Brazil sees a spike in illegal betting sites after announcing the end of regulated betting

Brazil recorded a sharp rise in illegal betting domains in the first days after Provisional Measure No. 1.394/2026 was published. For PSPs, acquirers, and banks, the important part is not the politics; it is the speed at which unlicensed traffic can reappear when a regulated market is put into reverse.

1. According to Bet Legal data cited by BNLData, 428 new clandestine domains were identified between 25 and 27 September. That compares with 246 new sites between 21 and 24 September, or about 62 a day, versus roughly 143 a day in the three days after the measure was published.
2. Brazil’s fixed-odds betting was legalized in 2018 under Michel Temer. Jair Bolsonaro’s government let the deadline for regulation expire, and Luiz Inácio Lula da Silva signed the 2023 law that set new rules and brought online games into Brazil. For at least five years, platforms operated with almost no rules.
3. The 2023 law required licensing, a headquarters in Brazil, advertising rules, and taxation. It also promised to move the sector out of the shadow economy. Since January 2025, only companies authorized by the Secretariat of Prizes and Bets have been allowed to operate nationwide.
4. In August 2024, about 5 million Bolsa Familia beneficiaries transferred funds via Pix to betting platforms. In November 2024, the Supreme Court backed measures by Justice Luiz Fux to protect children and adolescents and to prevent the use of social programs in betting. The AGU said there were “practical barriers difficult to overcome” to enforce that restriction.
5. Brazil’s Ministry of Health says SUS treatment for pathological gambling rose by about 140% between 2018 and 2025. The press also noted that the Central Bank and the banking federation had warned about the link between Pix and betting before the ban.

MP No. 1.394/2026 was signed on 25 September and also applies to platforms based outside Brazil. Lula told ministers on 23 September that the government needed to “cut the evil at the root,” and in Maceió he said he would end bets before they ended Brazil. The AGU is also preparing lawsuits to make companies reimburse health and social security costs linked to gambling addiction.