Brazil’s online gaming sector is bracing for serious disruption as President Luiz Inácio Lula da Silva moves closer to banning online casinos through a provisional measure.
Leading gaming lawyer Neil Montgomery has warned the industry is heading for “a lot of turbulence” if the measure is published and enforced as expected.
Montgomery’s warning is echoed by Pragmatic Solutions CEO Ashley Lang, who describes the potential ban as “a low probability but high-impact scenario” for operators currently active in the market.
Brazilian outlet UOL reports that a provisional measure prohibiting online casinos is on the verge of being published, following Lula’s earlier promise to take “drastic measures” against the sector.
Reuters, citing sources close to the matter, has reported that the prohibition would not extend to sports betting or sponsorship arrangements currently in place.
Despite that carve-out, the practical consequences for operators would still be severe, given that casino games account for the bulk of revenue in some cases reaching up to 70% of total income.
Montgomery has framed the timing of the announcement in explicitly political terms, pointing to Lula’s declining approval ratings ahead of upcoming elections.
“We are seeing Lula struggle with his current popularity,” Montgomery said, “and the rumour of the provisional measure probably is to try and increase the votes for him.”
Lula himself has made his personal position clear, stating this week: “I have already held three meetings within the government and met with civil society, and my personal position is to end betting,” adding that the government must act responsibly.
The legislation is expected to be signed ahead of the first round of general elections on 4 October, with Lula currently tied in polls with Senator Flavio Bolsonaro, son of former President Jair Bolsonaro.
The election outcome could therefore determine the sector’s future direction if provisional measures are not formalised before voting begins.
There are currently 188 authorised betting operators in Brazil, all holding licences granted last year that cover both online casino games and sports betting products.
Government officials have privately acknowledged that banning online casinos while preserving sports betting would significantly reduce operator revenues, in turn affecting sports sponsorship spending and tax receipts.
Industry insiders have urged operators to invest in data infrastructure and CRM capabilities that allow them to understand each player’s true value and respond to behaviour in real time.
The consensus across the sector is clear: Brazil moves fast, the uncertainty is real, and only operators that prepare now will be positioned to survive whatever regulatory landscape emerges next.
