Brazil’s MP 1.394/2026 would end regulated betting — and 25 million identified bettors would not disappear

Brazil’s MP 1.394/2026, issued on September 25, comes just nine days before the first round of the presidential election and would shut down a sector that collected approximately R$ 9,95 billion in taxes in 2025. For high-risk PSPs, the practical issue is not whether demand vanishes; it is what happens when a regulated market with licensing, capital, compliance, and player controls is replaced by something else.

1. The MP would revoke authorizations in 30 days, with no public debate and no transition period, while keeping the fees the State already collected for those authorizations. The text frames that as the end of the market; in operational terms, it is a forced exit without an orderly wind-down.
2. Brazil already built a regulated betting framework that charged R$ 30 million per authorization and required capital, a local office, good standing, and internal controls under Portaria SPA/MF nº 827/2024, arts. 5º and 11. The point is straightforward: the market was not improvised, and the compliance layer was not decorative.
3. The article’s core warning is the “cobra effect”: if the State creates a market and then removes it abruptly, it can push the underlying activity back outside the regulated perimeter, often with more opacity than before. The author argues that the MP does not end betting; it ends the operators that control it.
4. Under Portaria SPA/MF nº 1.231/2024, the authorized operator is the only one legally required to monitor each bettor for addiction risk, suggest limits, self-test and self-exclusion tools, suspend access for high-risk users, and provide channels for help and treatment for bettors and their families. It is also prohibited to facilitate credit, tie bonuses to deposits, or advertise easy winnings or target minors.
5. The article says the MP would leave 25 million identified bettors in “the only place where nobody knows them,” which is the real operational problem for PSPs and acquirers: regulated monitoring disappears, but demand does not. That is the kind of setup that pushes volume into less visible channels, with fewer controls and more headaches for payment providers.

For high-risk payment companies, the important detail is not just the political timing. Brazil is moving from a regulated model with licensing, player monitoring, and formal controls toward a hard shutdown that removes the compliant layer first. That is usually where the payment risk gets more interesting, not less.