Stake to appeal Brazil court's reversal of betting ban injunction

Stake's legal team will pursue further action in Brazil after a federal court overturned an injunction that had temporarily shielded the operator from a nationwide betting ban, iGaming Business reports.

President Luiz Inácio Lula da Silva banned licensed betting in Brazil in late September. Stake initially secured a preliminary injunction allowing it to keep operating until 25 October, but the following day Judge Luis Antonio Johonsom di Salvo, president of the Federal Regional Court of the 3rd Region (TRF-3), suspended that protection, putting the operator back under the ban.

Udo Seckelmann, a partner at Bichara e Motta Advogados, the Brazilian firm representing Stake, confirmed to iGaming Business that the company intends to fight the decision. "Of course, this is not over," he said. "This is just one setback that happened. We are drawing up some strategies to overturn this."

Seckelmann said the firm was weighing two possible legal strategies without disclosing their grounds, adding that a favourable outcome could have implications beyond Stake. "If we get a positive decision in the next couple of days, maybe other operators will get that too," he said. "So we know the degree of responsibility that we have for the whole industry."

Much of the operator's case rests on the scale of investment made to enter Brazil's regulated market, which launched on 1 January 2025. Licence holders including Stake paid a BRL30 million ($6 million) fee and were required to hold a financial reserve of at least BRL5 million, alongside establishing a headquarters in the country.

Seckelmann argued the reversal undermines the legal certainty operators relied on when they entered the market under a five-year licence. "And from one moment to another, before we reach the two-year landmark of this licence that would be valid for five years, you say now it's over, that activity is prohibited," he said.

He also disputed the justification behind the ban, arguing it was not supported by evidence tying licensed operators to Brazil's publicised problems with gambling debt and addiction. "The reasoning that was raised by the federal government to issue the provisional measure, it was not grounded on any relevant studies and statistics," he said, adding that illegal gambling, not the regulated market, was "growing a lot in Brazil."

The injunction was overturned at the request of Brazil's Attorney General's Office (AGU), which argued the ruling gave Stake an unfair competitive advantage over rival operators. Seckelmann suggested the AGU had deliberately directed its appeal to the TRF-3 president because of his perceived alignment with the federal government, calling the resulting decision political and noting it "doesn't raise any arguments," relying instead on general principles.

A partial survey by the National Association of Games and Lotteries found more than 3,500 workers have already been laid off across Brazil's betting sector since the provisional measure was issued.

Stake's case runs alongside a broader constitutional challenge at the Supreme Federal Court (STF), brought by two of Brazil's main gambling trade bodies seeking to have the ban overturned. Seckelmann said that challenge is unlikely to be resolved before the second round of Brazil's elections, scheduled for 25 October.