Lula bans online betting in Brazil and unveils household debt relief plan

Brazil's President Luiz Inácio Lula da Silva on Friday announced a ban on online betting operations in Latin America's largest economy and unveiled a new household debt relief program, Reuters reported. The package is the latest in a series of measures introduced ahead of the October 4 first-round vote, where polls show Lula locked in a tight race with right-wing Senator Flavio Bolsonaro.

What changes

The executive order prohibits online betting and online casino games in Brazil. It takes immediate effect but must be approved by Congress within 120 days to remain in force. Finance Minister Dario Durigan said betting firms' websites will remain available for users to claim remaining funds until October 5, and that app stores and network providers will be required to block these websites on October 6.

"We are facing a public health issue involving online betting. It is a serious problem," Durigan said. The betting industry association ANJL said the measure would push more than 30 million gamblers toward illegal websites and disrespects investments made in compliance with the law. JPMorgan said the listed companies most exposed to Brazil include Evolution, Allwyn, whose Betano business contributes 6% to 7% of EBITDA, Entain and Flutter.

Why the government acted

Officials have argued that betting losses have fueled public dissatisfaction with the economy, despite record-low unemployment and relatively subdued inflation. The Finance Ministry estimates Brazilian households spend around 60 billion reais ($11.57 billion) a year on online betting, generating roughly 10 billion reais in tax revenue. Recent surveys showed roughly three-quarters of Brazilians support a complete ban.

Online betting was legalized in Brazil in 2018 under then-President Michel Temer but remained largely unregulated throughout Jair Bolsonaro's administration. Lula signed legislation in 2023 that established rules and authorized online casino games alongside sports betting.

Senator Flavio Bolsonaro called the measure "populist, hypocritical and politically motivated" during a campaign rally in Rio de Janeiro.

The debt relief program

The government said it will hold an auction in November to buy and restructure household debt, spending 15 billion reais ($2.9 billion) to acquire up to 150 billion reais ($29 billion) of delinquent loans at discounts of at least 90%. The program is expected to cover about half of the debt stock deemed eligible. It targets debts overdue for two to 4.5 years, mainly credit card balances and unsecured personal loans.

"This is a better Desenrola than the previous versions," Lula said. "In the earlier Desenrola, people had to approach banks individually. Now the government will purchase the debt and settle it on behalf of borrowers."