RIO DE JANEIRO — Two years after Brazil legalized sports betting and casino-style games in a sweeping statute, the Workers’ Party has introduced legislation that would either gut the law or abolish it outright. The bills have the backing of President Luiz Inácio Lula da Silva and carry enough electoral momentum to reshape one of the fastest-growing regulated gambling markets in the world.
Brazil’s regulated betting market generated R$20.07 billion in gross gaming revenue in the first half of 2026, a 15.3 percent increase over the same period last year, according to figures published by the Secretaria de Prêmios e Apostas, the federal gambling regulator known as the SPA. Seventy-eight operators hold current licenses, operating 138 distinct betting brands across the country.
That expansion is precisely what has alarmed the coalition pushing back. Workers’ Party legislators, backed by church-affiliated groups and public health advocates, argue the Bets Law opened a legal pathway for a category of product, including algorithm-driven casino games like online slots and virtual roulette, that generates compulsive behavior at a rate the country was unprepared to manage. Gambling-related debt complaints multiplied through 2025 and into this year, becoming visible enough to enter electoral conversation ahead of Brazil’s October 2026 elections.
PL 2258/2026, the narrower of the two bills, would ban algorithm-based casino games from licensed platforms while leaving sports betting intact. PL 1808/2026 goes further: a full repeal of the Bets Law, returning Brazil to the legal status quo that predated January 2025. Lula publicly endorsed both measures after Congress reconvened on August 3. The president has described online casino games as a social harm comparable to predatory lending.
The political calculus is transparent. October’s election creates a direct incentive for incumbents to be seen acting against an industry whose public image has deteriorated sharply. Church-affiliated voting blocs, which backed Lula’s 2022 return to office and remain important to his coalition, have pressed for full repeal. Backing both bills allows Lula to signal responsiveness to that constituency while leaving the legislative outcome to Congress.
For international operators who built Brazilian market entry strategies around the January 2025 licensing framework, the uncertainty is now structural. Companies including Bet365, Betway, and Betsson spent the regulated market’s first two years acquiring local licenses, localizing products, and building customer bases. The SPA’s licensing process required technical compliance demonstrations and financial reserves, conditions that made entry expensive enough to deter purely speculative players. What it could not protect against was the political durability of the statute itself.
The wider environment surrounding Brazil’s market has grown more complex. The Trump administration’s decision to revoke the visa of Brazil’s ambassador to Washington in early August has added to the political risk foreign companies operating in Brazil must weigh, a signal that U.S.-Brazil diplomatic tensions under Lula and Trump remain an unpredictable variable for multinationals with exposure to the Brazilian market.
The pattern Brazil is following has precedents that do not favor the industry’s argument that early regulatory stability translates into long-term certainty. Ohio’s experience restricting online sports betting after consumer harm data emerged from its first regulated year demonstrated that licensing frameworks offer no guarantee of market durability. Australia’s media regulator moved in 2026 to block illegal gambling platforms after a grey-market expansion followed tightened domestic rules, a cycle the SPA’s own enforcement team has described in internal briefings as a cautionary example.
The legislative arithmetic favors the partial ban. PL 2258/2026 preserves the sports betting revenue stream that state governments depend on for social program transfers mandated under the Bets Law. Full repeal would eliminate those transfers, creating fiscal headaches for state executives facing the same October election. That calculus gives the casino-game ban a clearer path through committee than full repeal, even with Lula’s endorsement of both.
What neither bill addresses is what happens to operators who invested in casino-game infrastructure under a license the government issued. The SPA’s licensing terms include provisions for regulatory change but specify no compensation or transition periods for product lines that become retroactively prohibited. Industry attorneys have flagged that gap as the most likely source of litigation if either bill becomes law.
Brazil’s regulated market was forecast to reach R$28.8 billion in gross gaming revenue by 2030, a projection that underpinned deal activity and investment decisions across the global gaming industry. Those models were built on the assumption that a statute-based licensing regime would remain in place long enough to generate a return. That assumption is no longer secure.
The bills are in committee. A vote could come before the end of the congressional year in December 2026 or slip into 2027 after elections have reshuffled the political calculus. What is not in question is that the market Brazil built, regulated, growing, and briefly counted among the world’s most significant new gaming territories, has become a referendum on whether governments can design gambling policy and live with the results.
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