Brazil’s ban on fixed-odds betting and online casinos has triggered legal and fiscal concerns, while data indicate a sharp increase in illegal betting sites following the announcement of Provisional Measure No. 1.394/2026.
Monitoring platform Bet Legal identified 428 new illegal betting sites between the announcement and Sunday, September 27, equivalent to about 143 per day, reports BNL Data. Between September 21 and 24, when President Luiz Inácio Lula da Silva was threatening a ban, 246 new sites were identified, or about 62 daily. ANJL (Associação Nacional de Jogos e Loterias) had recorded an average of 13.7 new illegal domains per day between June and August.
The increase has drawn attention to enforcement capacity. Brazil’s Prizes and Betting Secretariat has four employees dedicated to oversight, responsible for monitoring nearly 200 authorized websites and thousands of illegal operators.
Of the R$1 million allocated in 2026 for betting and lottery regulation and oversight, R$275,600 has been used. LCA Consultores estimates that illegal operators account for 38% to 44% of the market, while 77% of 2,291 bettors surveyed had used a platform engaged in illegal practices.
The prohibition also removes regulatory safeguards including facial biometrics, restrictions on minors, a credit-card ban, self-exclusion, deposit limits and daily blocking of Bolsa Família and BPC beneficiaries. These mechanisms do not apply to illegal platforms.
The decision also carries fiscal consequences. The proposed 2027 Budget includes R$5.3 billion ($1 billion) in expected revenue from the sector. The Federal Revenue Service collected R$9.9 billion ($1.9 billion) from the industry between January and August 2026, up 69% in real terms from the same period in 2025.
Operators intend to take the matter to the Federal Court of Accounts, arguing that the measure forgoes revenue without providing budgetary compensation. Market estimates indicate the existing rules would generate R$10.8 billion ($2 billion) in federal taxes, while a planned Selective Tax could have produced up to another R$2 billion ($380 million) annually.
Legal challenges are also being considered. Brazil’s 85 authorized operators each paid R$30 million ($5.75 million) for five-year concessions, totaling R$2.55 billion ($490 million), which the government has said it will not refund. Around 180 industry executives and lawyers have decided to act jointly before the Supreme Court, according to O Globo.
The effects extend to football and broadcasting. Betting companies invested about R$1.03 billion ($200 million) in Série A in 2025. Flamengo receives R$268.5 million ($51.47 million) per season from Betano, while Fluminense has been notified by Superbet about the possible termination of a R$58 million ($11 million) annual agreement.
Betano, Novibet, Superbet and Esportes da Sorte have also announced the termination of television contracts. Regulated betting companies invested R$23.6 billion ($4.5 billion) in media between January 2024 and August 2026, with television receiving 74% of that spending in 2025.
The measure was introduced nine days before the first round of elections, prompting criticism over its timing. Its electoral impact remains uncertain: an Ideia Institute survey cited by Valor found only 2% of respondents identified gambling as the main cause of their debt. New Quaest, Nexus and Datafolha polling is expected to provide an early indication of public reaction to the prohibition ahead of the first-round vote.