Brazil bans fixed-odds betting after 22 months of regulation, repeating the 1941 playbook on gambling

Brazil has issued Provisional Measure No. 1,394, banning the operation, offering, brokerage, and advertising of fixed-odds betting across the country. For PSPs and operators, the immediate issue is not the politics: it is what happens when a regulated market is shut down fast enough to push demand back into unlicensed channels.

1. Decree-Law No. 3,688, Brazil’s Penal Contravention Law, turned 85 this Saturday (3). Signed by Getúlio Vargas in 1941, it banned jogo do bicho and other forms of gambling, classifying them as a criminal contravention. The law did not end gambling; it pushed it underground.
2. The pattern repeated in 1946, when Eurico Gaspar Dutra used Decree-Law No. 9,215 to shut down casinos. The move ended, overnight, an activity the state itself had legalized and regulated during the so-called “Golden Age” of casinos. In 2026, the tool is again a top-down ban: a provisional measure that takes effect before the National Congress has its say.
3. Fixed-odds betting had been created by Law No. 13,756/2018 and regulated by Law No. 14,790/2023. The ban came less than three years later. Operators paid a R$ 30 million license fee each, and 85 were authorized in August, according to the Ministry of Finance.
4. Under the MP, operators must take websites and apps offline ten days after publication. Federal, state, and district authorizations will be extinguished on 25 October. In other words, the licensed side of the market is being turned off on a schedule; the unlicensed side does not need a deadline.
5. The article notes that after 22 months of a regulated market, illegal supply still accounts for more than 40% of bets. The regulated market generated R$ 36.9 billion in gross gaming revenue (GGR) in 2025 and R$ 20.07 billion in the first half of 2026, according to official Finance Ministry data. Once licensed operators are removed, those illegal sites become the only option for anyone who keeps betting.

The government is pairing the ban with tougher criminal enforcement: alongside the MP, it sent Congress a bill that would raise the penalty for illegal betting from four to six years. The practical question for payment providers is simple enough: when a country preserves demand but strips out the licensed rails, traffic does not disappear — it migrates.