Brazil’s President Luiz Inácio Lula da Silva is facing industry criticism after he urged the government to unite to ban online betting, in an address to the nation on Sunday for International Women’s Day.
During the speech he describing gambling addiction as a “tragedy” for the nation. “Although most addicts are men, the burden falls on women,” Lula said. “It’s the money for food, rent and children’s school that disappears on the cell phone screen.
“Gambling dens are prohibited in Brazil. It makes no sense to allow gambling to enter homes, indebting families through cell phones.
“Let’s work together, uniting the government, Congress and the judiciary, so that these digital casinos don’t continue to indebt families and destroy homes.”
Notably, it was Lula’s government that regulated online gambling in December 2023, with the licensed market going live on 1 January last year. The legislation included a myriad of protective measures for players, including a recently launched national self-exclusion scheme.
Industry describes Lula’s comments as ‘disrespectful’
Atucha Strategic Advisory founder and CEO Ramiro Atucha told iGB on Monday that Lula’s comments were “disrespectful” to investors in the Brazilian market, warning their confidence in conducting M&A could be damaged.
In Atucha’s view, it is particularly unjust for Lula to slam the sector, when licensees have to adhere to strict regulation in terms of KYC and certification, while facing a hefty tax burden and a BRL30 million licence fee.
He also cautioned that banning online betting would only drive players to the black market, telling iGB: “I struggle to believe that someone as smart as [Lula] will not know that the players are going to end up in the unregulated market.
“All the problems they are listing are to do with unregulated operators, not with regulated operators.”
President Lula’s proposed betting ban shows ‘misunderstanding’ of legal sector
Meanwhile, Partner for Gambling & Crypto at Bichara e Motta Advogados Udo Seckelmann said Lula had displayed a “misunderstanding” of how the online betting sector works in Brazil.
“Online betting has existed for years through offshore/unlicensed operators; regulation under Law No 14,790/2023 and the Ministry of Finance’s ordinances – which occurred during his mandate and with his full awareness – was designed precisely to bring that existing activity under supervision,” Seckelmann explained.
“Prohibition would not eliminate the market – it would simply push it back into the shadows.”
Both Atucha and Seckelmann agreed Lula’s plans to ban online betting were unrealistic, especially with the potential backlash and expected surge of black market activity.
“In my opinion, the chances are limited,” Seckelmann added. “Reversing that system would require a new legislative process and broad political support, which currently seems unlikely.”
Atucha concurred, saying: “The backlash of that, first in stopping the tax collection and revenues, and second on lawsuits, is going to be huge, and it’s going to establish a very negative precedent for any company considering investing in Brazil.”
AMIG expresses ‘surprise and concern’ over Lula comments
The Association of Women in the Gaming Industry (AMIG) said in a blog post on Sunday that Lula’s comments had caused “surprise and concern”, criticising the president of his “lack of understanding” of the sector.
Of particular concern for AMIG was the timing of the comments, as well as Lula’s apparent disregard for the role women themselves play in Brazil’s gambling sector.
In its statement AMIG said: “For AMIG, this date is not just symbolic – it is a permanent reminder of the collective responsibility to transform structures, expand opportunities and ensure that women occupy leadership and decision-making positions in all sectors of society, including the Brazilian gaming and betting industry.
“Taking advantage of a moment that should be one of celebrating Brazilian women, to threaten a measure that could have a direct impact on working women who support their families ethically and with dignity cannot be acceptable under any circumstances or scenario.”
Latest attack on gambling by Lula’s government
Despite the crucial role of Lula’s government in the regulation of gambling, it has made numerous attempts to restrict licensed operators since the market went live.
It has made various attempts to raise the tax rate on operators, with the government homing in on the gambling sector to help plug the BRL20 billion budget gap left by its failed efforts to hike the rate of financial transactions tax from 0.38% to 3.5%.
Its attempts to raise the gambling tax from 12% to 18% ultimately failed, although Lula’s government did manage to get a tax rise through in late-2025, with the president approving a gradual tax rise that will increase the rate to 15% from 2028 onwards.
Lula’s comments over the weekend are also not the first time a key member of his government has threatened to ban online betting.
In July last year, Finance Minister Fernando Haddad sparked uproar by claiming he would vote to ban gambling if such a bill were put forward in the Chamber of Deputies.
The gambling regulator, the Secretariat of Prizes and Bets, sits within Haddad’s Ministry of Finance.
The comments faced intense industry criticism, with the National Association of Games and Lotteries accusing Haddad of missing the key issue of illegal gambling.
The Brazilian Institute of Responsible Gaming also hit out at Haddad’s comments.
Original article: https://igamingbusiness.com/offshore-gaming/brazil-sector-hits-back-president-lula-betting-ban/
