End of Bets in Brazil: What Changes and What Are the Next Steps

Less than three years after sanctioning the regulation of the online betting sector, the federal government has reversed its decision and signed a provisional measure that prohibits betting activities throughout the national territory. The measure is already in effect since its publication in the Official Gazette, but the path to a definitive ban is still long and depends on Congress.

The central justification for the decision is the indebtedness of Brazilian families, a topic that has gained traction in recent months with data showing the impact of betting on the income of lower classes. The question now is to understand what happens in practice, what the real deadlines are, and why the story is far from over.

Timeline: When Bets Go Offline

The provisional measure establishes a tight schedule. From the signing, new deposits on betting platforms are prohibited. The sites will remain accessible only for users to withdraw their remaining balances until 11:59 PM on October 5.

On October 6, the sites will be blocked. For those who cannot withdraw by the deadline, the financial institutions operating for the betting houses will refund the balances between October 9 and 14. The hiring of new betting advertisements has also been immediately prohibited.

In practice, the sector has just over a week to cease operations. This is an unusual timeframe for an industry that has moved billions in recent years and employs thousands in advertising, technology, and operations. As we discussed in our financial coverage, abrupt regulatory decisions tend to generate significant side effects in the market.

Temporary Validity and the Role of Congress

The most important point that many people are ignoring: the provisional measure is valid for 60 days, extendable for another 60. That is, without action from Congress, the prohibition may simply expire.

To become permanent, the measure needs to be reviewed by a mixed commission of deputies and senators and then voted on by the chambers of the House and Senate. So far, the leadership of Congress has not defined either the schedule or who will be the rapporteur of the commission.

The political context complicates matters. With Congress being less active due to the electoral campaign, the expectation is that an agreement on the next steps will only be stitched together after the first round. Depending on when the budget is voted on and when the parliamentary recess begins, the provisional measure will need to be reviewed between January and February 2027.

This scenario creates significant legal uncertainty. Companies in the sector, football clubs with sponsorship contracts, and payment platforms find themselves in a regulatory limbo that could last for months. A similar situation has already occurred in other sectors, as we discussed in our analysis of cryptocurrency regulation in Brazil.

From Regulation to Prohibition in Less Than Three Years

The trajectory of betting in Brazil is a case study in public policy. In December 2023, the government sanctioned the so-called Betting Law, which regulated the sports betting and online gaming sector. The argument was that regulation would bring transparency, consumer protection, and tax revenue.

The initial numbers seemed to confirm the thesis: since the regulation, the Union has collected R$ 2.5 billion just from licensing fees. Hundreds of companies formalized, large international brands entered the market, and the sector became one of the largest advertisers in the country, especially in football.

What changed was the political perception. Research and data on family indebtedness linked to betting transformed bets into villains in the public narrative. The government, which initially bet on regulation as a solution, decided on a complete ban. This reversal raises questions about regulatory predictability in Brazil, a topic that directly affects the business environment and the confidence of foreign investors.

Criminalization: The Parallel Bill

In addition to the MP, the government will send a bill to Congress to criminalize online betting operations and their operators. The penalties range from two to six years in prison. Unlike the provisional measure, the bill only comes into effect after being approved by lawmakers.

The strategy is clear: while the MP addresses the problem in the short term, the bill seeks to create a penal framework that discourages clandestine operations. The big question is whether Congress, which has a bench with interests linked to the betting sector and football, will be willing to approve both.

The betting lobby has been one of the fastest-growing in Brasília over the past two years. According to market estimates, the sector has invested hundreds of millions in institutional advertising and government relations. Reversing this structure will not be trivial, as we have already analyzed in reports on the influence of the financial sector in Brazilian politics.

What is at stake for the market

The impact goes beyond bettors. Football clubs that rely on sponsorship contracts with betting houses face an immediate risk of revenue loss. Media companies that profited from betting advertising will also feel the effect. And fintechs and payment processors that built infrastructure for the sector may see their investments evaporate.

From a macroeconomic perspective, the R$ 2.5 billion in revenue from grants will cease to exist. The government will need to find alternative sources of revenue or accept the fiscal impact. For the end consumer, the ban may simply push the activity to unregulated international platforms, accessible via VPN, repeating a pattern seen in other countries that tried the same approach.

International experience shows that total bans on online betting rarely eliminate demand. The United States, Italy, and Australia have gone through cycles of prohibition and re-regulation. Brazil may be entering this same cycle, with significant political and economic costs along the way.

This content is informative and educational and does not constitute investment advice. Past performance is not a guarantee of future results.