By Dilyan Dimitrov
On 25 September President Lula signed Provisional Measure 1,394. It bans online betting and online casino in Brazil with immediate effect. Licensed sites go dark on 6 October, the 85 licences are cancelled 30 days after publication, and the BRL 30 million each operator paid for five years of them - BRL 2.55 billion in total, about USD 490 million - is not refunded. Congress has 120 days to confirm the measure or let it lapse.
Nine days later Brazil voted. Flavio Bolsonaro took 47.7% in the first round against Lula’s 44.3%, and the run-off is on 25 October. Bolsonaro has called the ban electioneering and says he would bring back sports betting, though not online casino. So the market that was built over 21 months may be gone for four months, or for good. Nobody knows, and that is the point of this note.
I have spent most of my career advising on gaming transactions in Central and Eastern Europe, and I have never seen a cleaner demonstration of what happens when a state stops regulating a vice and starts prohibiting it. The data is a week old and it is already conclusive.
What was switched off
Brazil legalised fixed-odds betting in 2018 and spent five years not writing the rules. Lula’s own government finally did, in Law 14,790 of December 2023, and the licensed market opened on 1 January 2025.
It worked. Licensed operators took BRL 36.9 billion of gross gaming revenue in 2025, about USD 7 billion, from 25 million bettors. Taxes and statutory social allocations came to close to BRL 10 billion in the first year. In the first half of 2026 GGR was BRL 20.1 billion, up 15%, with BRL 2.5 billion of tax and another BRL 2.5 billion of allocations. The regulator blocked 25,000 offshore sites, closed 550 bank accounts and barred five million people from betting, three million of them welfare recipients.
The number that matters most is the one nobody in Brasilia quotes. The illegal market’s share fell from 41-51% in 2025 to 38-44% in 2026, on the industry’s own survey of 2,291 bettors. Two years is not long. The trend was in the right direction.
Compare that with August 2024, before any licence existed. The central bank counted BRL 20.8 billion sent to betting sites by instant transfer in that one month, ten times the sales of the official lottery, and BRL 3 billion of it came from five million Bolsa Familia households. That is the market the ban returns Brazil to: the same money, no tax, no limits, no exclusion list.
Who paid for the market that no longer exists
The licence fees are the smallest part of the loss.
Flutter paid USD 350 million in May 2025 for 56% of NSX, the owner of Betnacional, and folded Betfair Brazil into it. Brazilian revenue was USD 74 million in the first half of this year. The group carries about USD 820 million of Brazilian goodwill, customer lists, trademarks and software on its balance sheet, and has told the market to expect USD 70 million less revenue and USD 20 million less EBITDA in 2026. The shares fell 11.5% in five days.
Kaizen Gaming’s Betano is the market leader with a quarter of licensed revenue, and Brazil was its largest single market. Allwyn, which owns 36.75% of Kaizen after buying the stake from OPAP in 2022 for EUR 50 million plus earn-outs, has withdrawn its 2026 margin guidance. Betano pays Flamengo BRL 268.5 million a year to 2028 and holds the naming rights to the Serie A. It is preparing to sue.
Entain’s Sportingbet was 5% of group online revenue; the company now guides to the bottom of its GBP 910-960 million EBITDA range. Super Technologies, the Superbet parent, was the third-largest licensee, sponsors Fluminense and Sao Paulo, and used part of its EUR 1.3 billion refinancing last year to fund Brazil. Evolution has 9% of its sales there. Better Collective, the affiliate, had 12% of its revenue in Brazil; it suspended its buyback, withdrew its 2027-28 targets and lost 37% of its equity value in a week.
Bulgarian companies are in the same queue. Amusnet set up a local subsidiary and has 160 certified games live. EGT Digital has been a licensed supplier since January 2025 and signed Esportes da Sorte, one of the largest local operators, on 2 September - three weeks before the ban, and a month before the state sued Esportes da Sorte along with 16 other operators for BRL 1 billion in damages. CT Interactive certified in February 2025. None of them will disclose what Brazil was worth, but all three built teams and paid for certification against a five-year licence that lasted 21 months.
Brazilian football has 13 of 20 top-flight clubs in betting shirts and took BRL 1.1 billion from the sector last year, a third of its marketing income. The government is drafting a BRL 20 billion soft-loan scheme to replace it. That is a tax bill with extra steps.
Where the demand goes
Here is what happened in the five days after the announcement, before a single licensed site had closed.
Monitored unlicensed domains went from 381 on 25 September to 1,071 on 29 September. Domains actually serving Brazilian players went from 1,151 to 2,019 by 2 October. New illegal sites had been appearing at 14 a day over the summer; the rate went to 143 a day. The offshore share of Brazilian search demand for gambling went from 3.4% to 11.3%, the highest since the licensed market opened. The ministries flagged 5,209 domains for blocking; the telecoms regulator managed 2,387. The betting secretariat has four employees.
H2 Gambling Capital expects about 60% of the licensed market, roughly BRL 25 billion a year, to carry on with unlicensed operators, and the rest to stop. Flutter puts the tax foregone at BRL 58-73 billion over 2027-2030. Lula himself conceded on 1 October that bans “spawn illegal alternatives” and that the measure offers no permanent solution. He signed it anyway, with 78% of voters telling Datafolha they approved.
I do not think the forecasts are the strongest evidence. Brazil’s own history is.
Brazil has done this before
In April 1946 President Dutra closed the country’s 70 casinos by decree, overnight, on the grounds that “repression of gambling is an imperative of universal consciousness.” Forty thousand people lost their jobs. Gambling did not stop. It moved into the bingo halls of the 1990s, which were banned in turn, and into the slot parlours that operate in every Brazilian city today without a licence.
The jogo do bicho, the animal lottery, was first banned in the 1890s and definitively criminalised in that same 1946 decree. It has been drawn every day since. By the mid-1990s it turned over more than USD 2 billion a year and employed 50,000 people in Rio alone. When police raided the home of its leading banker, Castor de Andrade, in 1994, they seized account books listing payments to a former president of the republic, the governor of Rio, the mayors of Rio and Sao Paulo, three judges, twelve congressmen, 25 police commissioners and a hundred officers. The bicheiros have financed Rio’s samba schools since the 1970s. The game is still a misdemeanour, which is why it has never been stamped out.
That is the mechanism. A regulated market pays its rent to the budget. A prohibited market pays the same rent, to the people whose job is to look the other way. The product does not change; the recipient does. How much leaks depends on how clean the state is. Brazil scores 35 out of 100 on Transparency International’s 2025 index and ranks 107th in the world. I would not bet on the BRL 25 billion that goes underground being policed by four civil servants.
Why this matters in Sofia
Bulgaria is drafting its own Gambling Act amendments, in consultation until 23 October. The online levy rises from 20% to 22% of GGR by 2028 with a non-reducible EUR 100,000 a month per operator, land-based goes to 23%, affiliates are abolished from January and almost all advertising disappears. I have written here before that these are heavy measures, and that half of the 26 online licensees pay less than the new minimum.
But the licences stay. Operators who meet the bar keep a legal product, a bank account and a regulator to answer to. Players keep a licensed site to lose to. That is the whole difference. Bulgaria is tightening the rules inside the tent; Brazil has burnt the tent.
I do not want to overstate Bulgaria’s position. We score 40 on the same index, the lowest in the European Union alongside Hungary. Between a third and 40% of Bulgarian online play already goes to unlicensed sites, and the figure for Eastern Europe as a whole is put at 81% by a report published last month. We have our own prohibition precedent: in February 2020 parliament banned private lotteries with 90 days’ notice, the chairman of the gambling regulator was arrested the same month, and the regulator itself was dissolved into the tax agency that summer. Corruption does not need a ban to find a gaming market. But a ban guarantees it.
So the lesson I take from Brazil is not about Brazil. For anyone who owns or is buying a gaming asset in this region, the licence is not the asset. The political consensus that the licence should exist is the asset, and it should be priced like the option it is. A multi-market operator absorbs a Brazil as a guidance cut. A single-market business, or a supplier with one big customer, does not. Diversify the jurisdiction risk before the buyer discounts it for you, and when a government offers to tighten the rules rather than tear them up, take the deal.
We follow the Bulgarian consultation and the Brazilian Congress closely and will publish as both move. If you are weighing a gaming transaction in the region over the next twelve months, we are happy to walk through how the regulatory risk should sit in the price.
(Sources: Rio Times, 29 September and 4 October 2026; iGaming Business, 19 June and 18 August 2026; H2 Gambling Capital, “Assessing the Impact of Brazil’s Online Betting Ban”, September 2026; Gambling Insider, 3 October 2026, citing Bet Legal, ANJL and Blask; NEXT.io, 28 and 29 September 2026; Entain RNS, 28 September 2026; Better Collective release, 27 September 2026; Agencia Brasil, 24 September 2024; LCA Consultores for IBJR, August 2026; Transparency International, Corruption Perceptions Index 2025; Focus Gaming News, 2 September 2026; CasinoBeats, 3 October 2026; Bulgarian Ministry of Finance draft, strategy.bg, 23 September 2026)