Luiz Inácio Lula da Silva will be wondering if he played his cards right by the time all the votes are counted in Brazil’s impending election, where he faces Flávio Bolsonaro in a contest that remains too close to call.
In an ironic twist of fate, the sitting President of Brazil seems to have pulled out an ace in one of the most stunning pre-election moves in recent memory: banning online gambling less than two years after his government’s push to regulate the sector came into effect.
The move is expected to be popular, with different surveys reporting that 65 to 75 per cent of Brazilians favouring a complete ban on online betting platforms – including supporters of Mr Bolsanaro.
Time will soon tell whether Lula’s last-ditch effort to secure a fourth term at the helm of South America’s largest country, but the impact of his daring gamble will leave a lasting impact on the iGaming sector’s relationship with Brazil.
Speaking to WhosWho.mt, GTG Partner Terence Cassar says the industry “right now is in shock” as everyone “tries to figure out what the next steps should be.”
A lawyer with a special focus on gaming and betting law, Dr Cassar recounts Brazil’s long journey to a regulated iGaming sector.
“The framework that is being repealed, less than two years since it came into effect, had been coming for many years,” he says. “It took so long that it almost became a joke.”
Online gambling became legal in Brazil in 2018, but was left largely unregulated until relatively recently, with a process kicking off in 2023 culminating in the current licensing regime coming into effect on 1st January 2025.
Standout Software CEO Justin Paul Anastasi says Brazil effectively “invited iGaming firms to pay for licences, hire locally, and invest heavily in building compliant operations,” an observation echoed by Dr Cassar who highlighted the “heavy investment in corporate structure and product required” by industry players to become operative in the country.”
The ban effectively constitutes a hugely significant U-turn that leaves trust in the Brazilian market in tatters.
Several firms have issued revised guidance in the days since the ban was announced, with Entain saying revenues are expected to drop by around 5 per cent and Flutter announcing a $20 million hit to its EBITDA. Allwyn AG, which holds a 36.75 per cent stake in Kaizen Gaming, operator of market leader Betano, said its forward guidance would be scrapped if it remained barred from operating for the remainder of 2026.
However, the more lasting impact may be in Brazil’s credibility, argues Mr Anastasi.
“What if they open the market again? Will these companies remember how quickly the rules changed, and how they were treated? So the longer term damage is to Brazil as a market where companies in the gaming space would want to invest in the future.”
Dr Cassar meanwhile highlighted the legal minefield gambling operators and other stakeholders will now have to navigate.
“Even the act of marketing gambling has been prohibited, so where does that leave Brazilian football teams?” he asked. “Sponsors and sports club will need to sit down together on this, but it will be tough to figure it out. In theory, it’s nobody’s fault, but some sort of solution will need to be found.”
Many of the firms headquartered or otherwise operationally present in Malta have invested heavily in the Brazilian market over recent years, but both market insiders believe the impact on the local industry will likely be limited.
Dr Cassar notes that while the impact on Malta still needs to be seen, most companies’ Brazilian presence would be via corporate entities not based in Malta.
“Obviously, the immediate impact will depend on just how exposed each individual operator and supplier is to Brazil,” adds Mr Anastasi. “If the ban persists, I wouldn’t exclude that Brazil will need to somehow compensate these companies.
“It’s kind of like they’ve been duped.”
Main Image:Brazil President Luiz Inácio Lula da Silva
