Brazil MP banning sports betting raises legal certainty concerns for long-term investments

A provisional measure that shut down regulated sports betting in Brazil has become more than a betting-sector story. By canceling state-issued authorizations without refunding fees or providing compensation, the Lula government has triggered a broader debate about the security of long-term investments in Brazil.

1. The regulated betting market began operating in January 2025. Each operator paid R$ 30 million for a five-year authorization and also had to meet technical requirements and make investments to launch operations. In total, 85 authorizations were granted, bringing R$ 2.55 billion into public coffers.
2. Less than two years later, MP 1.394/26 extinguished those licenses, suspended operations in October, and did not establish any compensation mechanism. The measure is the core of the legal certainty dispute: the state reversed its own commitments without offering a transition framework.
3. According to Luan Sperandio, in an analysis published by Gazeta do Povo, the government does have the authority to revisit policies when public evidence points to social costs such as problem gambling, debt, and betting advertising. The issue, he argues, is the wording of the measure, which did not account for transition rules or for the rights and expectations created by earlier state decisions.
4. The analysis draws parallels with other Brazilian infrastructure sectors. In public-service concession renewals, the law requires prior compensation. For authorized rail projects, there is protection for investment amortization. In telecommunications, the law provides specific guarantees when an activity is prohibited in the public interest. Those mechanisms exist to preserve predictability for long-term capital.
5. The wider signal, according to the text, is that public commitments can be undone unilaterally. That perception can feed into risk assessments well beyond betting, including sectors that depend on long-term government commitments and foreign capital: highways, railways, ports, airports, sanitation, and energy. When jurisdiction risk rises, lenders tend to demand higher returns, and small changes in the cost of capital can add up to billions of reais across large infrastructure portfolios.