Brazil’s betting ban sparks backlash from world’s biggest bookies

President Luiz Inácio Lula da Silva declared an outright ban on online betting in Brazil on Friday, and the impacts are likely going to be felt far beyond the South American nation. The nation has seen its gambling market grow exponentially since first being made legal two years ago, with a competitive earnings baseline of $9.5bn according to the Blask Index and more than R$8.7bn (£1.2bn) in betting taxes declared in H1 2026. Operators including Flutter Entertainment, Betano, Superbet and bet365, as well as suppliers like Playtech, Kambi and Evolution, class Brazil as an important part of their respective operations. Flutter’s “huge opportunities” in Brazil crushed During a recent fireside chat, Flutter’s Chief Financial Officer, Rob Coldrake, remarked that the company continued to see “huge growth opportunities” in Brazil going forward. But Lula, who has always been cynical about the sector, has kyboshed any chance of said “huge growth opportunities” in one fell swoop with his decision on Friday night. A Flutter spokesperson said that the company received the news of Lula’s intentions with “surprise and great concern”, describing the move as “a measure that could represent the prohibition or dismantling of an activity authorised and regulated by the Brazilian State itself”. “Brazil decided to regulate this market, establishing rules, authorizations, and oversight mechanisms,” the spokesperson continued. “Based on this milestone, companies like Flutter Brazil invested in the country, paid licensing fees, generated jobs, and began paying taxes under State supervision. “The demand for betting does not cease to exist with the removal of authorised operators. “A ban tends to push consumers toward illegal platforms, where mechanisms such as user identification, deposit limits, transaction monitoring, self-exclusion, and anti-money laundering prevention are not guaranteed.” Like many other markets, Flutter entered Brazil via acquisition. The company acquired NSX, operator of Betnacional, in May 2025. This became the basis for Flutter Brazil, a division which delivered revenue of US$74m (£55.7m) in H1 2026. Flutter leadership and investors now face the prospect of losing this segment, which grew 722% year-on-year in H1. This comes at a time of changing leadership for the company and amid a huge drop off in its share price year-to-date. Entain and Flutter crunch the numbers Like Flutter, UK-based multinational Entain saw strong prospects in Brazil. Leadership cited Sportingbet’s performance in Brazil, where the firm is the fourth biggest by online traffic according to Blask, as having particularly strong potential during its own H1 earnings results. Following Lula’s announcement, Entain revealed that it expected Brazil to represent around 5% of its online net gaming revenue (NGR) for FY26 – though it expected EBITDA to “be modest” due to the “challenging and highly competitive operating environment”. The LSE-listed company expects group revenue and online underlying EBITDA margin to still fall within the range of £910m-£960m and 21-22%, respectively. However, it expects both to fall in the lower end of the ranges due to the Brazil news. It also expects online NGR growth of 4-6%, factoring in its year-to-date performance in Brazil and “assuming the immediate ban is upheld for the remainder of 2026”. “Entain is disappointed by this sudden development without consultation of industry stakeholders regarding its significant adverse consequences,” Entertain’s statement continued. “However, Entain’s operations in Brazil are complying with the provisional measure.” Flutter has been taking a look at numbers too, though the firm is using them more to poke holes in Lula’s agenda. The company cites estimates that the share of the illegal market fell from the range of 41-51% in 2025, the first year of regulation, to 38-44% this year. The company also argues that there will be “widespread” economic consequences. This includes the potential loss of between R$58bn-R$73m in tax revenue between 2027-2030, the loss of around 15,000 direct and indirect jobs, and roughly R$3n in media advertising spent by the 15 largest betting companies. Lastly, it has also appeared to have an impact on sports. Flutter pointed out that 18 out of 20 Brasileiro Série A had betting partners to the tune of R$1.1bn in 2025, while Brazilian sports in general, including Olympic and Paralympic sports, gained R$1.6bn from fixed odds betting in the same year. “Given this scenario, Flutter Brazil advocates for the maintenance of the regulated market and believes that protecting society means strengthening oversight, responsible gaming, and the fight against illegality,” Flutter’s spokesperson added. Allwyn: Betano may take legal action Allwyn’s statement relates to the Swiss-based international’s 36.75% minority stake in Kaizen Gaming, which operates the Betano brand. Brazil is currently a major market for Betano, with Blask placing the operator first in terms of market share and brand awareness at around 25%. Independent market penetration studies also highlighted Betano as the most downloaded sports app in Brazil for 2025. As per Allwyn, Betano is now evaluating all available legal options, including a lawsuit to protect the rights of its five-year contract currently in place that was issued by the Secretariat of Bets and Prizes (SPA), the betting regulator under the Ministry of Finance. This licence came into effect on 1 January 2025 after Lula greenlit the market in December 2024. Regarding Allwyn’s own accounts, the company noted that, should the ban remain in place by the end of 2026, the previous FY26 guidance of 37% in Adjusted EBITDA would no longer be applicable as a direct result of the impact on Betano. “This assessment remains preliminary and is subject to ongoing review as the company continues to evaluate the implications of the measure and potential mitigating actions,” Allwyn added. “The exact impact would be dependent on, among other factors, the timing and effectiveness of measures to reduce certain costs that are not typically variable in the short term.” Better Collective suspends FY guidance Speaking to investors on Monday, Better Collective Chief Executive Officer, Jesper Søgaard, announced that the company’s FY 2027/28 guidance has been suspended as there was no sufficient visibility to provide financial targets as a result of the Friday ban. Søgaard added that right before Lula’s announcement, Better Collective was heading towards €45m in domestic 2026 revenue, or approximately 12% of the expected FY26 total revenue of the group. The financial impact following the ban is now expected to wipe out around €15m of projected revenue over the end of Q3 and the entirety of Q4. Not relying on a short-term reversal of the gambling ban, Søgaard added that Better Collective’s revised 2026 guidance includes no betting and casino revenue from Brazil. To preserve financial flexibility, management has also temporarily suspended the company’s share buyback programme. Søgaard maintained that his team remains a “strong supporter of a licensed and regulated betting market in Brazil”, adding: “Removing that regulated market will not eliminate the underlying demand for betting. “Instead, it risks pushing millions of players toward illicit offshore operators that have not made these investments, pay no local taxes and operate without the same player protections. “Our concern is that a measure intended to protect consumers could ultimately dismantle a regulated ecosystem that was specifically created to protect them.” Asked about the potential near-term future following the 4 October elections, the CEO added that Flávio Bolsonaro emerging victorious would be a “good outcome”, alluding to the Bolsonaro Family’s historical support of sports betting, and the fact that the majority of Better Collective’s Brazil revenue comes from betting. Suppliers feel the heat Similar disappointment was echoed by Werner Becher, CEO of Sweden-listed iGaming supplier Kambi. Becher, whose business has experienced marginal gains through leveraging of the Brazilian iGaming boom, was another leadership figure pointing out that “prohibition risks driving consumers towards black market alternatives”. He did, however, affirm that the financial impact from the ban will be limited, given that Brazil “represents a low single-digit percentage of Kambi’s revenue. The firm had recently delivered its Odds Feed+ product to Rei do Pitaco in the country. “Kambi is disappointed by the order to prohibit regulated online betting in Brazil. We firmly believe that a well-regulated betting market, with strong consumer protections and effective oversight, provides the best framework for protecting players,” Becher said. “Prohibition risks driving consumers towards black market alternatives where those protections do not exist. “We will of course comply fully with this order but note that it is currently ‘provisional’ and must receive congressional approval soon after October’s presidential election. “Brazil currently represents a low single-digit percentage of Kambi’s revenue and, as a result, we expect the financial impact on the group to be limited.” Legal perspective: “Brazil’s credibility at stake” São Paulo-based lawyer Neil Montgomery took to LinkedIn with a comment that Lula’s provisional measure has put “Brazil’s credibility as a place to do business and upholding the rule of law at stake”. Montgomery went as far as calling the ban “an illegal presidential act”, detrimental to the efforts made so far to create the necessary safeguards for a stable market. “It feels not only like stealing the lollipop but also slapping the child in the face,” Montgomery added. According to the lawyer, the provisional measure will cancel all licences thirty days from its publication, with operators receiving no refund entitlement for the unused part of their five-year licences. “The repercussions of Lula’s actions transcend the gaming industry. It is yet another clear sign that legal certainty is fading in our country. Whether one is for or against gaming, it will now be the duty of our judicial system to uphold the rule of law to curb this latest abuse.” Doomsday for Brazilian betting? While Kambi’s bottom line may not be massively impacted, and multinational giants like Flutter and Entain will have a safety net from their positions in other markets, it is safe to say that a betting ban in Brazil will completely shake up the iGaming ecosystem. This is easily the most difficult day for industry businesses active in Brazil since the market launched on 1 January 2025. It is also one that Lula’s administration has been building up to for a while, however, with the president initially considering just a ban on online casinos. However, the final whistle has not been blown yet. Brazil’s Congress is still yet to approve, amend or reject the measure. We can now expect a mad dash to the lobbying finish line, with voices in favour and against the industry to clash in the national legislature. As is always the case with legislative developments like this, Brazil’s betting industry needs to make sure its communications strategy is on point over the coming days, weeks, or even months… Article co-authored by Ted Orme-Claye, Viktor Kayed and Patrick Killeen