Less than two years after Brazil legalized online gaming and sports betting, President Luiz Inácio Lula da Silva announced a ban on the industry last Friday.
The move comes as Lula is locked in a re-election battle with Flávio Bolsonaro, son of former President Jair Bolsonaro. The provisional order “prohibits all sports betting and online casinos.” It also brings major uncertainty into online gaming in South America’s most-populous country.
In announcing the ban, Lula called the industry a “cancer.” He said, “Either we remove the tumor, or it kills us.”
President Adds Criminal Offenses
Recent polling has shown Lula and Bolsonaro in a close race. The first round of voting begins on Sunday. If no candidate achieves a majority, a runoff would then be held on Oct. 25.
Along with banning online wagering, the president signed legislation that makes offering fixed-odds betting a crime, according to the BBC. Sports betting operators can no longer accept new deposits and gamblers have until Oct. 5 to withdraw funds.
The legislature must approve both measures within 120 days for them to remain in effect. The Lula administration claims there are no restrictions in place to prevent minors from wagering. And it says the industry is having a negative effect on society.
“We won’t allow betting companies to profit at the expense of Brazilian families’ income and lives,” said Lula, who is seeking a fourth term in office. Some reports indicate that almost 60% of Brazilians support an online gaming ban.
Opposition Candidate Challenges Move
Brazil legalized online gaming in 2018 but didn’t begin officially regulating the industry until 2023. The country of almost 214 million people has been a particular hotspot for online poker operators. That has included Brazilian soccer superstar Neymar Jr. becoming a PokerStars ambassador and making headlines for his play on the felt.
Bolsonaro said the move was “populist, hypocritical, and politically motivated.” However, he has also supported a ban on online casino gaming in the past, while making an exception for sports betting, according to Notícias RedeTV.
Those in the industry have also decried the ban. The National Association of Games and Lotteries (NAGL) trade group plans to appeal the order in court and recover funds paid for five-year licenses.
“The compensation claim would cover not only the 30 million reais [$5.8 million], but also material damages arising from all the investments made by the industry, and moral damages,” NAGL President Plínio Lemos Jorge said.
The presidential order is expected to hit Brazilian soccer clubs hard. The industry is now a major source of revenue for clubs, with the soccer-mad country’s major franchises raking in $212 million last year, according to Brazilian broadcaster Globo.
One of the country’s largest clubs, Grêmio, said curtailing online gaming “will not only be an open door for illegal betting but a fatal blow to Brazilian football, leading many clubs to insolvency.”
A similar prohibition has affected English soccer clubs. The English Premier League officially banned unlicensed gambling sponsorships earlier this year.
