Lula's re-election leaves Brazil's regulated betting market in limbo

Lula da Silva has won a fourth term as Brazil's president, becoming the first candidate to take the second round of voting after losing the first round since the country returned to democracy in 1985, according to SBC News.

Lula secured 51.79% of the vote against 48.21% for Flavio Bolsonaro, a margin of more than four million votes. Bolsonaro has called for the result to be annulled over a last-minute Supreme Court decision to extend polling by two hours, though SBC News reports this is unlikely to succeed.

The result is bad news for Brazil's regulated gambling industry. Nine days before the first round on 4 October, Lula announced plans to reverse the 2024 Bets Law, the legislation he himself approved that opened Brazil's regulated online betting market on 1 January 2025.

Bolsonaro's Liberal Party had also floated the idea of a ban but, with more business-friendly voices in its ranks, criticised Lula's move as a pre-election manoeuvre rather than backing the industry outright. The party called instead for drastic reform of the regime.

With the presidency no longer a route for operators, attention has shifted to Congress and the judiciary. Lula's ban was issued as a Provisional Measure, an emergency decree that must be confirmed within 60 to 120 days. Bookmakers were ordered to shut down entirely by 25 October, with player withdrawals required by 5 October.

Provisional Measures can be struck down by Congress, and this month's congressional elections have strengthened the Liberal Party's hand, taking it to 121 deputies and 29 senators. SBC News notes the broader makeup of both chambers leaves a real possibility that Lula's measure could be rejected or amended, with more pro-regulation voices in Congress than in the federal government itself.

A second avenue runs through the Supreme Court, where Justice Luiz Fux could strike down the measure. That would not restore the five operator licences already revoked, a move that has already prompted some firms to consider legal action, but it would halt the ban and give operators and sympathetic lawmakers room to build a new licensing framework.

Regulus Partners, a global strategic advisory firm, said after the election that it does not expect Fux to overturn the ban, nor does it expect the licences held in 2025 and 2026 to be reinstated, leaving the sector "in limbo", according to a Regulus blog post cited by SBC News.

"This scenario is likely to be resolved by more protracted lawfare, in our view," the firm said, adding: "If Lula's allies achieve concrete legal progress in suing the post-licensed sector for player losses, then this will probably bury the industry despite the lack of legal clarity on the ban."

SBC News reports that many industry stakeholders now expect legal sports betting to eventually return while online casino products are removed for good, given their closer association with gambling-related harm.

The uncertainty comes after international operators including Flutter Entertainment, Kaizen Gaming, Super Technologies, Entain and bet365 invested heavily and expanded local hiring over the past two years. With Lula, who has described himself as "no friend of gambling", back in office, the risk profile for further investment has risen sharply.

Lula has previously struggled to reshape the gambling sector. In 2025, he and then-finance minister Fernando Haddad failed to secure enough congressional support for a plan to double gambling taxes. SBC News reports that Lula's Workers' Party is also wary of legal challenges that could arise from its latest measures, including potential compensation claims from the football, media and technology sectors.