Brazil’s betting operators plan legal and political pushback after Lula’s ban order reaches the STF and Congress

Brazil’s betting companies are responding to the federal government’s move with a two-track strategy: a constitutional challenge at the Supreme Federal Court (STF) and lobbying in Congress to overturn or amend the measure. For high-risk PSPs, the immediate issue is operational continuity — and the risk that a regulatory fight will push traffic toward unlicensed platforms.

1. President Luiz Inácio Lula da Silva (PT) signed a Provisional Measure (MP) that imposed an integral veto on the bets sector just nine days before the election. The MP takes effect immediately, but it still needs approval from the Chamber of Deputies and the Senate to become permanent; otherwise, it loses validity.
2. In Congress, the timing is the problem. According to Senator Angelo Coronel (Republicanos-BA), rapporteur for a bill that had been regulating bets in the Senate, the topic “should only enter discussion after the elections.” Behind the scenes, lawmakers with ties to the sector expect changes to the text, but not a fast-track debate.
3. For now, the sector’s first move is legal, not political. In a virtual meeting on Friday night with around 180 representatives from licensed companies and associations, participants agreed to act jointly before the STF rather than file a wave of individual lawsuits.
4. Plínio Lemos Jorge, president of the Associação Nacional de Jogos e Loterias (ANJL), said he sees a “98%” chance of a collective action at the STF seeking to suspend the MP and restore operations immediately. He argued that every day of downtime is pushing bettors toward clandestine platforms, which are already launching new sites.
5. The companies plan to challenge the government’s justification on constitutional grounds, arguing that the data cited by the administration lacks support and that the MP creates legal uncertainty for businesses that were regulated by the legislature. They also want to rely on an earlier STF ruling that, in their reading, says a federal MP cannot cancel state licensing for bets.

The precedent matters because, six years ago, the Supreme Court ruled on three actions challenging the Union’s monopoly over lotteries. The Court said the federal government can regulate the service, but does not have exclusive rights to operate it. Under that reasoning, states that want to allow the activity can do so, as long as they follow the applicable rules.