Brazil sets 6 October deadline for betting market shutdown

Brazil’s government has set out the timetable for dismantling the country’s regulated betting market, with operators prohibited from accepting new deposits and required to make their websites and applications unavailable from 6 October.

Provisional Measure No. 1,394, signed by President Luiz Inácio Lula da Silva and published on 25 September, prohibits the operation, offering, intermediation and advertising of fixed-odds betting throughout Brazil.

The measure covers bets on real sporting events and online games offered through physical or virtual channels. It also applies to offshore operators targeting people located in Brazil and extends to authorisations issued by states and the Federal District. Other lottery products authorised by law are unaffected.

The measure took effect immediately and prevents the granting of new fixed-odds betting authorisations. Existing federal, state and Federal District authorisations will formally expire 30 days after publication, although operators must stop offering bets considerably sooner.

New player deposits have been prohibited since the measure was published. Bettors may withdraw their available balances voluntarily until 23:59 on 5 October, while operators must make their websites and applications inaccessible from 6 October.

Bets that remain unresolved when the platforms are disabled will be void, with operators required to return stakes in full and without deductions. Winnings from bets settled before the deadline must still be paid.

Within two days of disabling their platforms, operators must ensure sufficient funds are available and provide banks and payment institutions with individualised details of the amounts owed to each bettor.

The information must include the bettor’s CPF registration number, the amount due and the account from which the original payment was made.

The government’s timetable gives operators 7 and 8 October to provide the information. Banks and payment institutions will then process repayments between 9 and 14 October, returning the money to an active account held in the bettor’s name and preferably to the account from which the funds originated.

Where repayment cannot be completed, the financial institution must transfer the outstanding funds to a dedicated account at Caixa Econômica Federal. Caixa will administer the subsequent restitution process under the supervision of the Ministry of Finance.

Funds reserved for customer repayments must remain segregated from operators’ other assets. Operators will remain responsible for shortfalls, discrepancies and outstanding obligations, while records connected with their authorised activities must be retained for at least five years.

The measure also prohibits communication, advertising, marketing and sponsorship relating to fixed-odds betting across physical and digital media.

New advertising arrangements are prohibited immediately, while existing material must be removed by 23:59 on 5 October. The ban covers content directed at the Brazilian public that offers, promotes or facilitates access to betting, regardless of its format or payment model.

Breaches may be treated as abusive advertising under Brazil’s Consumer Defence Code, exposing those responsible to administrative sanctions, counter-advertising orders and possible civil and criminal liability.

Although Provisional Measure 1,394 has immediate force of law, it remains subject to Congress. It has an initial validity of 60 days and will be extended automatically for another 60 days if the Chamber of Deputies and Senate have not completed their consideration during the initial period.

Congress may approve, amend or reject the measure. The MP therefore creates an immediate shutdown even though its longer-term survival depends on Congress.

Brazil betting industry weighs Supreme Court challenge to Lula ban

Brazil’s betting industry is preparing a coordinated legal response to the country’s newly imposed gambling ban, with operators weighing a Supreme Court challenge aimed at preventing their websites and applications from being shut down on 6 October.

Representatives of operators, trade associations and associated businesses met after President Luiz Inácio Lula da Silva signed Provisional Measure No. 1,394 on 25 September. Around 180 industry representatives reportedly agreed to coordinate their response rather than immediately launching separate proceedings.

The industry’s immediate objective is to secure an injunction suspending the measure and allowing regulated operations to continue. However, the precise form and venue of the proposed challenge had not been finalised.

Options under consideration reportedly included a direct action of unconstitutionality before the Supreme Federal Court and a collective writ of mandamus. More than one industry association could participate in coordinated proceedings, while operators were being encouraged to avoid bringing individual claims before the collective strategy had been settled.

The National Association of Games and Lotteries has said it is taking the necessary legal steps to challenge the prohibition. ANJL president Plínio Lemos Jorge has put the likelihood of coordinated action at 98%.