Brazil Prepares Executive Order to Ban Online Casinos

Brazil's government is preparing an executive order that would prohibit online casino operations in the country, according to four people with knowledge of discussions inside the presidential office. The measure is expected to be issued within days, and President Luiz Inacio Lula da Silva is likely to approve the final text before the first round of general elections on October 4, the sources said, speaking on condition of anonymity.

Under the plan described by two of the sources, the ban would not cover sports betting or sponsorship arrangements involving sports clubs and competitions. Even so, the restriction would reverberate through those sectors, because nearly every licensed sports betting operator also runs online casino games, and casino activity generates most of their earnings.

One source estimated that between 50% and 70% of revenue at such operators comes from casino games rather than sports wagering, and that this is the money that supports club and championship sponsorships. The licenses issued by the government last year cover both online casino games and sports betting, and there are currently 188 authorized betting operators in Brazil.

Another source said Lula "wants and will take action," while noting that talks with ministers are still underway. Lula said earlier this week that discussions were ongoing and that his personal position was to end betting, adding that the government must act responsibly. He said he had already held three meetings within the government and met with civil society groups.

Officials recognize that banning online casinos while keeping sports betting would sharply cut operators' revenues, with knock-on effects on sports sponsorship spending and government tax receipts. Treasury data show the government collected nearly 10 billion reais, or about $1.95 billion, last year through licensing fees and taxes from the sector.