Brazil’s Gambling Ban: Regulatory Reversal, Investor Confidence and the Future of the Licensed Market

Key Findings

•       Prohibition and reversal. Provisional Measure No. 1,394 of 25 September 2026 prohibits fixed-odds betting, including sports betting and online casino games, and requires the winding down of a regulated market launched on 1 January 2025. The restriction covers domestic and foreign-based operators offering services to persons in Brazil.

•       Early termination of paid licences. Five-year authorisations costing 30 million Brazilian reais (BRL) each were extinguished thirty days after publication of the measure, without repayment of grant fees or compensation. This abrupt policy reversal raises questions about legitimate commercial expectations and regulatory certainty, irrespective of the government’s public-health objectives.

•       Wind-down mechanics. Operators must disable websites and applications ten days after publication. Open bets are void with full refund of stakes, prizes on bets settled before that date remain payable, and player funds are returned through banks and payment institutions under two-day and seven-day deadlines.

•       Enforcement beyond licensing. The measure introduces a ban on processing betting transactions, including instant payments; a ban on advertising and sponsorship; duties for internet application providers and app stores; administrative blocking of websites through the National Telecommunications Agency (Anatel) and the Brazilian Internet Steering Committee (CGI.br); and forfeiture of funds in blocked accounts without prior court proceedings.

•       Market and fiscal consequences. The Ministry of Finance reports approximately BRL 37.0 billion in regulated 2025 GGR, BRL 9.95 billion in federal tax receipts, BRL 2.5 billion in authorisation fees and BRL 4.5 billion in statutory social allocations (distinct categories, not to be added without reconciliation). The government’s own explanatory memorandum projects BRL 12.021 billion in lost tax receipts over 2026–2028. H2 Gambling Capital models approximately BRL 25 billion in annualised GGR-related spending potentially shifting from licensed to unlicensed operators; this is not betting turnover or an observed post-ban outflow.

•       Legal and institutional status. The provisional measure remains operative as of this report’s cut-off. Constitutional challenges include direct actions of unconstitutionality (ADIs) 8,024, 8,027, 8,028 and 8,035. The Federal Supreme Court (STF) held a public hearing in ADI 8,027 on 3 November 2026, which the rapporteur described as informational; no ruling on the requests for interim relief had been reported at the time of writing. The official register of the National Congress sets 23 November 2026 as the end of the initial deliberation period, which is the next procedural date; no congressional vote has taken place.

Main Analysis

1. Background: The Regulatory Regime Before the Ban

Fixed-odds betting in Brazil was regulated by Law No. 14,790 of 29 December 2023. According to MercoPress, the regulated online market launched on 1 January 2025. Under article 5, item I, of Portaria No. 827 of 21 May 2024 of the Secretariat of Prizes and Betting (SPA) of the Ministry of Finance (MF), which regulates articles 4 to 13 of the Law, an authorisation is granted for five years on payment of BRL 30,000,000, within a limit of up to three commercial brands per authorisation. The regime was supervised by the SPA, which issued the following principal ordinances in 2024, as listed in the SPA presentation to the Chamber of Deputies of 11 November 2025:

As reproduced in the study of August 2026 by LCA Consultoria Econômica (LCA) for the Brazilian Institute of Responsible Gaming (IBJR), Portaria SPA/MF No. 615/2024 prohibits deposits by crypto-assets and by credit cards or other post-paid instruments (article 3, paragraph 2, items IV and VII). Portaria SPA/MF No. 1,231/2024 requires facial recognition with proof of life for bettor authentication (article 31) and prohibits making the delivery of bonuses, rewards or goods conditional on deposits by bettors (article 42).

The LCA study on the tax burden of the fixed-odds sector, published by IBJR in February 2026, reports 2025 GGR of BRL 37.0 billion based on SPA data. The Ministry of Finance’s Integrated Management Report 2025 independently reports approximately BRL 37 billion of GGR; BRL 4.5 billion allocated to public policies, approximately BRL 9.95 billion in federal taxes, BRL 2.5 billion in authorisation fees and BRL 95.5 million in supervisory fees. These are separately defined categories and must not be summed without checking overlaps. Under Complementary Law No. 224 of 26 December 2025, the sector-specific allocation share was 12% in 2025 and increased to 13% in 2026, with scheduled rates of 14% in 2027 and 15% in 2028 under the pre-ban regime. These rates should be distinguished from LCA’s estimates of the total effective tax and regulatory burden of 32.0% of GGR in 2025 and 32.8% in 2026. Net prizes are subject to personal income tax as provided by applicable law.

The LCA/IBJR study of August 2026 reproduces a historical SPA series showing 78 licences covering 133 authorised brands as at December 2025 and BRL 2.34 billion of grant fees. These figures are retained as the study’s attributed series, rather than presented as a reconciled final official count. The Ministry of Finance’s annual management report for 2025 instead records 79 authorised companies, 183 commercial brands and approximately BRL 2.5 billion in authorisation receipts (it also refers elsewhere to BRL 2.46 billion in regulatory-nature fees). The government’s statement of 25 September 2026 gives a later total of 85 authorisations and BRL 2.55 billion paid. Differences may reflect distinct dates, definitions, scope and rounding; the source data do not establish a definitive line-by-line reconciliation. Companies, authorisations and brands are not interchangeable. Separately, the SPA reported more than 25,000 irregular betting websites blocked in 2025, demonstrating the enforcement infrastructure established alongside licensing.

Estimates of the unlicensed segment before the ban differ by method. LCA, in a study prepared at the request of IBJR, estimated the illegal market at 41% to 51% of the total in June 2025 and at 38% to 44% in August 2026 (base scenario: 41%, down from 46%), on the basis of a self-declared survey of 2,291 adult bettors conducted by Instituto Locomotiva in May 2026 with a margin of error of 2.1 percentage points. H2 Gambling Capital estimates that around 30% of the market was already offshore; it notes that 41% is the most recent figure widely quoted in Brazil but states that it does not believe the figure to be that high. The two estimates rest on different methodologies and are not directly comparable.

2. Legal Basis of the Measure

Provisional Measure No. 1,394 was issued by the President under article 62 of the Constitution and published in an extra edition of the Diário Oficial da União (edition 182-A, Section 1) on 25 September 2026. Under article 30 it entered into force on publication. It establishes an interinstitutional enforcement committee and amends Law No. 14,790. The presidential measure is a change in federal government policy, not an autonomous decision of the SPA, which had implemented and supervised the previously authorised regime. The accompanying Explanatory Memorandum No. 2114/2026 states the government’s concerns about household indebtedness, public health, the exposure of minors and the perceived insufficiency of existing regulatory safeguards. Its objectives should be distinguished from the proportionality and investment consequences of the measures chosen.

3. Scope of the Prohibition

Article 1 prohibits, throughout the national territory, the operation, offering, intermediation and advertising of fixed-odds betting lotteries, in physical or virtual form, including when carried out by an agent based abroad that offers them to a person located in Brazil. The prohibition covers bets on real sporting events and on virtual events of online games (article 1, paragraph 1). Other lottery modalities authorised by law are not affected (article 1, paragraph 2).

The measure also applies to fixed-odds betting lotteries operated by the States and the Federal District, whose concessions, permits and authorisations are extinguished within the period set by article 4 (article 2). Article 3 defines the key terms:

•       Fixed-odds bet: an act by which a value is placed at risk in the expectation of a prize whose amount is defined by a multiplication factor.

•       Online game: an electronic channel enabling a virtual bet on a game whose result is determined by the outcome of a future random event, produced by a random generator of numbers, symbols, figures or objects defined in the rules system.

•       Betting operator: a legal entity that has received authorisation to operate fixed-odds betting lotteries under Law No. 14,790.

4. Termination of Authorisations

Under article 4, concessions, permits and authorisations granted on the basis of Law No. 14,790 are extinguished at the end of thirty days from the date of publication, without prejudice to the obligations and prohibitions applicable during the transition period. The sole paragraph provides that the extinction is based on public-interest grounds and gives the operator no right to the return, in whole or in part, of the grant fee paid under article 12 of Law No. 14,790, and no right to compensation from the Public Authority. The implementation calendar reported by law firms places the extinction on 25 October 2026 (Demarest).

The extinction does not affect the supervisory and inspection powers of the SPA over facts that occurred while the authorisations were in force (article 5). Operators must keep their legal representative, electronic address and other contact details with the SPA up to date for as long as needed to perform the remaining obligations.

From the date of publication, new concessions, permits and authorisations are barred, and applications not decided by that date lapse (article 6). Administrative sanctioning proceedings under Law No. 14,790 and its regulation that were not finally decided at publication are suspended and are definitively archived if the operators timely perform all transition obligations (article 13).

5. Transition Obligations of Operators

Chapter III of the measure sets the sequence of obligations during the transition period:

Article 7 provides that open fixed-odds bets whose result has not been determined by the disabling deadline are void, and the player is guaranteed a full refund of the amounts staked, with no deductions of any kind (paragraph 2). The player keeps the right to receive prizes from bets whose result was determined by that deadline (paragraph 3). According to Gambling Law Index, the government calendar set 6 October 2026 as the date by which sites and applications had to be offline.

Funds intended for refunds remain segregated from the operator’s assets and held in the transactional accounts, and may not be moved for any purpose other than paying amounts due to players (article 8, paragraph 1). Failure to perform these obligations is subject to a daily fine of BRL 200,000 until the operator complies, without prejudice to other sanctions (article 8, paragraph 2). Breaches of Chapter III are also subject to the sanctions of article 41 of Law No. 14,790, as applicable, imposed by the Ministry of Finance (article 12).

6. Return of Player Funds

Article 9 obliges the financial and payment institutions that hold the operators’ transactional accounts to refund players in full within seven days of receiving the list prepared by the operator, by transfer to an active deposit or payment account held by the player and identified by CPF number. The refund is made preferably to the account from which the funds originated, provided it is active and held by the player; transfer to another account held by the player is permitted (paragraph 1).

At the end of the seven-day period the institutions send the SPA an itemised report of amounts refunded and amounts that could not be refunded, with the holders and the reasons (paragraph 2). Funds that could not be refunded are transferred to a specific account at Caixa Econômica Federal, for return to the holders under the supervision of the Ministry of Finance and with individual identification of the amounts due (paragraph 3). The refund does not remove the operators’ liability for amounts not made available, differences identified or other obligations arising from the operation of fixed-odds betting (paragraph 4).

Article 14 excepts from the transaction ban the transactions necessary for winding down operations and refunding players. According to the Chambers client alert, the Central Bank of Brazil (BCB) regulated these transactions in Resolution 590/2026, issued on 28 September 2026.

7. Enforcement Instruments

7.1 Financial and payment institutions

Except for transactions necessary for winding down and refunds, financial institutions, payment institutions, payment-arrangement issuers and other participants in payment arrangements, including instant payment arrangements, are barred from processing, settling or enabling transactions for fixed-odds betting, as regulated by the Central Bank (article 14). Arrangement issuers must provide in their rules for compliance by all participants, including those not subject to Central Bank authorisation, and must take the necessary measures in case of non-compliance, including exclusion of the participant (paragraph 1). The Central Bank is to establish an electronic data-communication system enabling the rejection of transactions and interbank return of funds related to illegal fixed-odds betting within real-time fund transfers settled in a system it operates (article 15).

7.2 Advertising, marketing and sponsorship

Article 16 prohibits communication, advertising, marketing and sponsorship related to fixed-odds betting lotteries in any medium, physical or digital. The prohibition covers all content that offers, promotes, publicises or facilitates access to such lotteries and is directed to the Brazilian public, regardless of format or form of remuneration (paragraph 1). Advertising material and sponsorship signs must be withdrawn within ten days of publication (paragraph 2).

The prohibition does not apply to content published, disclosed or displayed before the date of publication in which fixed-odds betting advertising appears incidentally to that content (article 17). Breaches constitute abusive advertising under article 37, paragraph 2, of the Consumer Protection Code (Law No. 8,078 of 11 September 1990), subject to the administrative sanctions of its article 56, including counter-advertising, without prejudice to civil and criminal liability. Breaches are investigated by the bodies of the National Consumer Protection System, and the competent authority may order interim suspension of the content (article 18).

7.3 Internet application providers, app stores and operating systems

Internet application providers have a duty of care to prevent and stop the circulation on their services of the content described in article 16, paragraph 1, including content generated by third parties, and are liable where they cannot show that they adopted adequate measures to curb its circulation (article 19). They must also make unavailable, on notification, third-party content that violates the measure; notifications may be made by a National Consumer Protection System authority or by the Ministry of Justice and Public Security (article 20). Providers of app stores and operating systems must prevent the availability of products or services prohibited by the measure and, on notification by the competent authority, make them unavailable (article 21).

Non-compliance with articles 19 to 21 is subject to the following sanctions, applied by the Ministry of Justice and Public Security, separately or cumulatively, without prejudice to civil and criminal liability (article 22):

•       warning, with a deadline for corrective measures;

•       a fine of up to 10% of the economic group’s turnover in Brazil in its last financial year, excluding taxes, or, where there is no turnover, BRL 10 to BRL 1,000 per user registered with the sanctioned provider, limited in total to BRL 50,000,000 per infraction;

•       a daily fine, within the same limit;

•       temporary suspension of activities; or

•       prohibition of the exercise of activities.

The sanctions of suspension and prohibition apply only in case of recidivism or repeated non-compliance after the application of the first three sanctions. In determining sanctions, the gravity of the infraction, the number of users affected, the advantage obtained, the economic condition of the infringer, recidivism, cooperation and corrective measures are considered. For foreign companies, the branch, office or establishment located in Brazil is jointly liable for payment of the fine (article 22, paragraphs 1 to 3).

7.4 Blocking of websites and applications

The Ministry of Finance and the Ministry of Justice and Public Security may request the blocking or redirection of websites offering fixed-odds betting lotteries. Anatel receives the blocking orders and distributes them to telecommunications providers and to other agents that enable the connection between users and content servers; CGI.br receives orders concerning names registered under the “.br” domain. Anatel and CGI.br may define the most appropriate technique for implementing each order (article 23).

7.5 Forfeiture of funds in blocked accounts and institutional coordination

Article 28 amends Law No. 14,790 by adding that financial operations related to an irregular operator, including atypical situations identified in its transactions, are to be reported to the Financial Activities Control Council (COAF), and that the forfeiture to the Union of funds held in accounts blocked under article 21-A is declared in an administrative proceeding, as regulated, with adversarial proceedings and full defence assured, and does not depend on prior court proceedings. Funds declared forfeited, including those relating to taxes, fines and other penalties imposed because of irregular exploitation of fixed-odds betting, are allocated to the National Public Security Fund (FNSP).

Article 24 establishes the Interinstitutional Committee for the Supervision of Illegal Exploitation and Advertising of Fixed-Odds Betting, coordinated by the Civil House of the Presidency, to coordinate the actions of the competent authorities; its competences, composition and operation are to be regulated. The Federal Police, the Federal Revenue Service and COAF must share the information necessary for their functions (article 25). The States and the Federal District must adopt the measures necessary within their competences (article 26), and the Union may conclude cooperation agreements with them for supervision and information sharing (article 27).

8. Obligations Surviving the Authorisation

The extinction of an authorisation or the end of activities does not remove the operator’s obligations relating to the period in which it was authorised (article 10), including:

•       regulatory, tax and pecuniary obligations, including legal allocations;

•       obligations on the prevention of money laundering, terrorist financing and proliferation of weapons of mass destruction, on responsible gambling and on sports integrity;

•       the duty to provide the competent authorities with the information needed for supervision; and

•       the duty to keep data, documents and records of activities, including those on players, bets, financial operations and payment of prizes, intact and accessible to the authorities for at least five years.

Operators whose authorisations are extinguished remain obliged to transmit to the SPA, through Sigap, data and information on activities carried out up to the date of cessation, including data on players, bets, prizes, deposits, withdrawals and transactional accounts; remaining balances and refunds; revenue and legal allocations; and responsible-gambling and player-protection measures (article 11). The SPA may regulate the form, deadlines and procedures for transmission.

Article 29 repeals Chapter V of Law No. 13,756 of 12 December 2018, articles 1 to 21, 22 to 24, 25 to 40, 43 to 48 and 54 of Law No. 14,790, and article 68 of Law No. 15,421 of 1 June 2026. According to its sole paragraph, Laws No. 13,756 and No. 14,790 remain applicable to facts that occurred while the authorisations were in force and to the performance of the obligations of Chapters II and III, including the supervisory, inspection and sanctioning powers of the SPA and the legal allocations of revenue.

9. Reported Developments Since Publication

Vixio reported on 20 October 2026 that licensed platforms and mobile applications went offline on 6 October; unreturned player balances were directed to accounts at a federal public bank and authorisations were scheduled to expire on 25 October. Vixio also cited the National Association of Games and Lotteries (ANJL) as estimating that roughly 51% of approximately 15,000 workers employed by licensed betting businesses had been dismissed or placed on leave. This is an industry-association estimate reported by Vixio, not an independently verified official employment count; dismissals and temporary leave should not be conflated.

The LegitBet monitoring system, whose survey was reported by Veja Negócios on 29 October 2026 (attributed to IBJR in that report and to ANJL in other press coverage), identified 60,477 suspected web addresses in its monitoring database through 27 October; 34,134 displayed indicators such as bonus offers, Pix payments or registration facilities. Monitoring reportedly drew on internet searches, recent domain registrations, previously observed site networks, social media and Telegram channels. These figures count URLs/addresses identified or assessed, not 60,477 verified illegal operators or 60,477 newly created websites. Their appearance in the database does not prove that they first became active after the ban or establish the ban’s causal impact. The industry also reports brand impersonation and redirection of users to third-party platforms.

10. Estimated Market Impact

On 29 September 2026 H2 Gambling Capital revised its Brazil forecasts to reflect the measure. H2 states that its core model assumes that the regulated market closes completely and does not reopen, because that is the only outcome with legal certainty at present, and that its working view is that the market will most likely reopen at some point in 2027.

H2 bases its model on the annualised 2026 run rate immediately before the ban, when regulated gambling gross revenue (GGR, stakes less player winnings) was estimated at approximately BRL 40 billion per year. H2 models around 60% of that GGR-related annual player expenditure, roughly BRL 25 billion (range BRL 20–30 billion), potentially continuing with unlicensed operators; another BRL 15 billion is modelled as near-term activity lost to the sector. The estimate is an annualised GGR-based market scenario, not total betting turnover/handle, not deposits and not a measured post-ban transfer. H2’s illustrative offshore GGR could rise from BRL 17 billion to BRL 42 billion on its 30% baseline, or from BRL 28 billion to BRL 53 billion on the 41% alternative. None of those figures should be represented as observed results.

H2 draws the estimate of the shift from onshore to offshore on two sources: its survey of 2,451 Brazilian online bettors conducted in November 2025, in which 39% of respondents were still using unlicensed sites, and the experience of the Netherlands, where, by H2’s estimate, roughly half of the decline in onshore spend that followed the increase in gambling tax and the introduction of mandatory deposit limits in late 2024 reappeared offshore.

11. Legal Challenge and Legislative Procedure

11.1 Proceedings before the Federal Supreme Court

ANJL filed ADI 8,027 against Provisional Measure (MP) 1,394 on 28 September 2026. STF records also identify ADIs 8,024, 8,028 and 8,035 as related constitutional proceedings; the reporting justice, Luiz Fux, ordered the hearing decision to be joined to those case files. The public hearing in ADI 8,027 was held on 3 November 2026, from 10:00 to 20:00 Brasília time. The official STF note records that the hearing resulted from new legal questions raised after the issuance of MP 1,394 and that, among the new points to be analysed, the rapporteur listed legal certainty, non-retroactivity of norms, protection of legitimate expectations and the constitutional requirements of relevance and urgency for provisional measures. According to Migalhas, the rapporteur stated that the Court is examining two distinct questions, the constitutionality of the legislation that regulated betting and the validity of the provisional measure that later prohibited the activity, and that the analysis must consider both the social effects of betting and legal certainty and protection of legitimate expectations. The same report records his statement that he is convinced that gambling disorder is a public-health and economic problem, and that the hearing was informational and involved no decisions. IBJR requested an interim order suspending the measure until Congress rules or the STF decides the merits; no ruling on that request had been reported at the time of writing.

11.2 Positions Presented at the Public Hearing of 3 November 2026

Representatives of the Federal Government defended the prohibition. According to Migalhas the Minister of Justice and Public Security argued that the regulation had not been sufficient to contain household indebtedness, gambling dependence and the use of platforms by organised crime, and that the measure met the constitutional requirements of relevance and urgency; while recognising the importance of legal certainty and of the legitimate expectations of economic agents, the minister maintained that the gravity of the harm required a more severe response. The Attorney General argued that the earlier regulatory model had become materially unconstitutional because it offered insufficient protection, and rejected the argument that a prohibition stimulates the clandestine market, stating that the existence of illegal activity does not oblige the State to authorise it; he argued that the measure should be accompanied by oversight of platforms, advertising and payment channels. The Attorney General also cited preliminary Ministry of Finance data according to which authorised operators received BRL 620 billion in wagers in 2025, with revenues of BRL 36.9 billion, and a survey by the Brazilian Association of Supermarkets (Abras) showing growth in food retail sales after the prohibition, while acknowledging that the figures do not establish a direct causal relationship. The National Secretariat of Digital Rights stated that between 25 September and 29 October 2026 the Ministry of Justice requested the takedown of 36,905 illegal sites.

Licensees, compensation and legal certainty. Participants representing licensees, sporting entities and other sectors focused on the treatment of existing authorisations and contracts. The National Association of Mayors and Deputy Mayors (ANPV), author of ADI 8,028, argued that the early extinction of five-year authorisations obtained against a payment of BRL 30 million, without restitution or indemnity, compromises acquired rights, and requested suspension of the measure until final judgment. ANJL criticised the legal uncertainty created for companies that paid BRL 30 million for authorisations and questioned the absence of indemnification. A lawyer representing Cruzeiro, described in the report as having coordinated the regulatory work on betting at the Ministry of Finance in 2023, questioned the retention of the BRL 30 million paid by operators and argued that the prohibition affects contracts concluded under the former legislation. Several football clubs reported losses of sponsorship revenue and criticised the ten-day period for withdrawing advertising and sponsorship; the Brazilian Olympic Committee estimated losses of up to BRL 2.6 billion for the sports sector over the end of 2026 and 2027; and the Brazilian Association of Radio and Television Broadcasters (Abert) argued that the ten-day period compromised contracts and revenues. Abras, the National Confederation of Trade (CNC) and health-sector representatives supported the prohibition, arguing that betting diverts household income from consumption and harms health.

Risk of expansion of the illegal market. ANJL and several clubs argued that a prohibition may favour clandestine operators. A lawyer for Ponte Preta cited a monitoring company’s survey identifying about 61,000 suspected illegal betting sites, with an average of 290 new addresses per day; representatives of Botafogo cited Ministry of Finance data on the blocking of more than 66,000 clandestine sites during the regulated period and argued that a prohibition may shift bettors to unauthorised platforms. The Brazilian Association of Economic Freedom (ABLE) noted indications of an expanded supply of clandestine sites but stated that there was not enough data to prove an increase in demand. Abert cited data from the National Advertising Self-Regulation Council (Conar) showing an increase from 2.3 to 8.5 daily complaints about advertisements of illegal sites after the issuance of the measure.

Transition arrangements and alternatives. Several participants proposed transition arrangements or alternatives to a complete prohibition. These are proposals made by hearing participants; they are not decisions or findings of the Court.

•       The Economic Regulation Laboratory of the State University of Rio de Janeiro (UERJ) proposed a transition of 180 to 360 days if the prohibition is maintained, to allow adaptation of contracts and systems, preservation of self-exclusion mechanisms and continuity of health care. For the event of resumption of betting, it proposed eight mandatory conditions, including a global spending limit per CPF, a ban on bets financed by credit, restrictions for persons registered in the Cadastro Único, oversight of advertising and independent financing for prevention and treatment through the Unified Health System (SUS).

•       The Brazilian Football Confederation (CBF) proposed a transition period until the 2030 World Cup, to allow gradual replacement of sponsors.

•       Grêmio proposed maintaining the prohibition of online casinos while permitting sports betting under strict regulation, with advertising restrictions and bettor protection, and cited longer transition periods adopted in England, Italy and Spain.

•       The National Rateio Office (Escritório Nacional de Rateio) suggested modulation of the effects of the measure and differentiation between sports betting and online casinos.

•       Corinthians, São Paulo, Botafogo, Ponte Preta and the National Federation of Professional Football Athletes (Fenapaf) also requested a transition period or revision of the measure.

The rapporteur stated that the hearing was informational and involved no decisions. The Attorney General asked him to consider a further hearing with civil-society entities that were not heard on 3 November 2026.

11.3 Consideration by Congress

According to the official register of the National Congress for Provisional Measure 1,394/2026 (MPV), the deliberation period for the measure runs from 25 September 2026 to 23 November 2026, and the period for amendments ran from 25 September to 13 October 2026. The mixed committee was designated on 30 September 2026. The next procedural date is therefore 23 November 2026, when the initial deliberation period ends. According to Exame, the initial period of 60 days is extended automatically for an equal period if the vote is not concluded. Brazilian press reports state that, at the end of October, the mixed committee had not yet been installed, that 99 amendments had been submitted and that the urgency regime begins on 9 November 2026 (Focus GN; Gazeta do Paraná). As of the date of this report no vote has taken place. Vixio estimates that the 120-legislative-day limit expires on about 4 March 2027.

12. Fiscal and Institutional Costs of Reversing Legalisation

The policy reversal affects more than a private industry. Brazil’s government constructed a federal authorisation regime, technical standards, Sigap data reporting, anti-money laundering and counter-terrorist financing (AML/CFT) and player-protection supervision, payment controls and mechanisms for blocking illegal platforms. This entailed administrative, technological and inter-agency effort on the state side as well as compliance expenditure and commercial investment by operators. The Ministry of Finance’s own 2025 management report described the first year of regulated betting as producing measurable results in supervision, public revenue and player protections. GCA has not identified a verified consolidated public budget figure for state implementation costs and does not assign one.

Explanatory Memorandum No. 2114/2026, accompanying MP 1,394 (items 12–13), estimates tax-revenue reductions of BRL 1.541 billion in 2026, BRL 5.150 billion in 2027 and BRL 5.330 billion in 2028: BRL 12.021 billion across the three years. It additionally estimates reductions in supervisory-fee revenue of BRL 38.4 million in late 2026 and BRL 115.2 million in each of 2027 and 2028, or approximately BRL 268.8 million in total. These are the government’s forecasts, not realised losses or an independently generated GCA model. The government expressly records no projected loss from already-issued authorisation fees because the payments had already been received in full.

Against that backdrop, article 4 of MP 1,394 extinguishes five-year authorisations without reimbursement of the fee or compensation. The public-interest rationale for changing policy and the legal or policy rationale for allocating nearly all stranded licence and compliance costs to operators are separate questions. GCA’s assessment is that a termination model without an adequate framework for protecting good-faith licensees weakens the credibility of public authorisations as a basis for long-term planning. This is an evaluative conclusion, not an assertion that compensation is automatically required under Brazilian law.

13. Regulatory Reversal and Long-Term Market Stability

Regulatory certainty is an investment condition, not a guarantee that laws will never change. A jurisdiction may lawfully revise its gambling policy, including for health and consumer-protection reasons, while still considering proportional transition periods, the treatment of prepaid licences and the reasonable reliance interests of compliant businesses. Where a government invites operators into a five-year, fee-funded licensing regime and rapidly dismantles it, future investors may price a higher regulatory-risk premium into any reopening, delay market entry or require stronger safeguards. These are risks, not a claim that no operator will ever apply again.

The direct effects extend across the sector: business-to-consumer (B2C) licensees cease trading, strand compliance and marketing investment and lose the remaining authorised term; business-to-business (B2B) software and platform providers face interrupted contracts and integration work; banks and payment service providers (PSPs) must stop ordinary processing while supporting refunds and maintaining AML controls; employees, clubs, media businesses and advertising partners lose revenue streams; and players must recover funds and may seek substitute services. The government, meanwhile, loses regulated tax and supervisory revenue and must enforce the prohibition against operators outside the licensing system. The scale of each effect varies and cannot be assumed from one industry estimate.

A durable prohibition is a policy choice, but removing licensed supply does not itself eliminate demand. If continued demand shifts to unlicensed websites, consumers may lose regulated identity checks, AML monitoring, responsible-gambling tools, complaint channels and enforceable recourse; tax collection and market visibility can also deteriorate. H2’s shift estimate and the ANJL/IBJR monitoring evidence indicate risks consistent with this mechanism, but neither is proof of the final size of displacement. GCA therefore distinguishes legitimate public-health aims from the effectiveness of the chosen regulatory instruments.

14. GCA Assessment: Market Stability Under Alternative Outcomes

The four potential outcomes presented below build upon the scenario framework published by Vixio on 20 October 2026. However, all detailed descriptions and market stability assessments represent independent analysis by GCA. The outcomes describe possible legal developments, are not probability forecasts, and should be updated following official STF and congressional developments. The assessment applies four criteria drawn from the facts set out in this report: the treatment of paid licences and contracts; control of unlicensed supply and payment channels; player protection and market visibility; and regulatory credibility for future investors.

Scenario 1 — Permanent prohibition. If Congress sustains the ban and it survives judicial review, the government may retain a prohibition model. The unresolved challenge is enforcement against offshore supply and the treatment of investments and fees committed under the former regime. Market stability will depend on whether demand and payments can be addressed without regulated operators.

Scenario 2 — Partial restoration. A return limited to sports betting, but not online casino games, would rebuild only part of the previous licensed perimeter. New technical and tax rules, treatment of existing permissions and a credible transition policy would be necessary; a partial reopening by itself does not reverse stranded investment.

Scenario 3 — Full restoration. If the licensed regime is restored, authorities will need to state whether former authorisations revive, how unused licence terms and prepaid fees are treated, and how enforcement and compliance requirements resume. Regulatory confidence will depend on clarity and predictability as much as on formal reopening.

Scenario 4 — Judicial intervention. An injunction or final court ruling may suspend or invalidate part of the measure, but its effects depend on the scope and timing of the order. Courts can alter the legal position without necessarily restoring contracts, staff, payment relationships or commercial trust that were lost during the interruption.

The table summarises GCA’s qualitative assessment of each outcome against the four criteria. It is not a forecast.

GCA assessment. Across the four outcomes, market stability depends less on which outcome materialises than on how the transition is handled: whether paid authorisations and fees are recognised, whether contracts and payment relationships can be re-established, and whether enforcement against unlicensed supply is effective. Reopening alone does not restore the investment, staff and commercial relationships lost during the interruption.

Developments to monitor. The following developments will determine which outcome materialises:

•       23 November 2026: end of the initial deliberation period of the provisional measure, according to the official register of the National Congress.

•       Any ruling by the rapporteur on the requests for interim relief in the STF proceedings.

•       Any amendment or follow-up act addressing paid authorisation fees and acts taken during the interruption.

•       Official data on the blocking of unlicensed sites and payment channels.

Conclusions

•       Regulatory reversal. Brazil replaced a licensed betting regime launched in January 2025 with a nationwide prohibition in September 2026. This was a federal-government policy decision implemented through a provisional measure; SPA’s previously established supervisory capacity did not make it the autonomous author of the reversal.

•       Legitimate expectations and licence fees. Operators paid BRL 30 million per five-year authorisation and invested to meet the state’s compliance requirements. Early termination without repayment or compensation raises material regulatory-certainty concerns even where the government pursues legitimate public-health objectives. The STF public hearing of 3 November 2026 placed legal certainty, protection of legitimate expectations and transition arrangements on the record as issues for judicial analysis; the transition proposals presented there, including a period of 180 to 360 days, are proposals by participants and not decisions of the Court.

•       Government resources and fiscal consequences. The state itself invested institutional and administrative effort in setting up licensing, SIGAP reporting, AML/CFT controls and enforcement. The government forecasts BRL 12.021 billion of lower tax receipts and approximately BRL 268.8 million of lower supervisory-fee revenue during 2026–2028. Its explanatory memorandum also acknowledges that authorisation fees had already been paid in full.

•       Market channelisation and consumer safeguards. A prohibition may eliminate authorised supply without eliminating gambling demand. H2’s annualised GGR-based scenario suggests a potentially material migration to unlicensed supply, while ANJL monitoring identifies tens of thousands of suspect URLs, not proven individual illegal operators. These figures are forecasts and monitoring signals, not measured causal effects.

•       Sector-wide consequences. The abrupt change directly affects B2C and B2B operators, PSPs, employment, sports sponsorship, public revenue and player protection. The state must evaluate whether the burden of closure, the remaining licence term and incentives for future compliant market entry are being addressed proportionately.

•       Forward scenarios. Permanent prohibition, partial restoration, full restoration and judicial intervention entail different paths for market access. Each leaves open the treatment of lawful sunk investment and the credibility of future authorisations. Restoration alone would not necessarily repair the loss of investment confidence. In GCA’s assessment, market stability depends less on which outcome materialises than on how paid authorisations, contracts and enforcement against unlicensed supply are handled during the transition.

•       GCA conclusion. Legalisation is a consequential public-policy choice: it requires a regulatory architecture, public resources and private investment. Once a state has invited companies to operate lawfully under defined multi-year terms, maintaining credible and proportionate treatment of good-faith licensees is essential to regulatory certainty. In GCA’s assessment, cancelling recently issued paid authorisations without an adequate protection mechanism can undermine confidence in future regulation and may, if demand persists, leave consumers with weaker safeguards. The public-health case for intervention should be assessed alongside these medium- and long-term costs. The pending STF and congressional proceedings remain decisive for the legal outcome.

Sources and Basis

This report draws on the official text of Provisional Measure No. 1,394 of 25 September 2026 and Explanatory Memorandum No. 2114/2026, Brazilian federal legislation (Law No. 14,790 of 29 December 2023, Complementary Law No. 224 of 26 December 2025 and the ordinances of the Secretariat of Prizes and Betting of the Ministry of Finance), official records of the Federal Supreme Court and the National Congress, the Ministry of Finance’s Integrated Management Report 2025 and the Federal Senate technical note on the measure, studies by LCA Consultoria Econômica published by the Brazilian Institute of Responsible Gaming, analyses by H2 Gambling Capital and Vixio, client alerts of Mattos Filho, Demarest and Chambers, reports of Brazilian and international trade and legal press (Migalhas, iGamingBusiness, G3 Newswire, Focus GN, Veja Negócios and others), and GCA analysis.

Market models and estimates of H2 Gambling Capital, LCA Consultoria Econômica and Vixio, figures reported by the National Association of Games and Lotteries and statements made at the Federal Supreme Court hearing are third-party analysis or positions of the speakers; they are not official outcomes or findings of the Court. The LCA studies were prepared for or published by the Brazilian Institute of Responsible Gaming, an association of licensed operators. Different sources report different figures for different dates and by different methodologies (for example, counts of licences and brands, gross gaming revenue and blocked sites); such differences are stated with their sources and are not reconciled. The report reflects official records and press reports checked through 3 November 2026, including the Federal Supreme Court public hearing held that day; no decision on the requests for interim relief and no congressional vote had been reported.