Brazil asks Supreme Court to strike down betting laws
Brazil’s government has asked the country’s Supreme Court to declare the federal laws that created its regulated sports betting industry unconstitutional.
The Attorney General’s Office, or AGU, made the argument in a submission requested by Supreme Federal Court Justice Luiz Fux as the legal battle over President Luiz Inácio Lula da Silva’s new gambling ban intensifies.
The submission targets legislation passed in 2018 and 2023, which respectively legalised fixed-odds betting and established the regulatory framework that eventually produced Brazil’s licensed online gambling market.
It is an extraordinary reversal for a market that only formally launched on January 1, 2025.
Dozens of gambling companies paid R$30 million for federal authorisations allowing them to operate for five years, but less than two years later, the federal government is not simply trying to terminate those licences.
It is now arguing that the underlying laws that allowed them to exist should themselves be ruled unconstitutional. The AGU says the regulatory framework has failed to sufficiently protect constitutional rights including health and human dignity.
It pointed to gambling-related indebtedness and increasing demand for treatment associated with gambling problems as evidence that regulation had failed to adequately protect Brazilians.
The government’s position strengthens the legal battle surrounding Provisional Measure No. 1.394, signed by Lula on September 25, which immediately prohibited new betting deposits and set out a timetable for dismantling Brazil’s licensed fixed-odds betting market.
Players have until October 5 to withdraw money, with licensed sportsbooks and online casinos due to stop operating from October 6.
Their federal licences terminate 30 days after publication of the measure and the government has not offered to refund the R$30 million authorisation fees paid by operators.
The gambling industry is challenging that decision.
Trade groups including the National Association of Games and Lotteries and the Brazilian Institute of Responsible Gaming have turned to the Supreme Court, while individual operators are also considering or pursuing legal action.
They argue companies entered Brazil under legislation passed by Congress, paid substantial licence fees and invested heavily to comply with the new regulatory system. The industry has also repeatedly warned that shutting licensed operators will not eliminate online gambling.
Instead, it argues players will migrate towards thousands of offshore casino and betting sites that don’t comply with Brazilian player-protection, tax or responsible-gambling rules.
The government’s response is increasingly clear: it believes the problem lies not merely with individual operators but with the legal framework that allowed online betting to expand in the first place.
That leaves Justice Fux and ultimately Brazil’s Supreme Court at the centre of what could become one of the most consequential gambling cases anywhere in the world.
