Lula's re-election leaves Brazil's regulated betting sector reliant on Congress and the Supreme Court

Lula da Silva has been re-elected President of Brazil for a fourth term, taking 51.79% of the vote against 48.21% for Flavio Bolsonaro, the Liberal Party leader. According to SBC News, he is the first candidate to win the second round after losing the first since democracy returned in 1985. Bolsonaro has called for the result to be annulled over a Supreme Court decision to extend polling by two hours, though this is considered unlikely to succeed.

The outcome is unwelcome for the gambling industry. Nine days before the first round on 4 October, Lula said he intended to reverse the 2024 Bets Law, which he had approved himself and which opened Brazil's regulated online betting market on 1 January 2025. The ban was issued as a Provisional Measure, an emergency decree. Bookmakers were told to close completely by 25 October, and player withdrawals had to be completed by 5 October.

A Provisional Measure can be rejected or amended by Congress, and that is where the sector's main hope lies. The Liberal Party increased its presence in the Chamber of Deputies to 121 deputies and in the Senate to 29. Congress is seen as more sympathetic to regulation over prohibition than the federal government is. The Supreme Court is the other avenue, since Justice Luiz Fux could strike the measure down. That would not restore the five licences already revoked, but it could halt the ban and allow a new licensing framework to be drafted.

Regulus Partners does not expect Fux to revoke the ban. It also does not expect the measure to last or the 2025-2026 licences to return, which would leave the sector in limbo. The firm said the situation is likely to be settled through protracted legal disputes, and that progress by Lula's allies in suing post-licence operators for player losses could bury the industry.

Many stakeholders expect legal sports betting to return eventually while online casinos are removed permanently over concerns about addiction and harm. Flutter Entertainment, Kaizen Gaming, Super Technologies, Entain and bet365 have invested and hired locally in recent years, and the risk attached to that investment has grown. The ruling Workers' Party is also aware of potential compensation claims from the football, media and IT sectors if the measure becomes law. Lula's attempt to double gambling taxes in 2025 failed to win enough support in Congress.