Brazil bans online gambling, hits esports sponsorships

President Luiz Inácio Lula da Silva issued a provisional executive order banning online gambling and fixed-odds sports betting across Brazil. The decree blocks new user deposits immediately, instructs platforms to allow withdrawals through Oct. 5 and needs congressional approval within 120 days to become permanent. Lula described gambling addiction as a “cancer” harming families.

The order prohibits operators from offering, operating or advertising online betting services nationwide. Network providers must block betting websites shortly after the decree takes effect. The government confirmed that companies that paid upfront concession fees — about R$30 million each for national market access starting January 2025 — will not receive refunds, creating unrecoverable costs for licensed operators.

The ban affects commercial relationships between betting platforms and Brazil’s esports scene. Several major teams have master sponsorships tied to gambling companies, and organisers of local tournaments have depended on those sponsors for venue costs, prize pools and production. In the Brazilian Counter-Strike 2 scene, most domestic LAN events have relied on a single dominant betting sponsor for funding.

Beyond team sponsorships, betting platforms provided funding for many content creators and financed domestic broadcasting rights for larger international events hosted in Brazil. With offers, operations and advertising of betting services banned, organisations face immediate reductions in commercial income that could affect operations, player salaries and the staging of smaller tournaments.

Industry representatives warn that removing legal platforms could push users toward illegal operators already active in the region. The sector cites an estimate that more than 30 million Brazilian users might migrate to black-market platforms despite planned network blocking.

A study by Atlas and Bloomberg found 59.9% of Brazilian adults back a ban on gambling, with many respondents citing household debt and addiction as reasons for support. The administration framed the measure as a protection for families from financial harm.

Betting companies are expected to mount legal challenges and increase lobbying during the 120-day congressional window. The government’s decision not to refund concession fees raises the financial stakes for operators and may shape upcoming litigation and political debate.

Esports stakeholders say the sector will need to pursue alternative sources of revenue if the ban remains in force. Proposals mentioned include new commercial partners, different monetisation models for creators and a return to older sponsorship structures, with transition timelines and outcomes remaining uncertain.

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