Lula Bans Online Betting via Provisional Measure, Halting Multi-Billion-Dollar Industry Just Before Election

President Luiz Inácio Lula da Silva signed a Provisional Measure (MP) Friday, September 25, banning the operation of all online betting and virtual casino platforms in Brazil, a sudden move that immediately halts a multi-billion-dollar industry just nine days before the first round of the presidential election on October 4. The measure creates massive regulatory uncertainty for companies that had recently paid BRL 30 million (US$5.79 million) each for five-year licenses to operate under the regulated "Bets Law," which only took effect in January 2025. The decision marks a complete reversal of the federal government’s previous strategy to regulate and tax the fast-growing sector.

A Provisional Measure, or MP, is an executive decree that takes immediate legal effect upon signing, but must be approved by the National Congress within 120 days to become permanent law. The move is widely seen as a politically charged escalation against an industry Lula has publicly criticized, describing the debt it creates as a "dependency issue". Ministers within the government have cited internal studies arguing that the industry contributed to an estimated 1.8 million Brazilians falling into debt last year, disproportionately harming vulnerable households, which is the official justification for the ban.

The ban contradicts the government’s recent efforts to boost tax revenues, which included raising the tax on betting operators’ net revenue from 12% to 18% in a 2025 Provisional Measure. Critics of the ban within the government's economic team had previously warned that an outright prohibition would merely push the industry back into the shadows, strengthening the illicit and unregulated market that the initial regulation sought to eliminate. The decision has also drawn public criticism from Brazil's major football clubs, including Corinthians, Santos, and Flamengo, which rely heavily on betting sponsorships and have warned of the financial damage from lost contracts.

With the Provisional Measure now in effect, the focus immediately shifts to the National Congress, where the powerful lobbying presence of the betting industry and its allies in football are expected to mount a major offensive to block the law’s ratification. Authorized operators, whose licenses were effectively terminated years early, are also expected to launch immediate and complex legal challenges in the courts, arguing a breach of contract with the federal government. Lula, meanwhile, faces a tight re-election campaign, and his decision is a direct appeal to a voter base seeking protection against spiraling household debt.

What it touches The Provisional Measure creates a sudden, high-stakes exposure for the regulated online betting sector in Brazil, triggering anticipated lawsuits against the federal government. The decision also directly impacts the fiscal policy of the Treasury, as it foregoes a projected multi-billion-reais stream of tax revenue that had been budgeted for social security and health programs.