Brazil Considers Online Casino Ban Amid Election

Brazil’s newly regulated online gambling sector could face a major change less than a year after the country completed its licensing process.

President Luiz Inácio Lula da Silva’s government is considering an executive order that would prohibit online casino games while allowing sports betting to continue, according to people familiar with discussions within the presidential office. Lula is expected to decide on the final wording before Brazil holds the first round of its general election on October 4.

Under the proposal, sports betting would remain permitted, along with sponsorship deals involving sports teams and competitions. However, online casino games account for a significant portion of many licensed operators’ businesses. Brazil’s National Association of Gaming and Lotteries estimates that around 75% of industry revenue comes from products outside sports betting.

The potential measure would therefore represent a significant shift for an industry that only recently received regulatory approval. Operators paid licensing fees for permissions covering both sports betting and casino products, built their businesses around those licenses and could now lose access to a major revenue stream.

Brazil’s Online Gambling Framework Is Still New

Brazil currently has 188 authorized betting operators. Although fixed-odds sports betting was legalized in 2018, the country did not complete its broader regulatory and licensing framework until 2024 under Lula’s administration.

The financial contribution from the sector has already become substantial.

Licensing fees and gambling taxes generated almost 10 billion reais, approximately $1.95 billion, for the federal government in 2025. Government officials are aware that removing casino products from licensed operators could lower tax revenues and potentially reduce the amount companies spend on sponsorships across Brazilian sports.

Operators Could Challenge Any Restrictions

The proposed changes could also trigger legal disputes between the government and licensed operators.

Bernardo Cavalcanti Freire, legal adviser to the National Association of Gaming and Lotteries, has said that operators paid concession fees for rights that included online casino activities. If those rights are subsequently withdrawn, companies could pursue refunds and damages.

The association has estimated that potential compensation claims could reach as much as 120 billion reais. This estimate comes from the industry and does not represent an established government liability.

The potential dispute would consequently extend beyond the question of whether online casino gambling should remain legal. Operators could also challenge whether the government can remove part of the permissions it granted after selling licenses that covered those activities.

Gambling Becomes an Election Issue

The proposed restrictions come as gambling becomes increasingly prominent in Brazil’s election campaign.

Lula has repeatedly called for tighter controls on online gambling and has recently held discussions within the government and with civil society representatives. His position has increasingly shifted toward ending betting, although ministers have continued discussing the scope of any potential measures. Several of Lula’s right-wing opponents have also criticized online gambling during the campaign.

Brazil is heading toward the October 4 vote amid a closely contested presidential race. Recent polling has shown narrow and differing margins in hypothetical runoff scenarios involving Lula and Senator Flávio Bolsonaro.

A Datafolha poll published on September 17 showed Lula at 46% and Bolsonaro at 44%. An AtlasIntel/Bloomberg survey published a week earlier recorded Bolsonaro at 46.4% and Lula at 46.2%, with a one-percentage-point margin of error.

Household Debt Adds to Gambling Concerns

The debate over gambling is also taking place against concerns about household debt.

The Finance Ministry estimates that Brazilians spend around 60 billion reais annually on betting. Banks and industry organizations have also highlighted indications that gambling spending may be competing with household expenses and everyday consumption.

Lula’s government has already introduced measures designed to address excessive indebtedness, but betting expenditure has continued to increase.

At the same time, the administration is increasing support for household budgets. This week, it announced a 15% increase in the minimum Bolsa Família welfare payment, raising it from 600 reais to 691 reais per month. The government is also developing another program intended to help heavily indebted consumers settle older obligations.

The Bolsa Família increase is expected to cost 5.8 billion reais in 2026 and 22 billion reais in 2027. The government says the additional spending can be accommodated within existing budget allocations.

Online Casino Ban Could Have Wider Financial Effects

The proposed casino restrictions would affect several areas of Brazil’s gambling market simultaneously.

The government is considering measures intended to address gambling-related financial harm without necessarily removing sports betting. However, it must also consider an industry that has already paid for regulatory authorization, generated significant tax revenue and become an important source of sponsorship funding for Brazilian sports.

For licensed operators, the issue has therefore moved beyond the possibility of stricter gambling controls. The key question is whether the government can significantly reduce permissions that were granted only recently and what financial consequences could arise if operators successfully challenge such a decision.

As of September 17, ministers were still discussing the executive order, and Lula had not signed the final version.