Lula’s re-election leaves Brazil’s licensed betting market ‘in limbo’, says

The advisory firm’s new base case is a blackout that drags on through the courts. That changes the picture for Flutter, Entain, and Betano. 

Brazil’s licensed online betting market is likely to stay shut after President Luiz Inácio Lula da Silva won re-election on 25 October, according to Regulus Partners. The advisory firm now puts an 80% chance on a scenario where the measure banning online betting lapses, but operators’ licences, which expired on the day of the vote, are not restored.

Regulus sets out four scenarios after Lula’s win

Lula won a fourth term with 51.8% of the vote in the run-off. In a note published on 26 October, Regulus said the result is worse for licensed operators but settles nothing.

Regulus Partners said: 

‘A Lula victory is clearly much worse for Brazil’s licensed gambling industry than the alternative, but it does not offer clarity.’

The firm expects a right-leaning Senate and Chamber of Deputies to produce gridlock. In its view, gambling policy will be caught up in high-stakes legal battles while the blackout continues and the black market grows.

Provisional Measure (PM) No. 1,394/2026 banned fixed-odds betting and online casino games from 25 September. Licensed sites went offline on 6 October.

According to Regulus, the measure has drawn more than 90 active amendments. It still needs a simple majority in both chambers to become law by early March 2027. Lula’s left-wing coalition lost ground in both chambers, and the new members take their seats on 1 February 2027.

Base case: A blackout settled in court

Regulus said its previous base case no longer applies. That scenario was a market return after the measure lapsed under a Flávio Bolsonaro government. The firm now expects the blackout to continue while both sides fight it out in court.

The outcome could depend on competing lawsuits:

• If Lula’s allies make concrete progress suing the former licensees for player losses, Regulus said this would ‘probably bury the industry’.
• If operators make progress suing for losses caused by a measure that was effectively overturned, the government might be forced to reopen the market, most likely with new restrictions.

State licensing seen as the only opening

The only hope Regulus now sees is state licensing regimes stepping into the federal gap, and it heavily caveated that view.

São Paulo has around 45 million people, and five other states have populations above 10 million. Minas Gerais, Rio de Janeiro, Paraná, and Paraíba have already used their state lottery structures to issue online betting licences.

Regulus said this route would be messy, open to legal challenge, and almost certainly limited to state borders, as in the US and Canada. Building a state market of scale could take years, ‘offering little hope for those with existing operations to protect’.

What it means for European operators

Flutter, Entain, and Allwyn all framed their 2026 impact around the ban lasting until year-end. Under Regulus’s base case, licences do not return when the measure lapses. That would push the hit into 2027. Allwyn has already said any impact on later periods depends on how long the measure stays in force.

The demand will not disappear. Regulus estimates Brazil’s gambling sector at more than $25 billion. It expects the sector to keep growing without tax or consumer protections, with profits flowing to offshore operators.

Congress has until early March 2027 to vote on the measure. 

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