Brazil gambling ban doomed without compromise, lawyers tell SBC Summit

Brazil's gambling industry will need to accept a series of concessions if the sector is to survive, according to legal experts speaking at the SBC Summit in Lisbon, as a ban on online sports betting and igaming took effect on 6 October.

The Provisional Measure, signed by President Luiz Inácio Lula da Silva on 25 September, bans online gambling but must be ratified by Congress within 60 days to remain in force, according to EGR.

Fellipe Fraga, chief business officer at Stellar Gaming, the parent company of EstrelaBet, described the announcement as an unfair decision operators had no choice but to comply with. He said staff had worked to hold deposits and control platforms to meet the requirements of the measure.

Fraga told the panel that operators now faced a period of uncertainty, saying the company did not know what would happen the following week but had to prepare for the possibility of an entirely different market.

The timing coincided with Brazil's presidential election on 5 October, in which neither candidate reached the 50% threshold needed to win outright. Lula took 45.16% of the vote against 47.03% for rival Flávio Bolsonaro, according to EGR, sending the race to a run-off on 25 October.

Bolsonaro has signalled he would allow online sports betting to resume, though not online casino, and has called Lula's measure desperate.

Luiz Felipe Maia, founding partner at law firm MYLaw Advogados, said the industry had been blindsided despite talks with the government in the days before the announcement. He said the measure could be summarised as the worst example of legal stability Brazil could provide to the world.

Maia said clients had struggled to understand how the president could destroy the entire industry with a single decision, despite investments made and jobs created, and despite government representatives previously attending industry events to attract companies with promises of stability.

He noted that of the 85 operators licensed in Brazil, he believed more than 50 were already struggling before the measure was introduced, and said it was unclear whether they could recover even if the measure is rejected by Congress or suspended by the courts. Maia argued the measure should not stand, citing a lack of fiscal impact study and the government's stated refusal to refund licence fees.

Bernardo Cavalcanti Freire, legal counsel at Brazil's National Association of Games and Lotteries, confirmed the body is in discussions with both Congress and the Brazilian Supreme Court as it seeks to overturn what he called the "completely illegal" measure.

Freire said Lula had not presented data to justify claims about gambling-related deaths and illnesses, relying instead on studies rather than evidence. He said the association believed it had strong grounds to secure at least a transition period for the market, adding that if an injunction were obtained, licences could return automatically.

Maia also warned that stakeholders would need to abandon a fragmented approach if the sector is to survive long term. He said operators and associations in Brazil had previously failed to collaborate, each trying to maximise its own gains, and that only now was collaboration beginning between associations and operators.