Brazil’s betting ban could send players to the black market, industry leaders warn

Brazil’s federal government has ordered an immediate ban on fixed-odds online betting and digital casinos through Provisional Measure 1,394/2026, less than two years after regulating the sector. For PSPs, the key issue is not just the ban itself, but the legal uncertainty it creates and the likely migration of players from licensed operators to the illegal market.

1. The measure covers the operation, offering, intermediation and advertising of fixed-odds online betting and digital casinos. Industry experts told Focus Gaming News that the abrupt shift undermines legal certainty, weakens investor confidence and may be challenged in court.
2. Letícia Ferraz, executive director of the Laboratory for Human Rights and New Technologies in the Global South (LabSul), said the total ban on the regulated betting market was “highly misguided” and would bring “serious and unintended consequences”. She argued that the studies her team has carried out over almost two years point to debt, gambling addiction and other negative externalities coming “for the most part” from the illegal market.
3. Ferraz said the previous regulatory framework was “very robust” in giving tools to protect punters and promote responsible gambling. In her view, the government should have focused on monitoring and combating the black market rather than shutting down authorised operators. She also said the abrupt move, without awareness-raising or education policy, would not stop gambling, but would push many players to illegal sites.
4. She warned that the black market is known for fraud, a total lack of player protection tools and no responsible gambling measures, and said illegal operators often have links to organised crime. Ferraz also said the judiciary could overturn the provisional measure as unconstitutional.
5. Amilton Noble described the measure as “disastrous”, arguing that it will strengthen the black market and damage Brazil’s credibility with investors. Ricardo Costa of Febralot said excluding the lottery network was a mistake and called for stricter, enforced rules instead of an abrupt prohibition.

For high-risk payment providers, the practical takeaway is straightforward: when a regulated channel is shut down overnight, demand does not disappear, it moves. In Brazil’s case, the immediate risk is that volume shifts from licensed betting and casino operators to unlicensed merchants, with all the usual payment headaches that follow.