Brazil’s Supreme Federal Court (STF) heard opposing arguments on the government’s ban on fixed-odds betting during a public hearing on Tuesday (3 November), with industry representatives, sports organisations and government officials debating its economic and legal implications.
Provisional Measure (MP) 1.394/2026, signed by President Luiz Inácio Lula da Silva on 25 September, abolished Brazil’s regulated betting market and faces eight constitutional challenges. Justice Luiz Fux, who presided over the hearing, has not set a deadline for a ruling.
The measure’s initial 60-day congressional review period expires on 23 November and can be extended automatically for another 60 days, potentially delaying a vote until early 2027.
The Ministry of Finance defended the prohibition despite acknowledging that the regulated market had been “a significant advancement” in government supervision, the fight against illegal operators, and consumer protection.
It estimated that bettors transferred R$62 billion ($11.35 billion) to the sector, while the probability of default increased by almost 40% after individuals began betting. The ministry also estimated a R$120 billion ($22 billion) to R$140 billion ($25.6 billion) impact on GDP, with more tax lost through household losses than collected.
The Brazilian Association for Economic Freedom (ABLE) disputed the calculations, arguing that betting accounted for less than 0.5% of household consumption, compared with nearly R$700 billion ($128 billion) in household interest payments.
Official figures showed the sector paid R$9.95 billion in federal taxes and R$4.53 billion in legal levies in 2025. Industry associations argued that prohibition would undermine licensed operators while allowing illegal gambling to continue.
“I did not hear anyone here, all afternoon, say they will end illegal gambling. What I heard is that they want to end regulated gambling,” the Brazilian Institute for Responsible Gaming (IBJR) said.
IBJR and the National Association of Games and Lotteries (ANJL) requested suspension of the measure, citing legal uncertainty and the termination of licences costing R$30 million without refunds.
The Brazilian Association of Radio and Television (ABERT) reported that complaints about illegal betting advertisements rose from 2.3 a day before the ban to 8.5 afterwards.
Meanwhile, the International Gaming Association (AIGaming) proposed applying the regulatory model used for federal lotteries operated by state-owned Caixa to fixed-odds betting.
Football clubs also raised concerns about lost sponsorship revenue. Flamengo warned that approximately R$430 million ($84 million) in annual revenue and more than 1,200 jobs could be affected. Its current Betano sponsorship agreement is worth R$268.5 million ($49 million) annually before bonuses, totalling R$895 million ($163.82 million) through December 2028.
Fluminense cited R$11 billion ($2 billion) in betting-sector taxes collected between January and September 2025, warning that lost revenue could complicate Brazil’s tax reforms.
The State University of Rio de Janeiro (UERJ) proposed eight safeguards as an alternative to prohibition, including nationwide betting limits, restrictions on credit-funded wagering, stronger self-exclusion systems, advertising controls and mandatory funding for gambling treatment.
Meanwhile, Justice Minister Wellington César Lima e Silva defended the ban as “relevant and urgent”, while Attorney General Jorge Messias argued that existing protections were insufficient. The Ministry of Health cited research linking gambling disorder to a 15-fold increase in suicide risk among hospital patients.
Fux said the court would consider the constitutional arguments and whether the dispute should instead be resolved by Congress. Any individual ruling would require subsequent review by the full Supreme Court.
The hearing concluded without a decision on whether the ban would be suspended, maintained, or implemented through transitional arrangements.