Brazil will revoke all 85 sports betting operator licenses on Sunday, October 26, following President Lula’s Provisional Measure 1,394, which banned online betting effective immediately upon its issuance on September 25. Operators who collectively paid nearly BRL2.6 billion in license fees and BRL7.5 billion in capital contributions face no prospect of refunds, while the Supreme Federal Court has yet to rule on the measure’s constitutionality.
Brazil will revoke all 85 sports betting operator licenses effective Sunday, October 26, according to a report by iGB. The revocations follow President Lula’s Provisional Measure 1,394, issued on the night of September 25, which banned online betting to “protect families from indebtedness.”
The measure took effect immediately upon issuance. Operators were prevented from accepting deposits and bets right away, with only a few days to return amounts deposited by clients.
Billions at Stake With No Refund in Sight
Each of the 85 licensed operators paid a grant of BRL30 million (approximately $6 million) and made a security deposit of BRL5 million, iGB reported. Nearly 190 brands that had been operating in the licensed market lost their authorization under the provisional measure, with no return of the amounts paid for grants.
Carlos Lima, president of the Brazilian Institute for Responsible Gaming (IBJR), told iGB that almost BRL2.6 billion was paid in grants and approximately BRL7.5 billion in capital contributions by operators. Lima said this generated a multiplier effect of BRL28 billion in the broader economy.
“Legal certainty translates into the predictability necessary for long-term investments,” Lima said. “Companies structured complex operations planned for amortisation over 60 months.”
“On 25 October, contractual agreements designed to last five years will be abruptly interrupted, without any maturation period or return on investment,” Lima added.
Regulated Market Dismantled After Less Than Two Years
The regulated market had been operating for approximately one year and nine months before the ban. During that period, the government established rules developed by the Secretariat of Prizes and Bets (SPA), including accreditation of international laboratories, programs to combat problematic gambling and know-your-customer (KYC) rules with biometric identification.
Operators met technical and financial requirements and paid an oversight fee to ensure ecosystem compliance. According to iGB, many in the industry perceived the provisional measure as a politically motivated move by Lula.
Legal Challenges and Congressional Uncertainty
The IBJR and the National Association of Games and Lotteries (ANJL) — described as the main trade bodies in Brazil’s gambling sector — filed lawsuits with the Supreme Federal Court (STF), iGB reported. The Brazilian Association of Radio and Television Broadcasters (Abert) and football clubs followed with their own filings. The STF has not yet ruled on the measure’s constitutionality.
The provisional measure established a 30-day deadline for license revocations, meaning betting sites will lose their licenses on October 26. The National Congress has until November 25 to analyze the measure, but the Joint Committee for Provisional Measure 1,394 has not yet been fully established. Members have been appointed, but no president or rapporteur has been named.
Nearly 100 amendments have been presented to the measure, with most seeking to maintain sports betting activity while removing online casino operations. Congress can extend the voting period by 60 days. Starting November 9, the measure will block the legislative agenda of the National Congress.
“If Congress rejects the provisional measure, what happens to the expired authorizations?” Lima asked. “Will it be necessary to pay a new fee? The situation remains legally uncertain.”
Black Market Expected to Surge
Lima warned that bettors will not stop betting and that migration to illegal sites will increase. The black market is currently estimated at between 38% and 44% of the total market, according to a study by LCA Consultores cited by iGB.
