President Luiz Inácio Lula da Silva has secured an unprecedented fourth term, winning the run-off with 51.8% of the vote – a result that prolongs the uncertainty hanging over Brazil’s licensed betting sector following his September ban on online wagering.
Lula’s victory means the government that introduced the ban remains in power for another four years, dashing hopes among licensed operators for a swift policy reversal. For international groups such as Flutter Entertainment and Entain, both of which invested significantly in the newly regulated Brazilian market, the re-election raises pressing questions about the future of their operations in one of the world’s most promising gambling jurisdictions.
From Regulation to Prohibition
Brazil appeared to be charting a path toward a mature, regulated gambling market. Law No. 14,790/2023, signed in December 2023, established licensing requirements under the Ministry of Finance and authorized both fixed-odds sports betting and online casino games. Mandatory licensing, tax collection, and advertising limits took effect from January 2025.
The results were substantial. The licensed sector generated approximately BRL 37 billion (around $7 billion) in gross gaming revenue in its first year, according to regulator data. By the first four months of 2026, industry revenue had doubled year-on-year, with betting companies contributing tax revenues comparable to those of the tobacco and agriculture sectors.
That trajectory changed abruptly in September 2026. Days before the first round of the presidential election, Lula signed a provisional measure banning online sports betting and gaming with immediate effect, requiring licensed operators to cease operations by October 6. The decision came amid growing public concern over problem gambling and the sector’s prominence as a sponsor of Brazilian football clubs.
Operators Respond
The ban’s immediate consequences have been closely monitored by investors. Entain has maintained its earnings guidance despite the shutdown of its Brazilian operations, signaling that the company’s diversified footprint has cushioned the impact for now.
Flutter, meanwhile, has continued to advocate for regulation over prohibition. The company has stated that Flutter Brazil strongly believes regulation delivers the best results against the black market – a position echoed widely across the licensed industry.
Industry analysts have sought to quantify the risk. In a note published following the election result, Regulus assigned an 80% probability to the ban remaining in place long term, describing the outcome as unfavorable for operators with Brazilian exposure.
The Black Market Question
The central concern for industry professionals is the fate of an estimated $25 billion black market. Critics of the ban argue that prohibition does not eliminate demand but simply displaces it to unlicensed, offshore operators that pay no Brazilian taxes and offer no consumer protections.
Industry bodies have emphasized the economic stakes. The Brazilian Institute of Responsible Gaming has previously estimated that a regulated betting market could inject R$ 28 billion into the economy and support some 15,000 direct and indirect jobs – figures now called into question by the current policy direction.
There is also skepticism about the durability of the ban itself. Commentators in the Brazilian press have noted that suppressing betting by decree does not extinguish bettor behavior, and that the policy’s long-term viability may depend on legislative rather than executive action.
A Lengthy Road Ahead
Lula’s re-election removes the most plausible near-term catalyst for a policy reversal: a change of administration. The president has signaled no intention of restoring licensed betting, and analysts see limited legislative appetite for countermanding an executive measure adopted ahead of an electoral mandate.
For Flutter, Entain, and other international operators, the realistic scenarios now involve either a prolonged absence from the Brazilian market or a wait for a future political shift to re-establish a licensing framework. In the interim, the regulated sector’s tax contributions, consumer protections, and sponsorship relationships with Brazilian sport – the original rationale for regulation – risk being ceded to the very black market the 2023 law was designed to displace.
Brazil’s experiment marks one of the most significant regulatory reversals in the global gambling industry in recent years. How the market evolves under prohibition – whether demand migrates offshore, whether the ban softens through Congress, and whether economic pressure forces reconsideration – will be closely watched by operators and regulators worldwide.
