Brazil Attorney General urges Supreme Court to uphold betting ban and hold public hearing

Brazil’s Attorney General’s Office (AGU) has asked the Supreme Federal Court (STF) to reject the preliminary injunctions filed in the context of the Direct Actions of Unconstitutionality (ADIs) currently under review by Justice Luiz Fux and maintain the prohibition of betting.

The rapporteur had requested a statement from the AGU regarding the ban on betting that was introduced by Lula through a provisional measure in late September.

The agency also argued that the prosecutor general of Brazil should be heard within 72 hours before Fux decides on the sector’s requests to overturn the measure.

The AGU responded to a lawsuit filed with the STF by the National Association of Games and Lotteries (ANJL) and the Brazilian Institute for Responsible Gaming (IBJR), which are seeking to overturn the ban.

According to the AGU, the legislation governing betting has proven to be “extensively flawed”, with difficulties in protecting children and adolescents as well as preventing money laundering and the financing of crime.

However, the AGU did not take into account the measures taken by the sector to curb such practices. These harmful actions are taken by illegal websites that fail tot comply with the regulations.

Attempt to delay the decision until after the election

Furthermore, the AGU requested a new public hearing to update the debate held in November 2024.

The ban on betting was implemented just over a week before the first round of Brazil’s presidential election, with the move criticised as an electioneering tactic.

The call for another public hearing will likely further fuel that criticism. If the issue were relevant enough to warrant debate, questions will be raised over whether President Lula should have made the hasty decision to shut down the sector.

By requesting that the attorney general be heard and that a hearing be scheduled, the sector will remain paralysed, losing revenue and not generating tax income for the government.

More importantly for Lula, the postponement of a decision by Fux that could be favourable to the betting industry will be delayed until after the second round of elections. These are scheduled for 25 October after the incumbent Brazilian President Lula and Liberal Party leader Flávio Bolsonaro progressed to a second-round runoff over the weekend.

The AGU’s request that attempts to suspend the provisional measure be rejected include preserving the activity of authorised companies or extending the transition period by at least six months.

Meanwhile, the ANJL and IBJR claim the disruption violates legal certainty and could drive bettors to the black market.

Objection from the AGU

In its statement, the AGU disputed the claims that there was no urgency for issuing the provisional measure and that the government had not considered the economic impacts of the ban.

The AGU stated the change was based on the government’s experience after implementing the regulation and on impacts related to household debt and health. These are arguments presented by the federal government to the STF, and not conclusions of the court.

Organisations claimed that the ban on betting compromises revenue collection and the allocation of resources for public policies. According to the AGU, the government took into account the reduction in revenue resulting from the end of betting.

The AGU also disputed that the ban would drive bettors to clandestine websites. According to the agency, in the first week since the enactment of the provisional measure, 10,435 illegal websites were blocked. Requests were also made to remove more than 3,000 pages, profiles, channels and groups.

It did not address the thousands of other websites created after the provisional measure. It only stated that the 18,195 websites identified by ANJL were not necessarily created with the enactment of the provisional measure.

Regarding the issue of the offence against free enterprise and the legal uncertainty caused by the provisional measure, the AGU stated the operation was carried out through authorisation granted according to the convenience and opportunity of the Ministry of Finance, and that it would be subject to review at any time.