Brazil built a $4 billion betting industry in barely a year — now its president wants to tear the whole thing down. On April 8, President Luiz Inácio Lula da Silva told ICL Notícias that he favors a complete ban on online betting platforms, calling the industry “a massive tragedy” for millions of Brazilian families drowning in debt. The reversal is stunning: Lula himself signed online betting into law in December 2023. What was supposed to be a regulated revenue engine has instead become a political liability — and the fallout threatens operators, investors, football sponsors, and tens of thousands of jobs across the world’s fastest-growing gambling market.
KEY FACTS AT A GLANCE
- Policy reversal: Lula signed online betting into law in December 2023 — now wants it banned entirely
- Welfare crisis: 27% of Bolsa Família payouts (R$3.7 billion) went to betting platforms in January alone
- Sponsorship collapse: Football betting sponsorships dropped from 19 to 13 Série A clubs in one year
- Political hurdle: A ban requires congressional action — many lawmakers have financial ties to the betting industry
- Black market risk: Illegal operators may already capture 50–60% of the total market
How Brazil Became a Betting Powerhouse
Brazil’s journey into regulated online betting began in 2018 when President Michel Temer signed a law legalizing fixed-odds sports betting. But the framework sat dormant for years. It was Lula who gave the industry its operational blueprint, signing Law No. 14,790 in December 2023 — a bill drafted by Finance Minister Fernando Haddad primarily as a tax revenue measure. During its passage through Congress, lawmakers expanded the legislation to include online casino games over Senate objections. Lula signed the final version without vetoing the casino clause.
Regulations took effect on January 1, 2025, and the results were explosive. In its first regulated year, Brazil’s online betting market generated R$36.1 billion in gross gaming revenue — blowing past initial projections of R$31 billion. Platform visits surged from 7.03 billion in 2024 to 26.39 billion in 2025, a 275% increase. Over 25.2 million Brazilians — roughly 11.8% of the population — placed at least one bet on a licensed platform, with more than 100 million accounts registered across all operators.
By the end of 2025, Brazil had become the world’s fifth-largest betting market, with some analysts ranking it third behind only the United States and the United Kingdom. The Secretariat of Prizes and Betting (SPA) issued 78 operating licenses at R$30 million each — a five-year fee that signaled the government’s intent to build a serious regulatory framework. January 2026 alone generated R$1.496 billion in tax revenue, a staggering 2,600% increase year-over-year.
Why Lula Wants Out
“I am deeply worried about the indebtedness of the Brazilian people. If these platforms cause harm, why don’t we end them? We are discussing this very seriously.”
— President Luiz Inácio Lula da Silva, ICL Notícias interview, April 8, 2026
The social damage has been severe. Data from a Brazilian commerce and services confederation shows that more than 80% of the country’s families now carry some form of debt — the highest figure since 2010. Market analysts have directly linked part of that surge to the booming online betting industry.
The most damning data point came from Brazil’s Federal Court of Accounts (TCU): in January alone, Bolsa Família recipients spent R$3.7 billion ($685.6 million) on betting platforms. That represents 27% of all welfare payouts for the month — money intended to feed and house the country’s most vulnerable families instead flowing to betting operators. More than 20 million households and 54 million people depend on Bolsa Família.
The government has already taken partial action. Brazil’s Supreme Court ordered an immediate ban on using welfare funds for betting, and by December 2025, approximately 900,000 Bolsa Família and BPC beneficiaries had been blocked from accessing licensed platforms through an automated Ministry of Finance system. But for Lula — who is running for reelection in October 2026 — partial measures are no longer enough.
“If it is up to me, we close them.”
— President Lula on online betting platforms
What’s at Stake for Operators and Investors
The stakes for the global gambling industry are enormous. Brazil’s 78 licensed operators hold 138 brands, and each paid R$30 million (roughly US$5.4 million) just for a five-year license — money that would effectively be written off if a ban proceeds. Foreign operators were also required to establish Brazilian subsidiaries with at least 20% local ownership, meaning significant capital is tied up in local entities.
The market is dominated by international heavyweights. Betano leads with 25.1% market share, followed by Bet365 at 16.3% and Entain at 9.4%. Flutter Entertainment — which owns FanDuel, America’s leading sportsbook — announced a deal to acquire a 56% stake in Betnacional (the fifth-largest operator with 7.3% market share) through NSX Group for $350 million. That deal now carries significant regulatory risk.
Industry leaders have not taken Lula’s comments lightly. Ramiro Atucha, founder and CEO of Atucha Strategic Advisory, called the remarks “disrespectful” to investors and warned that M&A confidence in the Brazilian market could be permanently damaged. He noted it is particularly unjust given that licensees have had to adhere to strict regulatory requirements — including technical certification, data localization, geolocation monitoring, and real-time reporting to the SPA’s SIGAP system.
Lula had already approved a gradual tax rise to 15% of GGR from 2028 onwards. Combined with other taxes, the effective rate is nearing 50% for licensed operators — a burden that was already pushing some to reconsider their Brazilian operations before the ban proposal.
Football’s Sponsorship Crisis
Brazilian football has become deeply dependent on betting money. During the 2025 Campeonato Brasileiro Série A season, 19 of 20 top-flight clubs had sponsorship agreements with betting companies. Players like Vinícius Júnior and Ronaldo publicly endorsed betting brands. The industry had effectively become football’s primary commercial partner.
That relationship is already fracturing. Ahead of the 2026 season, six clubs — Bahia, Coritiba, Grêmio, Internacional, Mirassol, and Vasco da Gama — lost their betting sponsorships. Only 13 of 20 Série A clubs now have active deals. In Brazil’s second division, the situation is worse: six clubs began 2026 with no betting sponsor at all, continuing a trend from 2025 when many only secured deals in the second half of the season.
Bahia · Coritiba · Gremio · Internacional · Mirassol · Vasco da Gama
A full ban would eliminate what remains of these partnerships overnight, leaving clubs scrambling for alternative revenue at a time when Brazilian football is already under financial pressure.
The Tax Revenue and Jobs Dilemma
Beyond the operators and sponsors, a ban would cut off a significant stream of public funding. In 2025, the regulated betting industry directed R$4.53 billion — 12% of total revenue — toward social initiatives mandated by law. That money funds sports programs, tourism development, and public security across the country.
The sector also sustains approximately 15,000 direct and indirect jobs, according to the Instituto Brasileiro de Jogo Responsável (IBJR). These are not low-wage positions: the average salary in Brazil’s betting sector is BRL 7,000 — more than double the national average of BRL 3,200. About 65% of workers have completed or are pursuing higher education, and 47% hold positions requiring technical or academic qualifications. The roles span iGaming software development, risk analysis, sports trading, compliance, and cybersecurity.
The IBJR estimates that the regulated market could inject R$28 billion into the broader economy. A ban would not only eliminate those jobs but also erase the tax revenue windfall — January 2026 alone produced R$1.496 billion in government income from licensed platforms.
The Illegal Market Paradox
Perhaps the strongest argument against a ban comes from the industry’s own Achilles’ heel: the black market. Even with a regulated framework in place, industry representatives argue that illegal operators still capture roughly 50–60% of all betting activity in Brazil, generating an estimated R$1 billion per month in untaxed revenue. The SPA has been more optimistic, claiming that up to 70% of bets now flow through legal channels — but even that figure leaves a massive illegal segment.
A ban on licensed platforms would not eliminate demand. It would push bettors — the same 25 million active users — toward offshore and unlicensed operators that pay no taxes, fund no social programs, and offer no consumer protections. The billions in tax income that came with legalization would vanish, while the social harms Lula cites would likely continue or worsen through unregulated channels.
This dynamic mirrors what has played out elsewhere in Latin America, where regulators have also struggled to balance consumer protection with market access. As international platforms continue eyeing Brazil’s market, the question is whether prohibition actually protects consumers or simply hands the market to unregulated actors.
Can Congress Actually Do It?
Lula can call for a ban, but he cannot enact one alone. Shutting down online betting requires new legislation — and Congress has historically been far friendlier to the industry than the presidency. The betting sector’s financial ties to lawmakers and political parties create a powerful lobbying bloc, and 78 licensed operators holding 138 brands have every incentive to fight.
There is legislative movement, however. Deputy Luiz Carlos Hauly has introduced Bill 3636/2025, which would completely reverse Brazil’s gambling laws — eliminating advertising, shutting down platforms, and imposing legal penalties. Other proposals are more moderate: raising the gambling age to 21 and capping monthly betting amounts. Proposed legislation also includes a ban on gambling sponsorships at public sporting and cultural events.
The timing matters. Lula’s ban statement came on the same day he confirmed he would send Congress legislation to end the 6×1 work schedule — another populist measure ahead of the October 2026 presidential election. The pattern is clear: identify a cause with broad emotional resonance, stake a public position, and force opponents to either agree or defend an unpopular industry. Whether the ban is genuine policy or campaign positioning remains an open question.
A full prohibition remains unlikely in the near term. The more probable outcome is tighter regulation — stricter advertising limits, lower bet ceilings, expanded bans on welfare recipients using betting platforms, mandatory addiction warnings, and continued development of Brazil’s biometric verification system for licensed operators. But even the threat of a ban carries real consequences: investor confidence erodes, M&A activity stalls, and operators scale back their Brazilian commitments.
KEY TAKEAWAYS
- Lula wants a complete ban on online betting — calling it “a massive tragedy” for indebted families, just two years after signing it into law
- R$36.1 billion in first-year revenue is at risk — along with 15,000 jobs, R$4.53 billion in social contributions, and billions in tax income
- International operators face massive exposure — Betano, Bet365, Entain, and Flutter collectively dominate a market that may be pulled out from under them
- Football sponsorships are already collapsing — dropping from 19 to 13 Série A clubs in one year, with second-division clubs struggling to find any deals
- A ban would likely boost the illegal market — which already captures an estimated 50–60% of activity despite regulation
- Congress is the bottleneck — Lula cannot ban betting unilaterally, and the industry’s financial ties to lawmakers make passage uncertain
- Tighter regulation is more likely than full prohibition — but even the threat of a ban is damaging investor confidence and stalling M&A activity
Sources
- Brazil’s Lula argues for ban on online betting platforms — Associated Press
- Brazil Betting Market Hits R$36.1bn in First Year — iGamist (SPA/Bets Panel data)
- How Brazil Became the World’s 5th Largest Betting Market — Instituto Brasileiro de Jogo Responsável (IBJR)
- Over a quarter of Bolsa Família funds spent on betting in January — iGaming Business (Federal Court of Accounts data)
- Brazil sector hits back at President Lula’s call to ban online betting — iGaming Business
- Is Brazil’s betting sponsorship gold rush in decline? — iGaming Business
- Brazil’s regulated betting market supports 15,000 jobs — Instituto Brasileiro de Jogo Responsável (IBJR)
