Brazil’s regulated gambling industry faces an uncertain future following President Luiz Inácio Lula da Silva’s re-election on 25 October. Research firm Regulus Partners believes the result makes the outlook considerably worse for licensed operators, although it does not resolve the legal and political questions surrounding the country’s online gambling ban.
Lula’s victory has weakened hopes that the government would reverse its decision to prohibit online sports betting and casino gambling. The ban was introduced through Provisional Measure 1.394/2026 on 25 September and took effect before Congress had completed its review.
The measure requires congressional approval to become permanent. Until lawmakers resolve its status, operators face uncertainty over whether the regulated market can return, in what form it might operate and whether existing licences will retain any validity.
Four Possible Outcomes
Regulus Partners has outlined four potential scenarios for Brazil’s gambling sector, describing all of them as considerably more complicated than the outcome that might have followed a victory by Flávio Bolsonaro.
The first possibility is that Supreme Court Justice Luiz Fux challenges the validity of the provisional measure or suspends it pending congressional approval. Regulus assigns this scenario a probability of around 5%, while warning that a favourable ruling would not automatically restore licences.
A second possibility is that Lula’s allies secure a simple majority in both chambers of Congress to approve the ban. Regulus also places the likelihood of this outcome at approximately 5%, noting that political gridlock could delay the development of a replacement framework for years.
A third scenario involves Congress amending the measure into a compromise law. This could preserve some parts of the regulated market while introducing substantial restrictions on influencer advertising, slots, crash games or online casino gambling more broadly. Regulus estimates the likelihood of this outcome at around 10%.
The research firm considers the fourth scenario the most likely, assigning it an 80% probability: the provisional measure expires, but existing gambling licences also lapse, leaving the industry in prolonged legal uncertainty.
Could Provincial Licensing Offer a Way Forward?
Regulus sees a possible alternative in provincial licensing arrangements. If federal policy remains stalled, provinces could potentially develop their own regulatory approaches, although the legal and practical implications remain unresolved.
The analysts also warn that prolonged uncertainty could trigger litigation from both sides. Operators might pursue compensation for losses resulting from the shutdown, while government-aligned parties could bring legal actions concerning player losses in the post-licensed market.
The Black Market Remains a Major Concern
The central risk is that a prolonged ban or unclear legal framework could strengthen unlicensed gambling operators. Without a clear path for regulated businesses to operate, authorities may struggle to maintain effective oversight and consumer protections.
For the industry, the immediate priority is to establish whether Congress and the courts will provide a workable resolution. Until then, Brazil’s regulatory future remains unsettled.
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