By Tatiana Martins, journalist at G&M News.
Currently, Brazil’s regulated betting market is facing its most serious institutional crisis since the country approved a legal framework for fixed-odds betting. Less than two years after creating a system designed to authorize, supervise and tax betting operators, the federal government has suddenly moved to eliminate the sector altogether. The timing of the decision, just days before Brazil’s presidential election, has intensified questions about the political motivations behind the measure and about the legal certainty of a market that invested heavily under rules established by the government itself.
On September 25th, 2026, President Luiz Inácio Lula da Silva signed Provisional Measure 1,394/2026, effectively banning fixed-odds betting throughout Brazil. The measure prohibits the operation, offering, intermediation and advertising of sports betting and online games, while establishing a 30-day period for the termination of existing federal, state and district authorizations. It also states that operators will not be entitled to reimbursement of authorization fees or compensation from the government.
The decision represents a dramatic reversal of the regulatory policy adopted by the same administration. Under Law 14,790/2023, Brazil created a framework in which operators could seek authorization, pay substantial fees, comply with technical and financial requirements and operate under supervision by the Ministry of Finance’s Secretariat of Prizes and Betting.
The government’s own database listed dozens of authorized companies before the MP was issued, including operators and brands such as Betano, Betnacional, Sportingbet, KTO, Betsson, Superbet, Rei do Pitaco, and others.
These companies did not enter an illegal or unregulated vacuum. They entered a market that the Brazilian state had explicitly chosen to regulate.
A REGULATORY U-TURN WITH AN ELECTORAL CLOCK
The political timing is impossible to ignore. The MP was signed on September 25th, only nine days before October 4th first round of the presidential election. Reuters reported that Lula, who is seeking reelection, announced the betting ban during a period of intense electoral competition, with Senator Flávio Bolsonaro among his principal opponents.
That timing does not, by itself, establish that the measure was adopted for electoral purposes. However, it provides legitimate grounds for political scrutiny, particularly because the government had spent the previous years building the regulated market rather than pursuing an outright prohibition.
Brazilian media have also questioned whether the measure is connected to the electoral environment, particularly after Lula and members of his government increased their criticism of betting in the weeks preceding the decision.
For operators, workers and companies that have built businesses around the legal framework, the issue is therefore larger than betting itself. It is about whether a government can establish a regulated economic sector, invite companies to invest and obtain authorization, collect authorization fees, impose compliance requirements, and then abruptly terminate the entire framework without compensation.
THE CONSTITUTIONAL CHALLENGE
The MP is already being challenged before Brazil’s Supreme Federal Court, the STF. On September 28th, the Associação Nacional de Jogos e Loterias (ANJL) and the Instituto Brasileiro de Jogo Responsável (IBJR) asked the Court to suspend the effects of the measure. The organizations argue that the government’s decision represents an abrupt rupture with the regulatory framework and violates legal certainty and the legitimate expectations of companies that entered the market under rules established by the state.
The National Association for Legal Security in Games and Betting (ANSEJA) also filed a direct action of unconstitutionality, ADI 8024, asking the STF to suspend the MP. One of its central arguments is that the government failed to demonstrate the urgency required for the use of a provisional measure.
That point is relevant because Article 62 of Brazil’s Constitution requires provisional measures to be based on both relevance and urgency. The STF has previously recognized that these constitutional requirements can be subject to judicial review.
Government, however, argues that immediate action is necessary because of the social, economic and public-health risks associated with betting. In the explanatory memorandum accompanying the MP, the Ministries of Finance and Justice argued that waiting for ordinary legislative proceedings would allow those impacts to continue and therefore justified immediate intervention.
The constitutional question, therefore, remains open. The STF has not declared the MP unconstitutional. What exists today is a direct legal challenge arguing that the measure fails constitutional requirements, particularly those relating to urgency, legal certainty and the treatment of existing authorizations.
WORKING FOR LEGALITY. BOOSTING ILLEGALITY
This is perhaps the most uncomfortable contradiction in the current debate. Brazil did not simply tolerate the betting industry. It built a regulatory structure for it.
Companies were required to seek authorization, meet regulatory obligations, implement responsible-gaming measures, comply with anti-money-laundering requirements and operate under government supervision. The Ministry of Finance maintains a public list of authorized companies and has progressively expanded transparency around the authorization process.
The sector also created a considerable ecosystem of professionals working in technology, compliance, payments, marketing, customer service, data, cybersecurity, legal services, risk management, responsible gaming, and other areas.
In fact, government itself has continued to target unauthorized operators. Just two days after the MP was announced, the Ministries of Justice and Finance said a joint task force had taken down 506 websites suspected of offering illegal betting services.
This creates an important distinction for the public debate: eliminating authorized companies does not automatically eliminate demand for betting. It may instead change where that demand goes.
LEGAL OPERATORS SHOULD NOT BE TREATED AS ILLEGAL BUSINESSES
Whatever position one takes on gambling policy, companies that obtained authorization under Brazil’s regulatory framework should be distinguished from operators that deliberately ignored the law.
Betano, Betnacional, Sportingbet, KTO, and other brands were included in the government’s authorization system. These companies invested in Brazil based on a regulatory model established by the Brazilian government. They hired employees, contracted suppliers, developed compliance structures, paid taxes and fees and built operations around the expectation that the legal framework would remain in place.
More than corporate balance sheets, the abrupt reversal also affects workers, technology providers, payment companies, advertising businesses, sports organizations, and a wider professional ecosystem that developed around the regulated market.
The debate over gambling policy is legitimate. Consumer protection, addiction prevention, financial crime and the integrity of sports deserve serious public attention. But those objectives do not necessarily require treating every regulated operator as though it were part of the illegal market.
WHAT WILL HAPPEN NOW?
The immediate battle is now taking place on two fronts: the STF and Congress. The MP has immediate legal effect, but it must be considered by Congress within the constitutional timetable if it is to become permanent legislation. The Senate has confirmed that the measure has already entered the legislative course.
At the same time, the Supreme Court will have to examine the constitutional arguments raised by the associations representing the sector. The outcome will matter well beyond the betting industry.
Brazil has spent years attempting to establish itself as a regulated market capable of attracting international investment while combating illegal operators. If the legal framework can be dismantled almost overnight after companies have received government authorization and invested under that framework, questions about regulatory predictability will inevitably extend beyond betting.
Brazilian workers and companies operating within the law deserve a regulatory environment in which rules are clear, institutions are predictable and legal decisions are respected.
The country can debate whether betting should exist, how it should be regulated, and what additional safeguards should apply, but that debate should take place through stable institutions, transparent legislation, and constitutional procedures.
For a market that was explicitly invited into legality, the immediate expectation is simple: that legal certainty, institutional order and respect for the rule of law will be restored through the appropriate democratic and judicial processes.