Brazil government prepares provisional measure to ban online gambling and restrict sports betting

Brazil’s federal government is drafting a provisional measure to prohibit online games and restrict sports betting in the country, a move that would hit high-risk payment flows, advertising-linked revenue, and tax collection at the same time. For PSPs and acquirers serving the sector, the immediate issue is not just licensing risk: it is whether the legal market itself is about to be narrowed by decree.

1. By Wednesday night, 16/9, the government’s internal position was to ban everything, even though the final shape of the provisional measure was still being defined. According to UOL Notícias, the administration is treating the MP as an effective extinction of online gambling in Brazil, with a possible last-minute adjustment only to the sports betting restrictions.
2. The political backdrop is explicit: President Luiz Inácio Lula da Silva has publicly linked betting to addiction and household debt. In his words, “We are taking decisions and soon we will announce the decision we are going to make about this, because it is a disease, not a game. It is the induction of innocents to an addiction.”
3. Brazilian football clubs are already mobilizing against the plan. Flamengo, Corinthians, Palmeiras and São Paulo each have sponsorship deals worth more than R$ 100 million per year with betting operators, and the sector as a whole expects around R$ 1 billion in lost sponsorship if the MP is approved as written.
4. Operators are preparing their own response. The industry is considering legal action and has tried, unsuccessfully, to make direct contact with the government. Their core argument is straightforward: a ban would push activity into the illegal market of unregistered operators that do not pay taxes.
5. The measure would also affect public revenue. By July this year, the federal government had collected around R$ 10 billion in taxes on online games. Clubs and betting companies had been expecting narrower restrictions, such as limits on advertising at certain hours or in certain places, rather than the broader prohibition now signaled.

There is also resistance from broadcasters that carry football, since those groups also earn from betting advertising. Globo, for example, controls a betting company. For payment providers, that is the usual reminder that a policy shift in betting does not stay inside one vertical: it moves sponsor budgets, media spend, and payment volume at the same time.