Will Lula’s gambling ban sway Brazil’s election?

President Luiz Inácio Lula da Silva and his allies have been levelling threats at Brazil’s gambling industry for almost as long as its regulatory regime has existed, but the sudden move to entirely ban online gambling in the country through a provisional measure has nonetheless caused dismay and disorder across the sector. 

Lula signed the order on 25 September. It took effect immediately but will expire within 60 days unless approved by Congress within that time, with the possibility of a further 60-day extension. Operators have expressed their intentions to challenge the order through legal routes, with trade bodies already bringing action to the Supreme Court. 

Needless to say, the ban comes with dire consequences. Brazil’s regulated market is, or was, worth approximately $7.7 billion according to H2 Gambling Capital data. The sector is estimated to employ approximately 15,000 people directly and indirectly, and government data shows it generated $1.87 billion in federal tax revenue from January through to August this year. Brazilian football clubs have also been vocal about the effect lost gambling sponsorship revenue will have on the country’s league and scene. 

“From a business perspective, this puts Brazil in a bit of a bad light because when there is no certainty, the businesses are not going to flow in,” Blokotech co-founder Alberto Alfieri tells iGB. “There was not much thinking about the consequences.” 

The gambling ban has been widely interpreted inside the industry as a cynically populist move to court voters in the crucial final days in a tight presidential election campaign between President Lula and his political opponent Flávio Bolsonaro. 

“I think it’s a bit of a political move by the president with nine days to the election,” adds Alejandro Navarro, founder of Panama-based operator Betski. 

Bruno Centurion, a partner at Brazilian political analysis firm Fatto Inteligência Política, tells iGB that it is slightly more complicated than that. “The measure by itself is not populist, but the timing of the measure is completely populist.” 

He points out that such a measure has been in discussion within Brazilian politics for years, is underpinned by genuine (if highly contested) arguments, and enjoys public support. But Lula’s decision to pull the trigger just one week before the election, he says, is certainly designed to maximise short-term political gain.

Gambling ban proves popular domestically

The ban may have been a political gambit, but it was not a blind bet. Public support for banning gambling appears to be high in Brazil.  

Research conducted by AtlasIntel and Bloomberg shortly before the ban was announced by Lula found that 75% of the public agreed with banning gambling while only 17% supported legalisation. An overwhelming 88.5% believed legalised gambling to be harmful to society, the research found.  

Post-announcement, in the context of the polarised race between Lula and Bolsonaro, support for Lula’s ban was slightly weaker but still substantial. Surveying conducted by polling firm Quaest after the provisional order was published found 62% of Brazilians supported the gambling ban, compared to 38% who disagreed with it.  

Of those figures, 40% had heard about the ban and supported it while 22% had not heard of it but supported it; meanwhile, 28% had heard about the ban and disagreed with it, while 10% had not heard the news but disagreed with it. 

That being said, AtlasIntel’s research also found 36% of people placed responsibility for the spread of gambling in Brazil on Lula, while only 25% saw Bolsonaro as responsible and 16% saw the National Congress as responsible. 

Women, Catholics, low-income voters are target demographic

Bruno Centurion says the ban must be understood within the broader context of the wider package of policy proposals by Lula in recent weeks, which include a landmark 15% increase in the value of the Bolsa Família family welfare benefit, free obesity jabs and other promises.  

The popularity of Lula’s government has been heavily impacted by the cost of living, and while gambling cannot be fully blamed for that, it is viewed within the country as having absorbed the spending power of many households. 

Taken together, the measures may make a compelling case that Lula is tackling the cost of living. “When you put all these measures in a basket, it can change the vote,” he says. “Or maybe not change the vote, but it’s going to make some undecided people decide.” 

The Quaest poll appears to back up Centurion’s theory. In an X thread Quaest director Felipe Nunes said the increase in Lula’s polling numbers among women, low-income voters and welfare benefit recipients appears to be associated with the package of measures the government announced in recent weeks. 

Quaest’s data showed support for the gambling ban among women, Catholics and low-income voters in particular, although higher-income voters also surprisingly backed the ban. 

More broadly, recent policy pledges have also achieved a subtler goal for Lula. News coverage in recent weeks had been defined by largely negative coverage for Lula’s government around corruption and the economy.  

“A lot of small [anti-Lula] things were coming together and making the front main page of the news,” Centurion explains. “We have the news talking about negative stuff about Brazil, the system, the corruption and things directly related to the president, even if it’s not the president’s fault.” 

The gambling ban, and other electoral promises, have acted to flip the media narrative in Lula’s favour by moving the conversation on to popular policy announcements.

Has the gambling ban affected the presidential election race?

Polls conducted after the ban announcement show Lula with a slight lead or statistically tied in a second-round runoff election with Bolsonaro. Lula leads comfortably in first-round election projections but is neck and neck with Bolsonaro in a widely anticipated head-to-head runoff. 

Compared to before the announcement, recent polling numbers appear to show a slight improvement in Lula’s performance. 

However, Centurion notes that, with such a stark contrast in visions for the country offered by the two candidates, it is difficult to distil the impact of any one policy announcement on its own. “I don’t think it is this decision that’s going to be the main factor for people to change or decide their votes – but it is part of the decision,” he says. 

Taken together with Lula’s other recent measures, it may be proving effective among voters. Most importantly, it is appealing to the key demographics that both candidates need to win – women (particularly poorer women) and religious voters, in the south east (covering populous regions like São Paulo and Rio de Janeiro). 

However, whether Lula will face any negative backlash from people affected by the ban remains to be seen. 15,000 jobs is a lot of angry voters, and nearly $2 billion in tax revenue will make for a lot of angry budget balancers – but Brazil is a big and populous country. 

Prediction markets still favour Bolsonaro

Prediction markets, meanwhile, put Bolsonaro firmly in front. Initial figures showed little to no impact on probabilities around the time of the ban, although Lula’s chances have risen slightly on major platforms since his polling has improved. 

As of 2 October, Polymarket and Kalshi markets for presidential election winners give Bolsonaro a 58% and 59% chance respectively of winning, compared to 38% and 39% for Lula. 

But Centurion cautions not to read too far into the prediction markets’ current forecasts. He says prediction markets – which are illegal and blocked within the country – are not as prominent in Brazil and the markets tend to be dominated by financial firms who have their own biases. 

He personally puts the election outcome odds at 55%-45% in Lula’s favour, although he said he wouldn’t be surprised by any outcome. 

Bolsonaro seen as more gambling-friendly

An outcome where Bolsonaro wins the presidency is viewed as more favourable to industry than a Lula win. Experts told iGB in March that a right-wing government in Brazil would be preferred by operators. 

Indeed, in response to Lula’s provisional order Bolsonaro labelled the measure “populist, hypocritical and politically motivated” at a campaign rally, Reuters reported.

“Flavio Bolsonaro is going to be more permissive,” says Centurion – although a Bolsonaro win does not necessarily give the all-clear for re-legalisation. 

Former BBC LatAm correspondent Andrew Thompson also told iGB in March that the evangelical community, which has close ties to conservative politicians, poses complications for a right-wing government given its staunch anti-gambling position. 

What happens next?

Centurion predicts that a Lula win would see a strong fight against full re-legalisation by the left-wing leader. 

“Lula is going to fight against any kind of legalisation, but he is going to be open to listening to problems from the industry, especially regarding jobs, [especially because] the economy ministry is really concerned about the taxes,” he adds. 

Meanwhile, under Bolsonaro, it would depend more on the outcome of the Congressional election.  

With either candidate, the industry should expect a tough fight ahead, especially to return to the status quo ante of full legalisation. Going forward we may see advertising restrictions or bans, or potentially see betting permitted but casino banned, Centurion says. 

Whatever happens, even if we see a full reversal, many believe irrevocable damage has been done that will affect trust in Brazil’s gambling industry and business sector more broadly. 

“You pay $5 million for a licence for a five-year term, and you expect to be able to operate and get the ROI on that, and a president can come from one day to another and make a decision like this,” Betski’s Alejandro Navarro reflects. “I think it’s got to have a big impact.” 

Jake Nordland

Jake is an experienced trade journalist with a background in the video game, esports & gambling industries. He covers emerging trends in the global gaming industry, mostly compliance, regulation, and tech topics.

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