Lula's Re-election Puts Pressure on Brazil's Betting Sector

Luiz Inácio Lula da Silva won a fourth term as Brazil's president on October 25, defeating Flávio Bolsonaro in the second round with 51.75 percent of the vote. Betting companies had followed the election closely, since Bolsonaro had taken a more supportive stance toward the sector and had also won the first round.

In the meantime, licensed betting sites were forced to suspend their operations until October 6 under interim measure 1,394, issued by Lula on September 25. The measure can remain in force for up to 120 days if Congress neither approves nor rejects it. The legality of the measure is also being debated at the Supreme Federal Court.

Major international companies affected by the measure include Flutter Entertainment and Entain, which operates Sportingbet in Brazil. Flutter said the decision had deeply disappointed it and that it would work constructively with Brazilian authorities to protect customers from the risks of the unregulated market. Entain said the decision, which was taken without consulting industry stakeholders and has serious negative consequences, had upset it.

Market data shows a sharp drop in online betting demand after licensed operators withdrew. According to Blask, iGaming demand fell 13.3 percent week on week between October 19 and 25. The index dropped from 7.26 million to 288 thousand, a low not seen since 2019.

Not all of the lost activity has moved to offshore operators. According to Blask, demand for offshore-based providers is still 9 percent below pre-ban levels.