“Bets” Provisional Measure: ABRAJOGO director warns of impacts on legal certainty and the attraction of foreign investment to Brazil

The Brazilian Association of International Gaming Operators and Providers (ABRAJOGO) published an article on LinkedIn this Wednesday (14) regarding the impacts of Provisional Measure No. 1.394/2026 on legal certainty and regulatory predictability in Brazil. Authored by Aldi Almeida, the organization’s director of government relations, the text addresses the potential consequences of shutting down the regulated sports betting and online gaming market for domestic and international investments. Read the full article: Does the Brazil that opens its doors to foreign capital offer the legal certainty to retain it? Attracting investment in the global macroeconomic landscape depends not only on business opportunities but also on legal certainty, the stability of contractual relations, and the predictability of state decisions. Investor confidence is grounded in the assurance that the rules of the game and the commitments made will be respected. In effect since September 25, Provisional Measure No. 1.394/2026 mandated a ban on the regulated market for fixed-odds betting and online gaming in Brazil, intensifying the debate regarding legal certainty in the country. The shutdown of operations, which began on October 6, is taking place without an adjustment period commensurate with the scope of the sector’s activities and without the public presentation of an impact study to assess the consequences. There is also a constitutional issue that warrants attention. Article 62 of the Federal Constitution—the country’s supreme law—makes the issuance of provisional measures by the President of the Republic conditional upon the existence of relevance and urgency. While the relevance of the topic is acknowledged, the need for immediate intervention warrants careful analysis, given that the regulatory framework was established by the Federal Government itself in December 2023 and the decision was published during the election period—circumstances that underscore the need to substantiate its urgency. The market was structured based on a detailed regulatory framework established by the State itself, which covered criteria for granting authorizations, the certification of games and systems, the identification and identity verification of bettors, anti-money laundering mechanisms, responsible advertising guidelines, the protection of children and adolescents, and responsible gaming practices, as well as the monitoring of financial transactions and the oversight of operations. Classified as a public service, the operation of fixed-odds betting required domestic and international companies to obtain authorization from the Secretariat of Prizes and Betting, which is linked to the Ministry of Finance. To operate in this market, R$ 30 million was paid per license—valid for five years—totaling R$ 2.55 billion across 85 authorizations. Added to these amounts are investments in technology, infrastructure, information security, the hiring of professionals, and commercial commitments. The Provisional Measure mandated the early termination of the authorizations—with a shortened transition period—and ruled out the possibility of reimbursement for amounts paid or compensation from the public authorities, as stipulated in the measure itself. The issue at hand is not limiting the State’s authority to modify public policies, but rather understanding the consequences of abruptly terminating an activity that was regulated and authorized by the public authorities themselves, in light of the principle of economic freedom. Beyond the betting market, this reflection extends to sectors strategic to Brazil’s socioeconomic development. Activities related to electric power, infrastructure (road, rail, port, and airport), telecommunications, and broadcasting are subject to various regimes of public concessions, permits, and authorizations. Although they present specific legal and regulatory characteristics, these sectors share a need for significant investment, legal protection, and strategic planning. For corporate groups with a presence in different countries and economic sectors, the way Brazil implements changes to its regulatory environment can influence risk perception and future capital allocation decisions. Although the effects of the provisional measure are limited to the betting market, its repercussions are already influencing how international investors assess the country’s institutional predictability.. Even before the decision to shut down the regulated betting market, companies were already facing uncertainty due to tax changes. The increase in the tax burden on companies and the creation of the Selective Tax (IS)—known as the “sin tax”—as part of the tax reform have heightened concerns regarding operating costs, regulatory stability, and the security of long-term investments. In any business activity, risk assessment is an essential part of investment decisions. However, there is a fundamental difference between accepting the uncertainties inherent in the business and facing abrupt changes in conditions established by public authorities. Companies that had met legal requirements, paid concession fees, and structured their operations based on government authorizations began facing the interruption of their activities. The effects of the measure also extend to supply chains across various economic sectors, whose activities and commercial relationships were established with companies in the regulated betting market. Domestic football has incorporated sponsorships into the financial structures of clubs and competitions, while broadcasters, advertising agencies, technology companies, payment providers, and service providers have developed business relationships with authorized operators. The consequences are already manifesting in the termination of contracts, the loss of thousands of jobs, and the revision of projects, with repercussions for the hiring and investment plans of international groups that allocate their resources across different locations. The scope of this scenario, however, is not limited to resources already committed and contracts that have been interrupted. Affecting one of the world’s five largest online betting markets by revenue—according to a study by Regulus Partners, an international consultancy specializing in the sports and leisure sector—this Brazilian decision could set a worrying precedent for institutional and regulatory stability, with repercussions for the risk perception of investors operating across different jurisdictions. Its repercussions could also jeopardize the attraction of international capital, tax revenues, and economic opportunities linked to private projects that might fail to materialize. In the global competition for capital, maintaining the confidence of those who have already bet on Brazil’s potential is just as strategic as winning over new investors. The question remains: what message are we sending to the world when the rules established by the government itself fail to provide the necessary predictability for those deciding to direct capital to the country? O post “Bets” Provisional Measure: ABRAJOGO director warns of impacts on legal certainty and the attraction of foreign investment to Brazil apareceu primeiro em iGaming Brazil.