Politics and legislation at loggerheads over future of gaming in Brasília
The first aspect is politics. Congress returned from recess on 3 August, and the government intends to advance PL 2,258/2026 before the first round of the elections. Introduced in May by Congressman Paulo Pimenta (Worker’s Party), the bill amends the Betting Law to ban online casino games with results generated by electronic systems or algorithms, while preserving fixed-odds sports betting.
A second bill, Bill 1,808/2026, would fully repeal the regulatory framework.
A third legislative initiative would restrict advertising, sponsorship and influencer marketing. President Lula, who in 2024 had spoken of integrated casinos as a source of tourism and tax revenue, has instructed his ministers to advocate for the ban.
The second aspect is institutional, and it has not slowed down. The Secretariat of Prizes and Bets (SPA) has opened Public Consultation No. 3/2026 regarding the review of the authorisation process, with a deadline of 9 September.
It is preparing a decree on the design and operation of online casino games, drafted in coordination with the Ministry of Justice and the Secretariat of Social Communication (SECOM). Advertising changes endorsed by SECOM came into effect in July. The National Association of Games and Lotteries met with the Secretariat to discuss the ordinance on game design, proposing a phased implementation. A second licensing window is expected later this year.
Most of the analysis I have read over the past two weeks focuses on the first clock. It is the second one that tells investors what they need to know.
What is actually under discussion
Precision matters here because imprecision comes at a high cost. Bill 2,258/2026 does not dismantle the Brazilian regulated market. It targets a specific vertical defined by a technical characteristic: results generated by electronic systems or algorithms. Sports betting falls outside the scope of the text. The bill remains in the Chamber of Deputies, awaiting formal referral. It must pass through committees, the Plenary and the Senate, and receive presidential sanction before any changes occur.
The vertical in question is nonetheless significant. Online casino operations are estimated to account for roughly half of the revenue in Brazil’s regulated online market. For operators that built their entry into Brazil around a two-vertical model, the exposure is real and concentrated. No serious advisory body should dismiss this as mere noise.
Nor should any serious advisory body confuse legislative volume with legislative traction. More than 200 bills related to the betting framework have been introduced since the market opened. Only three have gained traction. The distinction between a bill that merely exists and one that is moving forward is the crux of the analysis. That assessment is not made by counting filings, but by tracking referrals to committees, the appointment of rapporteurs, the Plenary agenda and the arithmetic of an election year – a time when legislative capacity is scarce and attention is focused elsewhere.
I offer no judgment on whether the bill should be approved. That is a matter for Brazilian lawmakers, and the sector is ill-served by foreign consultants who confuse analysis with advocacy. What I offer is the insight an operator gains after navigating enough cycles in enough jurisdictions: the fate of a single bill is rarely the deciding factor in whether a market is investable.
The variable that determines the outcome
Europe has run this experiment three times over the past eight years, and the results are instructive precisely because they differ.
Italy imposed a broad ban on gambling advertising and sponsorship via the 2018 “Dignity Decree”. Sponsorship restrictions took effect in January 2019 and the industry predicted a collapse. It did not happen; the licensed market continued to operate.
What occurred was that the ban applied equally to licensed and unlicensed operators, meaning only the licensed ones complied. Seven years later, the Italian Senate’s Culture Committee formally asked the government to review the measure. The argument is that a uniform regime imposed on both regulated operators and the illegal market produced the very migration it sought to prevent. Rome is now considering a partial repeal.
Spain took a different path with Royal Decree 958/2020. Instead of a ban, it restricted advertising to a narrow late-night window, with implementation phased between November 2020 and August 2021. Peer-reviewed analysis of the regulator’s own data identified a lasting reduction in new accounts and total betting volume. The measure achieved its goal, and the licensed market absorbed it.
Germany serves as a cautionary tale. The 2021 Interstate Treaty legalised online slots and poker nationwide for the first time. It then subjected them to a maximum bet of €1 per spin, a minimum spin duration of five seconds and a monthly deposit cap of €1,000 across all licensed operators.
Four years later, the channelisation rate for online slots is below 40% – compared to a European average of nearly 80% – with industry estimates even lower. Furthermore, unlicensed operators are expected to offer a catalogue several times larger than that of the legal market. A statutory review of the framework is due at the end of this year.
Good or bad restriction?
Taken together, the three cases point to a single conclusion, and it is not that restriction is inherently good or bad. Rather, it is that restriction binds only those within its scope.
Whether it protects the bettor or merely shifts the activity elsewhere depends entirely on the state’s ability to reach illegal operators. Restriction and enforcement form a single system; a jurisdiction that pursues one without the other ends up with a result no one intended.
Restriction and enforcement are a single system
Brazil’s position in this regard is more solid than its critics admit, yet less consolidated than its enforcement statistics suggest.
Some 85 licensed operators run nearly 190 brands under federal authorisation. The SPA has blocked thousands of unauthorised domains in collaboration with Anatel (Brazil’s National Telecommunications Agency). It has prohibited financial institutions from processing payments for unauthorised operators and has targeted illegal advertising on various platforms.
This constitutes a genuine enforcement apparatus, built rapidly from the ground up. Counterbalancing these are the documented rise in VPN usage during the first quarter of this year and the proposal to require app stores to remove unlicensed applications. This highlights that the regulatory perimeter is porous, and that the SPA is aware of it.
The question I would put to anybody evaluating Brazil is not whether Bill 2,258/2026 will pass. Rather, it is whether any substantive restriction will be accompanied by enforcement capable of keeping bettors within the regulatory perimeter, should it be enacted. The answer determines whether the restriction consolidates the licensed market or shifts its revenue to operators that pay no taxes, maintain no responsible gaming programmes and answer to no one.
The other half of the board
This year in Brasília, there is an asymmetry that few outside the country have noticed. While the executive branch is pushing to remove a segment of the regulated market, the Federal Supreme Court is examining whether the 1946 decree-law that banned games of chance was incorporated into the 1988 Constitution.
One branch of government is moving towards restricting the digital market; another is examining the legal basis for the ban on the physical market. And Bill 2,234/2022 continues to make its way through the Senate amid all of this.
I have already written that decriminalisation is not the same as legalisation, and this point holds true regardless of the court’s decision. The removal of a criminal penalty does not create licences, does not set taxes, does not establish certification standards and does not build enforcement capacity. Between the absence of a prohibition and the existence of a market lies an entire regulatory framework, and only Congress can establish it.
For investors, the key is to read the entire board, not just one square. Investors who view Brazil solely through the lens of online gambling misprice a market in which the brick-and-mortar segment may open up according to its own legislative timeline. In this case, the operators best positioned for this opening will be those who used the restrictive cycle to build relationships, a track record of compliance and local capacity, rather than waiting for clarity.
What this requires of operators
Three things, and none of them are dramatic.
First, scenario planning that is truly scenario-based. Most of the capital plans for Brazil that I have reviewed were built around a single trajectory, with sensitivity analysis applied only at the margins. A market in an election year – with three active legislative fronts and a constitutional issue before the court – demands plans capable of withstanding multiple outcomes. This extends to product mix strategies that do not assume the current balance between business verticals will remain static.
Second, engagement with the institutional process, not just the political one. Public Consultation No. 3/2026 closes on 9 September. Pariente Advisory will submit its contribution within the deadline. Operators who participate in shaping the regulatory framework gain something no amount of lobbying can buy: the status of being integral to the framework itself, rather than merely objects of it. Regulators remember who showed up while the rules were being written.
Third, treating a compliance-oriented stance as a form of protection rather than a cost. In every restrictive cycle I have worked through, the operators who emerged with increased market share were not the ones who fought the hardest. They were the ones whose responsible gaming programmes, advertising discipline and reporting standards already exceeded the requirements of the new rules. When a government seeks evidence that the licensed market is trustworthy, embodying that evidence is worth more than any argument.
Investability, once again
I said in São Paulo, at the launch of the Brazilian edition of GAT (with support from World Gaming), that legalisation was the milestone and investability is the prerequisite. The events of the past three weeks have been the first serious test of that distinction.
No jurisdiction is permanently friendly to this sector. Nevada tightened regulations before professionalising. Macau has gone through cycles that emptied it out and filled it up again. Italy, Spain, Germany and half a dozen other jurisdictions imposed restrictions that were predicted to be terminal.
The results ranged from negligible to severe, depending on a single variable. What distinguishes a market that capital can back from one it cannot is not the absence of political risk. It is whether institutions keep functioning while politics runs its course, whether consultations remain open, rules continue to be drafted, licences keep being issued and oversight remains effective.
By this measure – and based solely on evidence from the last three weeks – the takeaway is that the institutions surrounding gaming in Brazil will move forward remorselessly. Politics, however, is a different matter. Political attention will ebb and recede according to the election cycles as it always does and I offer no forecast regarding that.
But any investor who mistakes the noise of the latter for the failure of the former will misprice this market. And, judging by the history of all comparable cycles I have observed, they will regret it.