Brazil Supreme Court ruling on gambling market closure may not come until after the elections

Industry experts believe Brazil's Supreme Court may not rule on the abrupt closure of the country's regulated gambling sector until after the nation's general election. The delay could sharpen the political contest between President Lula and his opponent, Flávio Bolsonaro, who is expected to try to capitalize on the backlash from operators, sports teams and media companies.

The closure stems from Lula's Provisional Measure No. 1,394/2026, which banned all forms of fixed-odds betting nationwide. Many licensed operators are now demanding refunds of their 30 million reais ($6 million) licensing fees, and several lawsuits have been filed seeking to overturn the decision.

According to a report by Brazilian outlet UOL, the shutdown could significantly hurt the economy. Regulated operators employ more than 15,000 people, and many leading sports teams and media outlets depend on gambling sponsorships. The public purse could also lose about $14.7 billion in tax revenue.

Shirt sponsors received a limited concession: the government agreed to allow the sale of gambling-branded shirts manufactured before the ban. The exception does not cover match kits, training uniforms, stadium advertising or social media activity. Lula has said clubs can cope with the disruption by securing new sponsorship agreements.

Brazil's Attorney General has asked Supreme Court Justice Luiz Fux to reject operators' compensation claims and to bar any lawsuits challenging the ban. Even if the country eventually restores its regulated market, operators are likely to seek damages for lost profits. Broadcasters and soccer unions have also joined forces against the measure.

The election provides important context. Experts suggest Lula may have sought popular support by tapping growing discontent with gambling, but they also see a risk that the ban hurts his reelection chances as media and sports clubs rally against it. Many observers expect Bolsonaro, if elected, to restore gambling, so the vote is likely to shape the future of the licensed market and related industries.

Congress will also vote on the provisional measure, though that may not happen until 2027. In the meantime, operators and clubs are reportedly minimizing expenses and looking for ways to freeze existing partnerships.