by Econosur. Fragmented licensing makes Argentina a slower home for displaced capital.
• Chile (enforcement before licensing). Chile has no licensing law yet, and its online betting bill is still in Congress. Chile's telecoms regulator Subtel has ordered internet providers to block 143 sites, according to its own testimony in the Senate. Our assessment: Brazil's ban is unlikely to speed up a licensing bill in Chile (about 25%), but it may harden the blocking.
• Colombia and Mexico (low impact, about 20%). Both are established permit regimes with their own disputes. Brazil changes little there except competition for staff and suppliers.
• Paraguay and Uruguay (border leakage, moderate, about 40%). Paraguay is moving toward licensing up to three sports-betting concessions, and Uruguay keeps a single state platform, according to Econosur. Brazilians near the border can cross physically or use VPNs to reach these markets. We expect some measurable leakage, mostly to unlicensed offshore sites rather than to these countries' legal operators.
• Sponsorship, payments and suppliers. Brazilian football shirt and broadcast money will not move abroad one-for-one. Evolution's studio closure shows suppliers cutting fixed costs instead of relocating them. Payment providers for offshore sites are likely to shift to crypto and to intermediaries outside Brazil. The MP's payment ban explicitly targets that route.

The fiscal hole

The government's own justification concedes lost revenue but gives no figure that we could find in primary documents. What it gives up includes the 12% GGR share earmarked for sport, security, health and education, the monthly supervision fees, and future licence fees. The R$2.55 billion already paid is kept, so the near-term cash hit is small. Our assessment: no replacement tax has been named. The earmarked sports and security funds are the first to feel the gap in the 2027 budget, which gives those constituencies a reason to back a carve-out.

Enforcement capacity and the black market

According to the Justice Ministry, 1,367 sites and profiles were taken down the day before signing. Bloomberg Línea reported that the government has since requested blocks on 5,209 sites. We found no consolidated official blocking total from Anatel or the SPA. Our assessment: blocking at this scale is quickly outpaced by mirror domains, as Chile's numbers show. The real chokepoint is payments: Pix rejection rules and the processing ban. Their effect will only show up in Central Bank or COAF data, which has not been published.

Player protection

Licensed operators had to verify identity with facial recognition, could not offer bonuses, and had to support self-exclusion; Padilha cited more than 1.3 million self-exclusions. The ban removes the licensed channel but not the demand. Our assessment: for heavy users who move offshore, protection falls. For casual users, the ban probably cuts exposure sharply. Net harm-reduction data will take a year or more to appear, and nobody has committed to publishing it.

Legal certainty and precedent

Brazil sold five-year licences for R$30 million each and extinguished them within about 21 months without refunds. Whatever the court decides, foreign investors in other licensed sectors will price that risk. Our assessment: the licence-fee claim is the operators' strongest legal argument, with a better than even chance (about 55%) of some compensation through a settlement or court order over the next two years. A full STF suspension of the ban is a different and less likely outcome. The precedent concern ABRAJOGO raised, that the state can revoke what it sold, will be cited in Brazilian disputes beyond betting.

Three scenarios

1. Narrowed conversion (about 50%). Congress converts the MP but adopts carve-out amendments: sports betting by licensed firms survives, while online casino and most advertising stay banned. Operators reapply or reactivate under new terms, and fights over fees follow. Payment firms would run a two-track system, with a whitelist for licensees and the MP's rejection rules for everyone else. Players get a smaller legal menu. Why it is the most likely outcome: it is where the amendments cluster, it lets Lula claim that "the bets" (meaning Tigrinho) are gone, and it gives back part of the revenue Finance says it will lose.

2. Converted as written (about 30%). This is a permanent ban. If PL 5.477 also passes, operating would carry four to six years in prison. Licence-fee litigation would become the operators' main lever, and impairments would be finalised. Banks would remain the enforcement chokepoint, and offshore demand would persist. This scenario becomes more likely if the committee is installed quickly and the government spends post-election capital on it.

3. Lapse without conversion (about 20%). The MP loses effect. Under Article 62 of the Constitution, it cannot be reissued in the same legislative session. Unless Congress passes a legislative decree, relations formed while the MP was in force stay governed by it, which leaves licences already extinguished in legal limbo. The likely result is a messy partial return, followed by a new bill in 2027.

Supreme Court overlay. If the STF suspends the MP's licence-extinction clause, any scenario moves toward reopening. We consider that unlikely before Congress acts.

What to watch

• November 9: urgency rules start blocking the Congress agenda. Watch whether the joint committee is installed.
• November 12–13: the Chamber's 45-day window for PL 5.477 closes, and the bill begins to lock the agenda.
• November 23: the MP's deliberation deadline. A one-time extension is possible.
• Fux's decisions in ADI 8024 and ADI 8027.
• December 15: SPA deadline for former operators to settle their obligations.
• Flutter's and Entain's next results, for Brazil impairments.

Further reading: our licence countdown and Flutter's Brazil restructuring.

Sources

• TSE, runoff results: https://resultados.tse.jus.br/oficial/ele2026/6258/dados/br/br-c0001-e006258-u.json
• MP 1.394/2026: https://www.planalto.gov.br/ccivil_03/_ato2023-2026/2026/mpv/mpv1394.htm
• Law 14.790/2023: https://www.planalto.gov.br/ccivil_03/_ato2023-2026/2023/lei/l14790.htm
• Constitution, Art. 62: https://www.planalto.gov.br/ccivil_03/constituicao/constituicao.htm
• Congress, MPV 1394/2026 (status, amendments, author's justification): https://www.congressonacional.leg.br/materias/medidas-provisorias/-/mpv/175871
• Chamber, PL 5477/2026: https://www.camara.leg.br/proposicoesWeb/fichadetramitacao?idProposicao=2647160
• Ministry of Health, MP signing (85 licences, R$2.55bn): https://www.gov.br/saude/pt-br/assuntos/noticias-ms/2026/setembro/presidente-lula-assina-medida-provisoria-que-proibe-as-bets-no-brasil
• Ministry of Justice announcement: https://www.gov.br/mj/pt-br/assuntos/noticias-1/governo-federal-proibe-bets-em-todo-o-pais-e-lanca-pacote-de-protecao-as-familias-endividadas-1
• SPA register of authorised operators: https://www.gov.br/fazenda/pt-br/composicao/orgaos/secretaria-de-premios-e-apostas/transparencia-ativa-processos-de-autorizacao-de-apostas-de-quota-fixa/empresas-autorizadas
• Fazenda, SPA Ordinance 3.005: https://www.gov.br/fazenda/pt-br/assuntos/noticias/2026/outubro/secretaria-de-premios-e-apostas-regulamenta-obrigacoes-das-empresas-apos-proibicao-das-bets
• STF dockets: ADI 8027 https://portal.stf.jus.br/processos/detalhe.asp?incidente=7708339 ; ADI 8024 https://portal.stf.jus.br/processos/detalhe.asp?incidente=7707875
• @LulaOficial: https://x.com/LulaOficial/status/2103641413992755298 ; https://x.com/LulaOficial/status/2104163992558272744 ; https://x.com/LulaOficial/status/2113959334354760191
• Flutter 8-K, 28/09/2026: https://www.sec.gov/Archives/edgar/data/1635327/000119312526403357/d484581dex991.htm ; Flutter Q2 10-Q: https://flutter.com/media/mced1zyc/flutter-q2-2026-10-q-form.pdf
• Entain Q3 trading update: https://www.entaingroup.com/news-insights/latest-news/2026/2026-q3-trading-update/
• Evolution interim report Jan–Sep 2026: https://www.evolution.com/investors/financial-publications/press-releases/evolution-interim-report-january-september-2026
• IBJR statement: https://ibjr.org.br/sala-de-imprensa/nota-oficial-acao-judicial-para-suspensao-imediata-da-medida-provisoria-n-1-394-2026/
• Chile Subtel testimony (Senate); Econosur regional review https://econosur.org/insights/cono-sur/south-america-igaming-industry/ ; Bloomberg Línea https://www.bloomberglinea.com/negocios/prohibir-las-apuestas-deportivas-el-camino-que-toma-america-latina-tras-el-endurecimiento-de-las-reglas-en-brasil/ ; NEXT.io LatAm https://next.io/latam/news/uncategorised/la-prohibicion-en-brasil-podria-empujar-la-inversion-hacia-otros-paises-de-latinoamerica/ ; CNN Brasil (AGU) https://www.cnnbrasil.com.br/economia/money/macroeconomia/agu-acionara-8-bets-por-falta-de-dados-ha-r-159-mi-para-serem-devolvidos/
• Attributed media: g1 (plano de governo review) https://g1.globo.com/politica/eleicoes/2026/noticia/2026/09/26/propostas-candidatos-presidencia-bets-apostas.ghtml ; O Tempo (Flow interview) https://www.otempo.com.br/eleicoes/2026/presidentes/2026/10/1/lula-nega-carater-eleitoral-em-proibicao-de-bets-e-diz-duvidar-que-congresso-derrube-medida ; iGaming Business (Entain call) https://igamingbusiness.com/finance/entain-confident-brazil-market-will-reopen/ ; NEXT.io https://next.io/news/features/entain-sportingbet-antonio-forjaz-brazil-appetite/ ; igaming-times (Allwyn) https://igaming-times.com/news/corporate/listed-groups-count-the-cost-of-brazils-ban-with-the-affiliates-hit-hardest ; iGaming Brazil (ABRAJOGO) https://igamingbrazil.com/legislacao/2026/09/25/brasil-precisa-honrar-as-regras-que-estabelece-diz-abrajogo-apos-mp-que-proibe-bets/