Lula Wins Brazil Election, Leaving Gambling Operators Facing Four More Years Of Uncertainty

Lula’s reelection has left Brazil’s gambling operators wondering whether they will be allowed back into a market they spent millions entering.

Brazilian President Luiz Inácio Lula da Silva has won a fourth term with 51.79% of the vote, defeating Flávio Bolsonaro, who received 48.21%, according to Brazil’s Superior Electoral Court (TSE). But the result offers little reassurance to gambling companies shut out of the country since September.

Lula’s victory on Oct. 25 follows his government’s Sept. 25 decision to ban online sports betting and casino gaming, effectively shutting down a regulated market that his own administration helped establish. Operators are now waiting to find out whether they can resume business under a president who has just won another four years in office.

For Sérgio Paulino, founder of All Bettors, the outlook seems bleak. “Gambling in Brazil will suffer immensely,” he told Gambling Insider, warning that operators could face higher taxes, tougher advertising restrictions and a prolonged period of uncertainty.

The government spent years establishing the rules for legal gambling, only to shut down the market less than two years after it opened. Lula’s re-election leaves operators facing the possibility that the ban could outlast the current legal challenges.

Flutter Faces Mounting Losses as Lula Secures Fourth Term 

Flutter Entertainment, which suspended its Brazilian sports betting and iGaming operations following the September measure, told Gambling Insider that it had no immediate additional comment on the election result. The company said it was reviewing whether it had anything further to add to its earlier statement opposing the prohibition.

“We’ve seen the result overnight but have no fresh comment for now, having published a lengthy update and statement on the initial news of the provisional measure,” a Flutter spokesperson told Gambling Insider.

Flutter’s original Sept. 28 statement said the company was reviewing its options, including a potential appeal, while continuing to engage with Brazilian authorities.

Flutter has put a figure on what the shutdown could cost. If it remains unable to operate in Brazil for the rest of 2026, the company expects to lose approximately $70 million in revenue and $20 million in adjusted EBITDA.

The ban comes barely a year after Flutter committed heavily to Brazil. In 2025, it acquired a 56% stake in NSX, bringing Betnacional together with its existing Betfair Brazil business in a deal involving $674 million in total consideration.

The investment was made on the assumption that Brazil would remain a regulated gambling market. Flutter is now waiting for Congress and the courts to determine whether it can operate there again.

Brazilian Gambling Associations Warn Ban Will Fuel Illegal Betting

Brazil’s gambling associations have taken a more public approach to opposing the ban, turning the country’s soccer stadiums into an unlikely battleground over gambling regulation. The Brazilian Institute of Responsible Gaming (IBJR) and the National Association of Games and Lotteries (ANJL) launched a campaign under the slogan “Proibir não é proteger,” or “Banning is not protecting.”

The campaign appeared during October’s Brasileirão matches, with messages displayed on advertising boards and on shirts worn by São Paulo FC and Flamengo players. The associations warned that banning licensed operators would leave more room for illegal betting sites.

What puts me down the most is that Lula’s actions weren’t intended to truly protect the Brazilian people, but rather to make a political stunt.” – Sergio Paulino, All Bettors founder

IBJR Executive President Carlos Lima argued that the ban had not eliminated demand but had weakened consumer safeguards and mechanisms for monitoring potential match-fixing. ANJL President Plínio Lemos Jorge similarly warned about the risks posed by illegal betting websites, citing more than 30,000 active unauthorized sites in Brazil.

The IBJR and ANJL have also taken their objections to Brazil’s Supreme Federal Court. They want the ban suspended, or licensed operators permitted to resume business, while Congress decides whether the provisional measure should become law.

Gambling Operators Face Higher Taxes and Tougher Restrictions Under Lula

Paulino does not believe a permanent ban is the only possible outcome. He suggested Congress could allow licensed gambling to continue, but with higher taxes, tighter advertising rules, additional KYC requirements and restrictions on soccer sponsorships.

He suggested taxes could rise as high as 40%, citing the UK as a comparison. No such rate has been announced by the Brazilian government, and Paulino’s estimate remains speculative.

Paulino expects some smaller operators to leave if the cost of doing business increases. Larger groups, he suggested, could keep their licenses but scale back investment and concentrate on other Latin American markets.

“Brazil just became an unsafe and untrustworthy market for future operators to invest in,” Paulino said. He identified Mexico, Argentina, Colombia and Peru as potential alternatives for companies seeking more predictable regulatory environments.

Staff could also pay the price. Paulino warned that operators may cut jobs or relocate teams established specifically for Brazil, while companies that paid licensing fees could consider legal action to recover their money.

He believes the wider dispute over gambling regulation could continue into 2027 or 2028. For now, operators are waiting to see what Congress does with the provisional measure and whether the courts intervene.

Offshore Betting Demand Surges Following Brazil‘s Ban

Early data suggests unauthorized gambling activity has become more visible since the shutdown. Gambling Insider previously reported that Bet Legal detected an increase in unauthorized betting domains from 381 on Sept. 25 to a peak of 1,071 on Sept. 29, an increase of approximately 181%.

Blask’s figures tell a similar story about consumer interest. Offshore operators accounted for 11.3% of Brazilian gambling-related search demand on Sept. 30, up from 3.4% on Sept. 24, although search activity does not establish how much money bettors have moved to illegal sites.

Brazilian authorities have continued blocking unauthorized websites. By Sept. 29, they had requested the removal of 5,209 gambling-related domains, with telecommunications regulator Anatel ordering 2,387 blocked.

H2 Gambling Capital estimates that R$25 billion ($4.8 billion) in annualized spending could move offshore if the ban remains in place. That is a projection rather than money already lost to the regulated market.

For Paulino, these developments reinforce his argument that prohibition could redirect demand rather than eliminate it. “A ban will not make Brazilian players stop gambling. Properly designed regulations would provide them with a safe framework in which to gamble,” he said.

Regulatory Reversal Threatens Brazil’s Appeal to International Investors

The uncertainty surrounding Brazil’s gambling industry has also raised questions about regulatory predictability for international operators and suppliers. At SOFTSWISS’ 2027 iGaming Trends Report launch in September, Brazil emerged as an example of how quickly the commercial outlook for a newly regulated market can change.

Robin Harrison of WorldGaming noted that Brazil had effectively ceased to be an operating market for licensed companies by early October. For businesses considering expansion, the shutdown raises an obvious concern: what protection does a license offer if the government subsequently prohibits the activity it authorized?

This means that some regulated operators may decide to leave Brazil completely, as it will no longer be an attractive investment destination.” – Sergio Paulino, All Bettors founder

Paulino believes the government has damaged its credibility with investors who spent money on licenses, compliance systems and local employees. He also accused Lula of using the ban for political purposes, although that is purely Paulino’s interpretation of the president’s motives.

Rather than banning gambling, Paulino wants more audits, tougher KYC checks and measures requiring operators to intervene when customers show signs of harmful gambling. He also called for greater support for people experiencing gambling addiction.

Paulino’s own business offers a different model. All Bettors operates free-to-play social prediction markets and casino-style games, giving him a commercial interest in alternatives to real-money gambling as licensed operators remain shut out.

Prolonged Uncertainty Could Drive Operators Out of Brazil

Paulino warned that the longer the ban continues, the more difficult it could become to persuade operators to invest in Brazil again. Some may look elsewhere in Latin America, taking jobs and planned investment with them, while Brazilian bettors could turn increasingly to offshore websites.

He argued that stricter player protection rules would be more effective than prohibition. In particular, he wants operators required to identify risky gambling behavior, check whether customers can afford their spending and provide more support for those experiencing gambling-related harm.

“A ban will not make Brazilian players stop gambling. Properly designed regulations would provide them with a safe framework in which to gamble,” he said.

Image credit: Ricardo Stuckert/PR/Palácio do Planalto/CC BY 2.0

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