Brazil's Lula Bans Online Betting Ahead of Election

President Luiz Inácio Lula da Silva signed an executive order banning online betting in Brazil on Friday. The provisional order prohibits all sports betting and online casinos, taking effect upon publication but requiring congressional approval within 120 days to remain permanent.

The announcement comes just nine days before the first round of voting in Brazil's presidential election. Lula is seeking a fourth term as president, running against Flávio Bolsonaro, the son of the incarcerated former president Jair Bolsonaro. Recent polls show the 80-year-old Lula almost neck-and-neck with his rival.

Timing and political context of the ban

The ban was announced just over a week before the first round of voting. Lula is seeking reelection in the upcoming presidential election against Flávio Bolsonaro. This timing directly links gambling policy to the intense political contest.

Background and justification for the ban

Online gambling was legalised in Brazil in 2018. Since then, it has been blamed for widespread household income losses due to addiction. Lula framed the industry as a societal cancer. He acknowledged it was allowed under former President Michel Temer but said it grew without regulation under Bolsonaro's management.

Lula said there were no restrictions to prevent children and adolescents from accessing online betting. He stated he heard from families who sold everything in their houses due to gambling addictions. Earlier this week, at the United Nations General Assembly, Lula accused the industry of transforming addiction into profit. "Either we remove the tumour, or it kills us," Lula said. He added, "We won't allow betting companies to profit at the expense of Brazilian families' income and lives."

Opposition and industry response

Flávio Bolsonaro denounced the crackdown during a campaign rally in Rio de Janeiro on Friday. He called it populist, hypocritical and politically motivated and accused Lula of playing politics.

Industry groups warned of severe economic consequences. The Brazilian Institute for Responsible Gaming, which represents around 75% of the domestic betting sector, said a total ban jeopardises the industry and could wipe out 58-73 billion reais in revenue. The group stated the ban breaks with the regulatory framework established less than two years ago and does not eliminate existing demand.

The National Association of Games and Lotteries is preparing a court challenge to overturn the order. Its president, Plínio Lemos Jorge, said the compensation claim would cover the 30 million reais license fee, material damages from investments, and moral damages. Administrative law professor Alexandre Santos de Aragão noted current law already provides that licenses may be revoked at the government’s discretion.

Implementation and economic impact

The order sets a strict timeline for winding down operations. New deposits to online betting accounts are immediately barred. Punters and bookies have until October 5 to withdraw existing funds. Betting websites and apps will be taken offline on October 6.

Over the following two days, operators must provide banks with each bettor’s remaining balance, taxpayer identification number, and the account used for transfer. Banks must return the funds between October 9 and October 14. State-owned bank Caixa Econômica Federal will handle payments that cannot be completed through that process beginning October 14.

Most types of gambling, such as casinos and slot machines, remain illegal in Brazil. Lula's government has also drafted a bill to establish criminal offenses related to fixed-odds betting. Banks must return funds to bettors between October 9 and October 14, with Caixa Econômica Federal handling unresolved cases from October 14.