Brazil Sues the 17 Betting Firms It Licensed as Their Sites Go Dark

Brazil’s licensed betting sites are due to go offline on Tuesday, October 6, and the government that licensed them is suing 17 operators for at least R$1 billion in the Federal Court of Pernambuco. The Attorney General’s Office (AGU) filed the case on September 28, three days after Brazil’s betting ban was signed.

The ban didn’t settle Sunday’s election. Senator Flávio Bolsonaro took 47.04% of valid votes to President Luiz Inácio Lula da Silva’s 45.15% with 99.97% of ballot boxes counted, Agência Senado reported, and the two meet in a runoff on October 25. Lula signed the measure nine days before the vote and told the Flow podcast on October 1: “There’s no proof that this got me any votes so far.”

R$1 Billion, Plus the Health Bill

The lawsuit is a civil public action against 17 companies behind 20 betting brands. It asks for a minimum of R$1 billion in collective moral damages, repayment of what the public health system (SUS) has spent on gambling harm, and a double refund of the stakes placed by people diagnosed with gambling disorder. Preliminary Health Ministry studies put the minimum loss to the SUS at R$2.6 billion, the AGU says.

The defendants include Kaizen Gaming Brasil, the company behind Betano, and HS do Brasil, which runs Bet365. Superbet, Sportingbet, Esportes da Sorte, Blaze, Betnacional, Estrelabet, Pixbet, Novibet, Betfair and KTO are on the list too. The AGU says the group covers about 80% of the fixed-odds betting market, and that market share was used to pick the defendants, not to presume they are liable.

The government’s case is that the industry keeps the money and the state pays for the damage. Only 0.12% of operator revenue goes to the Health Ministry, about R$50 million in the last fiscal year. “The defendant companies privatize significant profits from the money collected from millions of bettors, while transferring to the SUS and to society as a whole the budget cost of collective illness,” the AGU argues.

A Judge Asks for the Math

The filing cites 28 million Brazilian bettors, 10.9 million of them showing risky or problem play, and a rise of about 140% in SUS care for pathological gambling between 2018 and 2025. The court wanted more than that. On September 29, Judge Helio Silvio Ourem Campos of the 6th Federal Court of Pernambuco gave the government 30 days to amend its petition and explain “objectively” how the licensed companies caused the losses.

His order asks which health conditions are covered, which spending is being claimed, where the data comes from and how liability would be split between operators by market share. It also tells the AGU to fix a reference to “diseases attributable to cigarettes.” The AGU sued cigarette makers for SUS costs in 2019.

The Brazilian Institute of Responsible Gaming (IBJR), an industry body, said the claim “lacks essential elements” to support R$1 billion. It called the case a contradiction, since the government is going after companies in “a legal activity, authorized and regulated by the Federal Government itself.”

The Government Turns on Its Own Law

The AGU went further on Friday, October 2. In a filing signed by Attorney General Jorge Messias, it asked the Supreme Federal Court (STF) to strike down the core of the 2018 and 2023 laws that created and regulated fixed-odds betting. The request sits in ADI 7749, a case brought by the Prosecutor General’s Office, and it reverses the AGU’s earlier line that the legislation was “still constitutional.”

That same day Minister Luiz Fux, the judge handling the challenges to the ban, gave the AGU 72 hours to respond. That pushed any ruling past the first round. One of those challenges is ADI 8024, in which the association Anseja asks the court to suspend the whole measure. Abert, the broadcasters’ association, filed its own request on September 30, telling the court: “The damage is already under way.”

The operators’ main grievance is money already paid. ANJL, the National Association of Games and Lotteries, told Fux on October 2 that 83 companies paid the federal government R$2.55 billion for 85 five-year licenses. Provisional Measure 1,394 ends them after 30 days and says operators have no right to a refund.

R$1.4 Billion Left as the Clock Runs Out

Players have until 11:59 p.m. on Monday, October 5, to withdraw. Finance Minister Dario Durigan said R$1.4 billion was still in betting accounts on Friday, down from R$2.1 billion before the ban. Banks are due to return whatever is left between October 9-14.

The block was still on the calendar on Monday. Anatel, the telecoms regulator, had ordered 2,387 betting-related sites taken down by September 29 and notified the country’s 21,206 telecom providers. National Public Security Secretary Chico Lucas said Pix transactions fell 10% after the measure was published, citing Central Bank data.

Congress Has 42 Amendments and More Time

A provisional measure lapses unless both houses of Congress approve it within 120 days. Lawmakers have filed 42 amendments, Congress’s page for the measure shows, and the deadline for more was extended to October 13. Four had been withdrawn by October 2, which left 38 in play.

The main proposals would narrow the ban to Slots and other online casino games while keeping sports betting legal. Lula says he doesn’t expect lawmakers to undo it. “I doubt Congress has the courage to end it,” he told Flow.

Congress also runs a self-selecting online poll on the measure, which is no scientific survey. It stood at 481,182 in favor and 80,717 against on Monday morning.