With President Luiz Inácio Lula da Silva signing Provisional Measure 1.394, which prohibits fixed-odds betting throughout Brazil, the country’s gambling sector has been seeing a real shakeup as multiple gambling companies have been closing their doors. As a result, thousands of employees have lost their jobs. According to the National Association of Games and Lotteries (ANJL), over 3,500 workers have already been laid off.
Gambling Industry Is Starting to Feel the Consequences
The measure, which is part of President Lula’s increasingly stricter stance on gambling, could jeopardize even more workspaces. ANJL’s survey, based on partial data collected by BNLData, shows that 23% of the sector’s workforce has been laid off, while a further 28% (about 4000 employees) has been placed on collective leave. Together, these figures account for 51% of the workforce, meaning over 7,600 workers have either lost their jobs or been placed on collective leave in less than two weeks since the measure took effect.
Although these measures do not constitute formal dismissals, ANJL has warned that delays in the Supreme Federal Court’s (STF) ruling on the injunction request to hold the gambling ban could ultimately lead to some of these workers being dismissed. The association estimates that job cuts could reach 5,600 within 90 days.
The wider gambling industry is also feeling the hit from these job cuts. For example, in an interview for NEXT.io, Isabella Koon, chief commercial officer at Full Company, which supports affiliates and tipsters, said that only three of the 13 affiliates she works with directly have retained their entire teams. The remaining 10 have laid off all their staff, Koon said. Before the cuts, these affiliates were generating average monthly deposits of between BRL 3 million and BRL 5 million (about $600,000 to $1 million) for betting operators.
Lemos Jorge, president of ANJL, explained that the term “betting industry” accurately reflects the sector’s nature, as it encompasses a wide range of businesses. This includes payment processors, marketing and compliance firms, agencies, affiliates, and specialized media outlets, all of which have started feeling the repercussions of the Provisional Measure.
The Ban Raises Concerns About the Growth of Illegal Gambling
President Lula’s Provisional Measure has sparked concerns about the growth of the illegal gambling market now that legit online operators are banned. According to BandTV, the number of active illegal links has increased from nearly 9,000 the day after the ban came into force to more than 40,000. Meanwhile, the government reports that it had blocked over 13,000 illegal platforms by October 6.
The Brazilian Institute of Responsible Gaming (IBJR) estimates that approximately 60% of the gambling market, which is valued at BRL 40 billion (about $8 billion) annually, continues to operate through illegal websites. However, these figures originate from industry associations and surveys with no identified authors and have not been independently verified.
Meanwhile, Blask, a gaming market intelligence firm, paints a much grimmer picture for the future of gaming in Brazil. According to the company, more than 21 million people could be pushed into illegal gambling. For comparison, the country currently has a player base of just over 25 million, meaning that 86% of them might be playing on offshore and illegal platforms, posing a serious risk to their well-being, financial and personal information.