The 85 federal authorizations held by 82 companies to operate fixed-odds betting in Brazil expired yesterday, when the 30-day period in Article 4 of Provisional Measure (MP) 1.394/2026 ended.
Each authorization cost R$30 million ($6 million) for five years, plus a R$5 million ($1 million) security deposit. Almost 190 brands lost authorization without reimbursement.
Launch to ban
The regulated market opened in January 2025 under Law 14.790/2023, with licenses from the Prizes and Betting Secretariat (SPA) of the Ministry of Finance. The framework introduced accredited international laboratories, problem gambling programs, KYC rules with biometric identification, and an oversight fee.
President Luiz Inácio Lula da Silva’s MP 1.394 took effect on the night of September 25. The text prohibits betting offers and advertising to “protect families from indebtedness,” classifies the authorizations as precarious, and revokes most of Law 14.790/2023.
Operators stopped taking deposits and bets immediately and had only a few days to return customer funds. Authorized websites and applications went offline on October 6.
Operators’ capital on the line
Operators paid R$2.55 billion ($510 million) for the grants and contributed approximately R$7.5 billion ($1.5 billion) in share capital, according to Carlos Lima, CEO of the Brazilian Institute for Responsible Gaming (IBJR).
LCA Consultoria Econômica and Cruz Consulting calculate a multiplier effect of up to R$28 billion ($5.6 billion). The resources funded CPF verification, facial recognition, Betting Management System (Sigap) integration and contracts with football clubs, arenas and technology providers.
“Legal certainty translates into the predictability necessary for long-term investments,” Lima said. “Companies have structured complex operations planned for amortization over 60 months.”
A National Association of Games and Lotteries (ANJL) survey found that more than 3,500 workers were laid off in the first 14 days of the MP, while LCA estimates that the ban puts up to R$73 billion ($14.6 billion) in revenue at risk between 2027 and 2030.
IBJR warned that unreimbursed early termination can raise investor risk perception in telecommunications, airports, ports and other regulated markets.
Congressional clock
Congress has until November 25 to analyze MP 1.394, or until early March 2027 with a 60-day extension. The measure will block the agenda of the National Congress from November 9.
As of October 23, the joint committee was not yet established and had no president or rapporteur. Most of the nearly 100 amendments would maintain sports betting but exclude online casino.
Lima said a rejection after October 25 could restore the activity’s legal basis, but the status of expired authorizations would remain open.
“What will happen to the regulatory process? Will a new grant payment be necessary? The scenario is legally uncertain,” he said.
Bettors off the grid
“The elimination of the authorization disconnects the unified self-exclusion database and the mandatory limit controls operated by the companies, causing the State to lose real-time visibility of user behavior,” Lima said.
More than 1 million bettors had registered for self-exclusion by July 2026, and SPA says 25.2 million people, all identified by CPF, bet on authorized sites in 2025.
LCA Consultores’ “Off the Radar 2.0” study for IBJR, with Locomotiva Institute research, estimated that the illegal market’s share fell from 41%-51% in 2025 to 38%-44% in the first half of 2026.
ANJL’s Legitbet tool found 221 new clandestine addresses between October 9 and 12, for a total of 30,844 accessible irregular pages.
According to Lima, these sites do not collect taxes in Brazil, require no identity verification or facial recognition, offer no self-exclusion tools, and operate outside oversight by the Council for the Control of Financial Activities (COAF) and the Federal Police. Scammers also replicate the names and visual identities of formerly licensed brands for financial fraud, he added.
Court ruling pending
On September 28, IBJR and ANJL asked the Supreme Federal Court (STF) in Direct Action of Unconstitutionality (ADI) 8.027 to suspend the MP until a new public hearing or a congressional deliberation.
Football clubs and the Brazilian Association of Radio and Television Broadcasters (Abert) also sued. The Attorney General’s Office (AGU) proposed a hearing but wants the MP in force until then. Rapporteur Justice Luiz Fux has not ruled on the injunction, and no judgment date is set.
IBJR said the delay hinders layoff containment and gives clandestine platforms time to absorb demand. At a hearing, IBJR plans to propose stricter measures, including automatic deposit limits per CPF, mandatory pauses after continuous use, advertising risk warnings, and the blocking of IP addresses, DNS, and payment methods linked to unauthorized sites.
“Regulated companies accept and defend the continuous strengthening of the regulatory framework, understanding that the constant improvement of the rules is the only way to protect the consumer without directing them towards illegality,” Lima said.
The MP’s Article 10 requires operators to keep registrations, transaction histories, and access logs for at least five years.