Stake granted preliminary injunction to temporarily continue operating in Brazil

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The Backstory

Brazil’s fast reversal set up the court fight

Stake’s preliminary injunction is the first major legal pause in Brazil’s abrupt turn from regulated online betting market to national prohibition. The ruling does not decide whether President Luiz Inácio Lula da Silva’s ban is lawful. It instead gives Stake Brazil limited time to keep operating while the company challenges the speed and effect of the shutdown.

The dispute began when Lula signed Provisional Measure 1,394 on Sept. 25, immediately banning the operation, offer, intermediation and advertising of fixed-odds betting across physical and online channels. The measure covered sports betting on real events and online casino games, including platforms authorized by federal, state and Federal District authorities. Complete iGaming reported at the time that Brazil had banned all sports betting and online casino gaming, with operators barred from taking new deposits or wagers from publication of the measure.

The measure gave customers a short window to withdraw funds before platforms were required to become inaccessible in Brazil from Oct. 6. Existing authorizations were set to expire 30 days after publication. Operators were also told they would not recover authorization fees or receive state compensation for the closure of the market.

That timetable is central to Stake’s case. The São Paulo Federal Court accepted that an immediate forced closure could cause irreparable harm and that the government could not bring forward the most burdensome consequences of the measure without a reasonable deadline. The injunction is narrow, but it signals that the legal battle may focus as much on process, transition and property rights as on the broader political merits of prohibition.

A regulated market lasted less than two years

Brazil’s ban represents a sharp break from the federal regulated model that became fully operational on Jan. 1, 2025 under the Secretariat of Prizes and Betting, known as SPA, within the Ministry of Finance. Operators had paid fees, built compliance operations, signed sponsorship deals and prepared products around a framework that was intended to bring a large gray market into formal oversight.

The government’s new position is that the social costs of betting outweighed the benefits of regulation. In the weeks before the provisional measure, Lula met religious groups, social organizations and other civil society representatives to discuss the sector’s impact. The betting industry was not invited to that meeting, a detail that later fed complaints that affected companies had been excluded from a decision with sweeping economic consequences.

Industry groups warned before publication that a ban would not eliminate demand and would instead push players to unauthorized sites outside the consumer protections, payment controls and advertising rules developed for the regulated market. The Brazilian Association of Games and Lotteries, or ANJL, said more than 30 million bettors could move to illegal operators. It also said it would challenge the measure in court, including over the refusal to refund authorization fees and the possibility of compensation for investments made under the regulated regime.

Those arguments now sit in the background of Stake’s injunction. A court does not need to endorse the industry’s economic case to find that the state must provide a coherent transition. The federal government, however, is expected to press the point that provisional measures have force of law from publication and that gambling policy is a legitimate area for urgent executive action, subject to congressional review.

Election politics hardened the policy shift

The ban also emerged in a volatile election setting. Lula and his main rival, Sen. Flávio Bolsonaro, both moved toward anti-igaming positions before Brazil’s Oct. 4 first-round presidential vote. In late September, Complete iGaming reported that Lula and Bolsonaro were calling for an online betting ban ahead of the presidential election, responding to growing public concern over addiction, household debt and the rapid expansion of wagering.

Lula had criticized bookmakers in campaign appearances and international remarks, saying their operations encouraged harmful behavior. Bolsonaro took a more segmented approach, arguing that online casino games should be banned while sports betting could remain because real sporting events allow some oversight. That distinction was economically significant: Bloomberg-cited figures in the earlier report said online casinos generated 70% to 80% of licensed operators’ revenue in Brazil.

Polling helped explain the political incentives. A Bloomberg-commissioned AtlasIntel poll found that 75% of voters supported a ban on online betting, while 17% opposed one. Finance Ministry figures showed 25 million Brazilians placed wagers in 2025, giving both campaigns grounds to portray the issue as a mass-market concern rather than a niche regulatory dispute.

The result was bipartisan pressure against a sector that had only recently entered the federal licensing system. Lula’s provisional measure went further than Bolsonaro’s stated preference by covering sports betting and online casinos. That broader scope magnified the fallout for clubs, media companies, payment providers and licensed operators, while also raising the stakes for courts asked to review implementation.

Football exposed the wider economic shock

The most visible backlash came from Brazilian football. Betting companies had become major sponsors across Serie A, state federations, stadium inventory and broadcast-linked commercial packages. When the shutdown schedule was announced, teams and federations warned that the measure could remove a significant source of recurring revenue almost overnight.

Complete iGaming later reported that Brazilian football teams protested the online sports betting ban, with federations in São Paulo and Rio de Janeiro among those warning of a “fatal blow” to the sport’s finances. Clubs in Brazil’s top league generated 1 billion reais in direct advertising revenue from betting companies in 2025, up 67% from the prior year, according to figures cited from Convocados and Outfield.

Economist Cesar Grafietti said that amount represented nearly 10% of clubs’ total recurring revenue. The exposure was broader than shirt sponsorships because betting money also supported stadium advertising and broadcast-related rights. If that revenue disappears quickly, clubs could be forced to sell players, renegotiate contracts at lower levels and reduce transfer spending.

Lula’s response underscored the government’s political calculation. He said clubs would have to “figure out” the ban and suggested Brazilian soccer’s best years did not depend on betting sites. Officials also discussed possible support measures, including a subsidized credit line, though a planned meeting with clubs was postponed. That left sports organizations in the same uncertainty as operators: a large market had been legal, commercial relationships had formed around it and the state was now attempting to unwind them on a compressed schedule.

Suppliers had bet on localization

The ban also cuts against recent investment by suppliers that viewed Brazil as a long-term regulated market. In June, Complete iGaming reported that Games Global planned to launch a live casino studio in Brazil with Spin Gaming. The São Paulo-based facility was designed to develop and operate live dealer games in the country, with localized customer service and compliance with Brazilian rules.

The project included Brazil’s first academy for training live casino dealers and game presenters, a sign that companies expected regulation to drive domestic production rather than imported content. The partners said the venture could create hundreds of jobs and support a local live casino supply chain. Evolution had also launched a dedicated São Paulo studio in July, showing that global suppliers were building infrastructure around Portuguese-language products and Brazilian customer preferences.

Marketing and community initiatives reflected the same assumption. BGaming, for example, partnered with São Paulo’s A7MA Art Institute through its “When Art Meets Gaming” project with a Brazil art studio, tying its industry presence to local artists and events. Such projects were not central to the legal structure of betting, but they illustrate how operators and suppliers were trying to embed themselves in the Brazilian market under the regulated model.

Those investments now factor into the broader damages and reliance arguments likely to follow. Companies that spent on licenses, studios, staff, sponsorships and local partnerships can argue that they acted under a government-authorized framework. The government can counter that gambling authorization is inherently subject to policy change, especially when public health and consumer harm are invoked.

Congress, courts and enforcement now collide

Stake’s injunction is temporary and the Attorney General’s Office has said it will appeal. The government still must secure congressional approval for the provisional measure if it is to remain in force beyond its initial 60-day period, extendable for another 60 days. That creates parallel tracks: litigation over the legality and implementation of the shutdown, political negotiations over the final text and enforcement against operators that continue to serve Brazilian users.

The measure also created an interinstitutional committee to coordinate action against illegal fixed-odds betting operations and advertising after the authorized market closes. That provision reflects a central challenge in prohibition: the government must suppress licensed operators while preventing unauthorized sites from filling the gap. Brazil was already blocking thousands of illegal domains before the ban, and industry groups say that task will become harder if regulated options disappear.

The immediate question is whether other operators seek relief similar to Stake’s and whether courts impose a broader transition standard. A series of injunctions could slow the government’s timetable and pressure Congress to revise the measure. A successful government appeal, by contrast, would reinforce Lula’s authority to shut down the sector quickly while the political process continues.

For now, the case has turned Brazil’s betting ban from a policy announcement into a test of administrative law, electoral politics and economic reliance. The outcome will help determine whether the country’s experiment with federal online betting regulation ends through an orderly wind-down, a court-supervised transition or a rapid prohibition that leaves operators, clubs and consumers adjusting after the fact.