The Brazilian Institute of Responsible Gaming (IBJR) has issued an official statement countering recent remarks by President Luiz Inácio Lula da Silva, who suggested a total ban on online betting in Brazil. In an interview with ICL Notícias, the President expressed deep concern over rising household debt and the social impact of gambling, stating he would “shut down” operations if given the chance.
The IBJR’s response serves as a critical defence of the newly established legal framework, arguing that a pivot toward prohibition would be counterproductive. The Institute emphasises that the formal market is the only viable mechanism for protecting society, maintaining integrity, and ensuring that the industry contributes to Brazil’s economic development.
The Case Against Prohibition: Protection vs. Proliferation
The IBJR maintains that a total ban would not eliminate consumer demand but would instead gift the entire market to offshore, unlicensed entities. This shift presents several existential risks to the Brazilian regulatory landscape:
- Growth of the Informal Sector: Without a legal alternative, bettors would be pushed toward the “black market”, where no player protection mechanisms exist.
- Loss of Oversight: A ban would dismantle the ongoing work of the SPA 2026-27 regulatory agenda, which is designed to monitor operator behaviour in real-time.
- Economic Impact: The IBJR highlighted that the sector’s financial contribution, including the BRL 30 million licence fee and increasing gaming taxes, is vital for social development.
Countering the “Household Debt” Narrative
A central pillar of the IBJR’s defence is the use of technical data to address concerns about family indebtedness. The Institute cited a study by LCA Consultoria, which found that spending in the betting sector accounts for only 0.2% to 0.5% of Brazilian household consumption.
To proactively mitigate financial risks, the IBJR reminded stakeholders that the regulated environment already includes stringent safeguards that are absent in the illegal market:
- Ban on Credit Cards: Licensed platforms are prohibited from accepting credit cards or cryptocurrencies to prevent debt-funded gambling.
- Mandatory KYC: Operators must utilise facial recognition and rigorous identity verification.
- Control Tools: Features such as deposit limits, time-outs, and self-exclusion are mandatory under current Secretariat of Prizes and Bets (SPA) rules.
Regulatory Tensions and Market Stability in Brazilian Market
The President’s comments come at a delicate time for the industry, as operators navigate the bill on cashback, VIP, and gamification betting restrictions. These evolving restrictions already place high compliance burdens on licensed entities. Industry advocates have long argued that additional fiscal or prohibitory pressure could reach a breaking point. This sentiment is echoed by broader trade groups, as seen when the ANJL warned about online gambling ban revenue loss, highlighting that the government risks losing billions in tax revenue if it reverts to a prohibitionist stance.
Outlook: Strengthening the Formal Market in Brazil
The IBJR concludes that the most effective way to “strangle” illegality is to strengthen the formal market rather than abolish it. Backtracking on regulation would not only suppress revenue for public services but also leave the most vulnerable citizens exposed to unregulated platforms with no accountability.
For B2B stakeholders and international investors, the current climate underscores the importance of transparent dialogue with the National Congress. While the President’s rhetoric is a cause for concern, the statutory reality, anchored in Law No. 14,790/2023, remains the primary path forward. The focus for 2026 remains on refining these “modern regulations” to prove that a secure, responsible, and taxed industry is a net positive for the Brazilian state.