Brazil plans executive order to ban online casinos, sources say

By Lisandra Paraguassu

BRASILIA, Sept 17 (Reuters) - Brazil's government ‌is preparing an ​executive order ​to ban online casino operations in the country despite concerns over lost tax revenue and potential legal challenges from companies licensed to operate in the country, sources familiar with discussions within the ‌presidential office told Reuters.

Leftist President Luiz Inacio Lula da Silva, who has repeatedly signaled he wants ⁠to curb online gambling, is expected to sign off on the final text before the first round of general elections on October ‌4, according to three sources, who spoke ‌on condition of anonymity.

Lula and several of his right-wing rivals have made online gambling a frequent target on the campaign trail, as polls show growing concern over the state of the economy among voters.

According to ​two of the sources, the ban would not extend to sports betting or sponsorship agreements involving sports clubs and competitions.

Companies, however, typically operate in both businesses, with gambling accounting for three-quarters of their revenue, according to ⁠the National Association of Gaming and Lotteries, an industry group.

The licenses granted by the government last year cover both online casino games and sports betting. ​There are currently 188 authorized betting operators in Brazil.

A separate source said Lula "wants and will take action," but discussions with ministers are ongoing.

"We are discussing it. I have already ​held three meetings within the government and met with civil society, ‌and my personal position is to end betting," the president said earlier this week, adding that the government must act responsibly.

Officials acknowledge that banning online casinos while preserving sports ⁠betting would significantly reduce operators' revenues, affecting sports sponsorship spending and government tax receipts.

Treasury data show the government collected nearly 10 billion reais ($1.95 billion) last year through licensing fees and taxes from the sector.

Fixed-odds sports betting was legalized in Brazil in 2018, but ⁠the process of regulating and licensing operators was only completed during Lula's administration in 2024.

HOUSEHOLD INDEBTEDNESS

Lula's government has introduced a series ​of measures aimed at preventing excessive indebtedness, but spending on online betting has nevertheless risen sharply.

The Finance Ministry estimates that Brazilians spend about 60 billion reais a year on betting, as banks and industry groups point to evidence that gambling is siphoning money away ‌from consumer spending and household bills.

The National Association of Gaming and Lotteries argues that any new restrictions should be preceded by studies that assess the economic and legal ‌costs for companies already authorized to operate.

Bernardo Cavalcanti Freire, the group's legal adviser, said changes that restrict activities covered by licenses for ⁠which operators paid concession fees could lead to ‌claims for reimbursement and compensation.

"Based on ​a preliminary estimate, compensation liabilities could reach 120 billion reais," he said.

($1 = 5.1341 reais)

(Reporting by Lisandra Paraguassu; Additional reporting by Marcela Ayres and Bernardo Caram; Writing by Isabel Teles; Editing by ‌Paul Simao)

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