Betting Sites: Counterattack Against Supreme Court Veto

The full veto of the Provisional Measure banning sports betting was announced by President Lula nine days before the first round of elections, sparking an immediate reaction from the sector. Companies, associations, and lawyers met virtually and decided to challenge the decision on two fronts: judicial and political.

Class action in the Supreme Court

In a meeting with roughly 180 representatives, the sector aligned its intention to take collective action before the Supreme Court. The president of the National Association of Games and Lotteries (ANJL), Plínio Lemos Jorge, estimated a “98%” chance of a class-action lawsuit at the STF requesting the suspension of the provisional measure and the immediate resumption of operations, describing the measure as “authoritarian, reminiscent of Chavismo.”

The companies intend to challenge the constitutionality of the decision, contesting data presented by the government and asserting a lack of factual basis in the provisional measure. They will also argue that the provisional measure lacks the authority to overturn state-level licensing of betting operators, citing a 2020 ruling recognizing that the federal Executive has the prerogative to regulate, but not exclusive rights over operation.

Congress awaits post-election debate

In Congress, the provisional measure must first be reviewed by a joint committee of 12 federal deputies and 12 senators. Senator Angelo Coronel (Republicanos-BA), rapporteur of the bill that regulated sports betting in the Senate, stated that the issue will only be debated after the elections. Lawmakers in dialogue with the segment anticipate amendments to the measure, but acknowledge that fast-tracking the debate in the short term is impossible.

Amendments and negotiations in Congress

Lawmakers were already in talks with the sector prior to the provisional measure. A study indicates that the legal betting market generates around R$ 54.3 billion annually, while the illegal market ranges between R$ 32.9 billion and R$ 43.3 billion. Federal Deputy Jonas Donizette (PSB-SP) concedes that the strength of industry representatives could drive amendments, but anticipates the provisional measure could be upheld. Meanwhile, Deputy João Carlos Bacelar Batista (PV-BA) argues that prohibition is “inefficient” and that gambling has accompanied society since the dawn of human life.

Economic and social impacts

Betting executives argue that the provisional measure is overly broad, revoking not only company licenses but also the entire ecosystem of payments and services supporting the platforms' financial transactions. Job losses and the impact on sponsored activities, such as soccer, are also cited as arguments to be presented to the Judiciary and Congress.

Government reaction and outlook

The Lula administration plans to summon soccer clubs to discuss financial aid for teams impacted by the ban. At an event in São Paulo, Lula defended the decision, claiming the ban prevents “poor people from falling into debt.” During an event in Rio, Flávio Bolsonaro (PL) reiterated the strategy of branding Lula the “father of the little tiger,” a reference to online gaming formats.

According to economist Elena Landau, the sudden provisional measure without a transition period could scare away international investors, as it demonstrates that the government can revoke licenses “overnight.”

With information from O GLOBO.