Brazil prepares to ban online casinos: reports

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The Backstory

A regulated market faces a political reversal

Brazil’s move toward a possible online casino ban would mark a sharp turn for a market that only recently shifted from legal uncertainty to federal regulation. The country opened its regulated online betting framework in 2025 after legislation approved in 2023 created licensing, oversight and consumer-protection rules under the Finance Ministry. That framework allowed operators to offer sports betting and online casino products under joint licenses, a structure that now complicates any attempt to separate the two.

The reported executive order would leave sports betting intact while prohibiting online casino games. That distinction may be politically useful, but it cuts across the business model of many license holders. The government has authorized 188 operators with combined online casino and sports betting licenses, and industry data cited by the National Association of Gaming and Lotteries indicate casino games account for roughly three-quarters of operator revenue. A ban would therefore target the economic core of the regulated market while preserving the lower-revenue vertical.

The proposal follows President Luiz Inácio Lula da Silva’s increasingly public criticism of digital gambling. In a recent message, Lula said his personal position was to “end betting,” and he has framed the issue around household finances, addiction and the social cost of gambling on mobile phones. That concern was set out more explicitly in his earlier call for legislation to ban online casino platforms, where he argued that gambling losses were draining money from food, rent, school expenses and children.

From legalization to pressure over addiction

The political backlash has built quickly because Brazil’s gambling expansion has been highly visible. Sports betting had already become a major consumer market after opening in 2018, and Brazil ranked behind only the U.S. and U.K. in 2023 sports betting traffic, according to Comscore data cited in prior reporting. Market forecasts have pointed to continued rapid growth, with Data Bridge Market Research estimating sports betting revenue could reach $19.2 billion by 2032.

That growth has coincided with concerns that regulation arrived after betting behavior had already become widespread. The Finance Ministry has estimated Brazilians may be spending as much as BRL60 billion a year on betting. During the World Cup, the government moved to curb the most aggressive marketing practices after a fintech report said more than a third of the population had placed bets on the tournament. Brazil then announced stricter online betting advertising rules, including mandatory addiction and financial-loss warnings and bans on ads presenting betting as easy money.

Those measures suggested a regulatory path built around containment: warnings, ad limits, enforcement against illegal sites and tighter control over licensed conduct. The proposed casino ban would go further. It would move from regulating product design and promotion to prohibiting a major product category already covered by licenses. That raises legal and fiscal questions, including whether operators could seek compensation for restrictions imposed after they paid fees and entered the market under government rules.

Licenses, taxes and the cost of uncertainty

The stakes are not confined to operators. Treasury data show Brazil collected almost BRL10 billion in licensing fees and gambling taxes in 2025. If online casino revenue accounts for most operator income, removing that product would likely reduce tax receipts and weaken the commercial rationale for licensing. It could also affect advertising, sponsorships, technology providers, affiliates and payment companies that built operations around the regulated market.

Industry warnings about instability are not new. At iGB Live, legal and affiliate executives said Brazil needed clearer rules and coordinated enforcement rather than abrupt policy shifts. In a discussion on the first months after legalization, market participants called for more certainty in the Brazilian igaming market, pointing to possible tax increases, backdated tax threats, affiliate restrictions and continuing legal challenges to the gambling law.

That debate is central to the current proposal. Operators entered the regulated market amid a 12% sector tax, corporate taxes, licensing costs and compliance obligations. Suggestions that the operator tax could rise to 18% had already unsettled companies. A product ban would be more consequential because it could strand investments made under the assumption that online casino and sports betting would remain jointly regulated.

Affiliates are also part of the channelization issue. Prior reporting from Brazil noted that many players struggle to distinguish licensed sites from illegal operators and that affiliates play a large role in directing users to regulated platforms. If legal operators lose the right to offer casino games, consumers seeking those products may not stop gambling. They may shift to offshore sites outside Brazilian enforcement, taxation and consumer-protection rules.

Illegal operators remain the policy dilemma

Brazil has already tried to tighten the system around illegal gambling. Lula signed a decree allowing authorities to freeze funds tied to financial institutions, payment providers and promoters serving illegal platforms. The government has also pursued ad controls and enforcement actions meant to push consumers into licensed channels. That strategy depends on regulated operators remaining visible and commercially viable.

The danger for policymakers is that a casino ban could narrow the legal market without eliminating demand. Other jurisdictions have faced similar tensions when seeking to reduce gambling harms through advertising or product restrictions. In the Philippines, a debate over a total gambling advertising ban has produced warnings that such measures could hand the market back to illegal operators. A detailed analysis of gambling advertising bans and illegal-market growth found that blanket restrictions tend to bind licensed companies while offshore sites continue marketing through harder-to-police digital channels.

The comparison is imperfect because Brazil is weighing a product ban rather than an advertising ban. But the policy mechanics are similar. A prohibition that applies to licensed companies can reduce the legal supply of a product while leaving illegal suppliers to capture residual demand. That risk is especially acute online, where offshore casinos can change domains, use informal marketing networks and operate without age checks, responsible-gaming tools or local tax obligations.

Brazilian regulators have sought to avoid that outcome by pairing stricter consumer safeguards with enforcement against unauthorized platforms. The current proposal tests whether that balance can hold when the government’s public-health concerns collide with the financial architecture of the regulated market.

Responsible-gaming push meets prohibition politics

The industry has responded to Brazil’s tighter posture by emphasizing responsible gambling and compliance. The Brazilian Institute for Responsible Gaming, established in 2023, has positioned itself around ethical and sustainable online betting, illegal-market enforcement and player protection. Philippine operator DigiPlus recently joined the group as part of its Brazil expansion, saying it wanted to grow in the country while complying with local rules. Its entry into the Brazilian Institute for Responsible Gaming placed it alongside international operators such as BetMGM, bet365, Betsson, Entain, Flutter and Kaizen Gaming.

Such moves reflect the industry’s preferred argument: that Brazil can reduce harm by making legal operators more accountable, not by removing products from the regulated market. Compliance groups, advertising restrictions, payment controls and responsible-gaming tools all presume that licensed operators remain the main point of contact between the state and bettors.

Lula’s position reflects a different political calculation. If the government concludes that online casino games are driving addiction and household financial distress, it may decide that regulation is insufficient. The reports suggest sports betting and sponsorship agreements involving clubs and competitions would be spared, likely reducing the political fallout in Brazil’s sports economy. But that carveout would not fully insulate operators whose licenses and revenues depend on both verticals.

The result is a high-stakes test of Brazil’s young gambling regime. The country can continue refining a regulated market through advertising limits, enforcement and responsible-gaming obligations, or it can remove online casino from the legal framework and accept the litigation, revenue and channelization risks that follow. The decision will determine whether Brazil’s gambling policy remains a managed market or shifts toward selective prohibition less than a year after regulation took effect.