Brazilian President Luiz Inácio Lula da Silva, who represents the country’s left-wing political forces, secured an unexpected victory over Flávio Bolsonaro. The result will allow him to continue pursuing tighter regulation of the gambling industry.
Lula secured a fourth presidential term, a development that could have serious implications for Brazil’s gambling market. The bill will now be considered by Congress, where its future and prospects of becoming law will be determined.
During the 2026 election campaign, Lula caught the global gambling industry off guard by announcing a Provisional Measure (PM) aimed at repealing the Bets Law. The legislation has governed Brazil’s gambling market since its official launch on 1 January 2025.
However, the future of the initiative remains uncertain. The measure must be reviewed by the National Congress, while its legality is also being examined by the Supreme Court. Deputies, senators and industry organisations have challenged its legitimacy.
Lula Wins Unexpected Victory: Can He Repeal the Bets Law?
The election result came as a surprise and defied even the forecasts of major prediction markets. Lula secured 51.75% of the vote, narrowly beating Bolsonaro.
Following Bolsonaro’s victory in the first round, many expected a change of government. However, Lula made history in modern Brazilian democracy by becoming the first candidate to overturn a first-round defeat.
The election outcome creates an unfavourable outlook for Brazil’s gambling industry. Further clarity is expected next week, when Congress considers the proposed ban.
The National Association of Games and Lotteries (ANJL) will be among the organisations challenging the ban through legal action. Bernardo Cavalcanti Freire, the association’s legal counsel, has repeatedly criticised the restrictions, arguing that they are unlawful.
Speaking at the SBC Summit, Freire said he believed the ban was entirely contrary to the law.
ANJL has expressed confidence that its legal challenge could help pave the way for the gambling market to reopen as the Provisional Measure undergoes further scrutiny.
Earlier this week, the association filed a lawsuit with Brazil’s Federal Supreme Court challenging the provisional executive measure. It called for the measure to be suspended pending further analysis.
Freire also questioned Lula’s claims that gambling contributes to rising household indebtedness and gambling addiction in Brazil. According to Freire, these assertions are supported primarily by research studies rather than concrete statistical data.
“I am very optimistic. I believe what has happened is completely illegal. If we can secure judicial intervention, the market will automatically be able to return to full operation,” he said.
Luiz Felipe Maia, Founding Partner of MYLaw Advocates, also pointed to legal grounds for seeking a court injunction to suspend the measure. He argued that it had been introduced without a prior assessment of its fiscal impact.
However, Maia stressed that the industry might have to make certain concessions to secure a lasting return to the market. Industry stakeholders may need to decide which requirements they are prepared to accept or abandon in order to reach a compromise.
“Online gaming has become a little too much. But are we willing to raise responsible gaming standards, impose stricter advertising restrictions and stop offering certain types of games that are viewed negatively by the public if that is what it takes to keep operating in the market?” he said.
Although Lula’s decision may have strengthened his position at the polls, it has caused considerable concern among companies that invested in Brazil’s gambling market.
Many industry stakeholders are now questioning whether the market will ever return to its previous state.
Evolution Chief Executive Officer Martin Carlesund also expressed dismay at the Brazilian authorities’ decision. During a recent investor call, he admitted that he was “flabbergasted” by the developments.
He stated: “I think that everyone is flabbergasted about the situation in Brazil, that it is a total negative for anyone in this business that it happens in this way.
“It is very difficult to say where we will end up. We are working on it, and I have tried to do everything we can for our employees and everyone on the ground,” Carlesund said.
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