Election-season bets in Brazil: the easy anti-gambling pitch, and the risk of throwing out regulation with the gray market

Brazil’s betting industry has become a campaign target in the São Paulo governor race and the presidential contest, with candidates competing to sound toughest on “bets.” That matters for high-risk payment providers because the political debate is increasingly framing the issue as prohibition versus abuse, while the regulated market is still only 18 months old and the old unregulated demand has not disappeared.

1. Polling has made the sector an easy target. AtlasIntel’s Latam Pulse Brasil says a large majority of Brazilians see online betting as harmful to society, and more than half describe it as bringing “only losses.” A More in Common and Ipsos-Ipec survey says about one quarter of respondents would be more inclined to vote for candidates who defend tighter restrictions on bets. According to Estadão, 86.7% of Brazilians view bets as harmful.
2. That sentiment is pushing nearly every major candidate toward restriction or outright prohibition. Lula has increased his criticism of betting companies. Tarcísio de Freitas blames the expansion of bets on the regulation approved under Lula’s government, through Fernando Haddad, then Minister of Finance. Haddad pushes responsibility back to Bolsonaro’s government, which he says stood by while the problem grew. Romeu Zema says he would end bets as his first act in office. Renan Santos has taken the same line, publicly linking companies in the sector to money laundering. Ronaldo Caiado talks about a “heavy hand” without explicitly calling for a total ban. Flávio Bolsonaro is avoiding the topic directly, but his campaign is signaling a review of the regulation.
3. The thing is, prohibition does not eliminate demand. It pushes it into the illegal market, which operates with no control, no tax collection, and none of the safeguards the regulation was meant to put in place. In 2025, the first year of the regulated market, government revenue from the sector was around R$ 9 billion. If the model is simply wiped out for political optics, that money disappears too.
4. The article also notes the core weakness in the campaign rhetoric: the most aggressive proposals for a total ban usually come without any serious explanation of how they would work in practice or what side effects they would create. That is why the betting industry dismisses them as populist. For PSPs and acquirers, the useful distinction is not “betting or no betting,” but whether activity is pushed into a regulated channel with tax, controls, and player safeguards, or into the gray market with none of the above.
5. Economist Lauro Gonzalez of FGV is cited as saying bets have stuck to the electoral agenda because they have become a symbolic explanation for the mismatch between income and spending. In practice, that means the sector is being used as a political shorthand for a broader economic frustration, which is why the debate keeps drifting toward punishment rather than policy design.

For high-risk payment teams, the practical takeaway is simple: in Brazil, the political risk is no longer just about licensing mechanics. It is about whether regulated payments can survive a campaign cycle in which the easy slogan is to shut the market down and let the gray market do the rest.