Lula’s Immediate Ban on Online Gambling Faces Congressional Delay, Creating Regulatory Uncertainty

Brazilian President Luiz Inácio Lula da Silva has signed a Provisional Measure (MP) that immediately bans fixed-quota sports betting and online casino games across the country, abruptly terminating a regulated market his own administration had established less than two years ago. The executive order, signed on September 25, prohibits the operation, offering, intermediation, and advertising of online betting, giving users less than two weeks to withdraw their funds before platforms go dark.

The measure, which took immediate effect upon publication, gives users of the licensed platforms until 11:59 p.m. on October 5 to voluntarily withdraw any remaining balances. The following day, October 6, betting websites and apps are scheduled to be taken offline. The President framed the action as a “hard, drastic, and necessary measure” to address what he called a public health crisis of families falling into debt due to addiction.

However, the ban's permanence is now subject to the National Congress. Like all Provisional Measures in Brazil, this decree has the force of law immediately but must be ratified by Congress—the Chamber of Deputies and the Federal Senate—within 120 days to become permanent. If Congress does not approve the MP, or a modified version of it, the ban will automatically expire.

Crucially, Congressional leaders have signaled that debate on the Provisional Measure will be postponed until after the second round of Brazil's current elections. This delay introduces significant regulatory uncertainty and suggests the measure could be softened or face major changes. Industry groups representing regulated operators are already challenging the move in court, pointing out that many companies paid substantial fees for five-year licenses under the 2023 regulatory framework, which the MP effectively reverses.

The decision creates a regulatory void, as the government is now attempting to shut down the licensed market without a clear path forward for the multi-billion-reais sector. The ban has drawn criticism for potentially pushing bettors toward the illegal, unregulated market, where consumer protections are non-existent. For the market to regain any stability, Congress will have to decide whether to ratify the outright ban, let the MP expire, or introduce amendments that could re-establish a regulated, but much more restrictive, market.

What it touches

The sudden ban exposes the tech and entertainment sectors, which had become heavily intertwined with the betting industry. Companies that had secured federal licenses, along with major Brazilian football clubs that rely on fixed-odds betting sponsorships—including those across the country’s premier Série A league—face immediate financial and operational disruption, and may seek compensation for revoked licenses.