Brazil Moves to Ban Online Gambling as President Lula Orders Betting Industry Shutdown

Brazil's online gambling industry has been thrown into uncertainty after President Luiz Inácio Lula da Silva signed a provisional measure ordering a shutdown of the country's regulated online betting market.

The measure, signed on 25 September 2026, prohibits the operation, offering, intermediation and advertising of fixed-odds betting, covering both sports betting and online gaming. The move represents a dramatic change of direction for a market that Brazil had only recently moved towards fully regulating.

The ban has taken immediate effect, although there is an important caveat. The provisional measure must be considered by Brazil's Congress within 120 days if it is to remain in force. That means the future of Brazil's regulated betting market is not yet completely settled.

Why Has Brazil Banned Online Betting?

The Brazilian government has pointed towards growing concerns surrounding gambling-related debt, addiction and the impact of betting on household finances.

According to figures published by the Brazilian government, the social costs associated with gambling-related harm are estimated at around 38.8 billion reais per year. The government has also highlighted the scale of betting activity in the country, with households estimated to spend around 60 billion reais annually on online betting.

Lula has argued that the rapid growth of betting platforms has created serious problems for Brazilian families, particularly where gambling expenditure is contributing to financial difficulties.

The government's decision therefore marks a significant shift from its previous approach of regulating the industry and attempting to bring operators into a controlled, taxable market.

What Happens to Existing Players?

For Brazilian players who currently have money held with betting operators, the government has established a short transition period.

Customers have until 11:59pm on 5 October to withdraw funds voluntarily from their accounts. Betting websites and apps are then scheduled to be taken offline from 6 October. Where players have not withdrawn their remaining balances, banks will be involved in returning the funds between 9 and 14 October, with state-owned Caixa Econômica Federal able to assist with outstanding refunds from 14 October.

The government has also begun stepping up enforcement against operators continuing to offer betting illegally. On 27 September, Brazilian authorities announced that 506 websites suspected of offering illegal betting had been taken down.

A Major Blow for the Regulated Market

The timing of the announcement makes the situation even more significant. Brazil only recently established a regulated framework for online betting, with licensed operators permitted to enter the market from January 2025 after meeting regulatory requirements.

Industry representatives have criticised the decision and warned that shutting down the regulated market could drive players towards illegal operators. The National Association of Games and Lotteries has said it is preparing a legal challenge, while other industry representatives have raised questions over investments and licensing fees paid under the previous regulatory system.

There are also questions over what the potential loss of a regulated market could mean for tax revenues, employment, sponsorships and Brazil's wider gambling industry.

For now, the focus will turn to Brazilian Congress and the 120-day deadline. Until lawmakers decide whether to approve the measure, one of the world's biggest emerging online betting markets has been left facing a very uncertain future.

For the global online gambling industry, Brazil's sudden change in direction is a major development – and one that operators, game developers and affiliates will be watching very closely.