Brazil’s federal government has sued 17 betting companies, seeking at least R$1 billion ($191 million) in collective moral damages and reimbursement for public healthcare costs associated with gambling addiction.
The lawsuit, filed in the Federal Court of Pernambuco, follows President Luiz Inácio Lula da Silva’s announcement of an executive order ending online betting. Industry groups have separately asked the Supreme Court to suspend the measure, opening competing legal proceedings around Brazil’s betting market.
The government says existing contributions from betting operators do not cover healthcare expenses linked to high-risk gambling. Current rules direct 0.12% of operators’ revenue to the Ministry of Health, with R$50 million transferred during the latest cycle. Preliminary Health Ministry studies estimate treatment costs at R$2.6 billion ($496 million).
Government Targets Betting-Related Health Costs
The Attorney General’s Office says the 17 companies named in the case account for about 80% of Brazil’s fixed-odds betting market. The government wants operators to reimburse the Unified Health System (SUS) for expenses associated with treating gambling-related conditions.
The precise reimbursement amount would be established during the proceedings. The claim covers five years before the lawsuit and could continue while damages recognised by the court persist.
The government is also seeking double repayment of amounts wagered by people diagnosed with gambling disorder. It says 10.9 million of Brazil’s 28 million current gamblers display patterns of high-risk or problem gambling.
According to the government, treatment for pathological and excessive gambling through the public health system increased by 140% between January 2018 and December 2025.
“The defendant companies privatise significant profits derived from the financial collection from millions of bettors, while transferring the budgetary cost resulting from collective illness to the SUS and to society as a whole,” says the AGU in the lawsuit.
The government filed the case in Pernambuco, citing the Northeast’s concentration of socioeconomically vulnerable people involved in high-risk gambling.
Industry Seeks Supreme Court Intervention
The National Association of Games and Lotteries and the Brazilian Institute for Responsible Gaming have asked the Supreme Court to suspend Lula’s executive order.
The groups argue that the measure affects legal certainty, freedom of enterprise, consumer protection and Brazil’s federal system. They are seeking an injunction while Congress considers the order or the court reviews it.
If the main request fails, the groups have asked for authorised operators to receive an exemption or for enforcement to be delayed by six months. The filing states that 85 authorised companies currently operate 186 brands in Brazil.
Industry representatives have also warned that the ban could encourage users to move to illegal platforms. “The most effective measure is to keep them in a regulated and safe environment,” they said in the filing.
Authorities Pursue Unauthorized Platforms
Government agencies have alsostepped up action against unlicensed betting services. A task force identified 506 websites suspected of offering unauthorized betting and seven social media advertisements that appeared after the measure was issued.
Under the government’s stated timetable, licensed betting sites will be blocked in Brazil from October 6.
Source:
“Brazil Sues Betting Companies, Seeks $191 million in Damages and Reimbursement for Public Healthcare System“, folha.uol.com.br, September 29, 2026