Brazil’s sports betting market awaits Supreme Court ruling as license cancellations loom, says industry group

Brazil’s sports betting sector is waiting for a decision from Supreme Federal Court justice Luiz Fux on challenges to the provisional measure that would ban betting activity in the country. For PSPs and operators, the practical issue is not just the legal fight: licenses may be formally revoked this week, and the market is already dealing with layoffs, investor pullback, and a possible reset that may not unwind.

1. The dispute centers on a medida provisória (provisional measure) signed by President Luiz Inácio Lula da Silva’s government on 25 September to prohibit sports betting activity in Brazil. According to Folha de S.Paulo, the sector may have its licenses officially cancelled by the Ministry of Finance this week, while Fux is the rapporteur at the STF (Supremo Tribunal Federal) for the cases challenging the measure.
2. The industry’s immediate damage is already visible. The sector is facing mass layoffs, investor retreat, and legal uncertainty since the measure was signed, and more than 3,500 people are estimated to have lost their jobs. Carlos Lima, president of IBJR (Instituto Brasileiro de Jogo Responsável), said the longer the suspension lasts, the worse the effects become, especially layoffs.
3. Speaking to Folha de S.Paulo, Lima said some companies have drastically reduced their Brazilian operations, keeping only the minimum structure needed to remain legally present in the country: legal and compliance teams. He said areas such as customer service have been eliminated, and added that smaller companies without support from larger groups may not have the capacity to continue in Brazil if the ban is lifted later.
4. The IBJR chief also said the market may not return to its previous shape even if the measure is reversed. “I think the sector won’t go back to how it was before,” he said, adding that it is difficult to know how many and which companies will be able to resume operations.
5. The financial stakes are straightforward. Regulated-sector companies paid R$ 30 million each as the mandatory license fee, plus R$ 5 million as a financial reserve. The federal government collected about R$ 2.55 billion from 85 licenses, and the official position is that these amounts will not be returned. If the cancellations go through, companies may accelerate layoffs further, since retaining staff would be limited to statutory directors.

The Ministry of Finance had not yet issued a formal ordinance announcing the cancellations, which were expected on 25 October. Legal experts quoted in the report said the measure could happen automatically, without a direct notice to each company. For operators and payment providers, that means the question is no longer just whether Brazil reopens the market, but which players still have the balance sheet and compliance setup to re-enter if it does.