Brazil betting ban raises alarm across LatAm
Industry figures and legal experts from six countries warn that Provisional Measure 1.394/2026 could undermine investor confidence and strengthen illegal operators.
Key takeaways:
- Industry representatives and experts from Brazil, Mexico, Colombia, Chile, Peru and Uruguay warn that President Lula’s decision to ban fixed-odds betting and online casinos through Provisional Measure 1.394/2026 could weaken investor confidence and regulatory predictability across Latin America.
- Several contributors argue that a ban could shift demand to illegal operators, where age checks, spending limits, player-protection tools and fraud prevention may be weaker or absent.
- Bárbara Teles of ABC-BET and AMIG says the abrupt abolition of an authorised activity could lead to discussions over reimbursement and potential compensation claims, depending on the circumstances of each case.
- Contributors argue that sustainable regulated markets require clear rules, independent regulators, effective controls, responsible gambling policies and protection against short-term political change.
Special report – Brazil’s move to ban fixed-odds betting and online casinos through Provisional Measure 1.394/2026 has reignited concerns over regulatory stability across Latin America. In a special report by Focus Gaming News, industry representatives and experts from Brazil, Mexico, Colombia, Chile, Peru and Uruguay assess the potential consequences for investment, player protection and the illegal market. While their views differ, several agree that the region needs predictable frameworks, effective oversight and responsible gambling policies capable of surviving political change.
Legal certainty: the impact of changing the rules
One of the main criticisms of the Brazilian decision relates to the confidence of companies that have invested in order to comply with regulatory requirements. The disruption of a recently formalised market raises questions about the stability of the rules and the guarantees operators receive when they obtain a state licence.
Bárbara Teles, director of government relations at the Associação Brasileira de Conformidade, Boas Práticas, Ética e Transparência em Apostas (ABC-BET) and founder and director of the Associação de Mulheres da Indústria do Gaming (AMIG), believes that the measure represents a significant institutional shift.
“We are talking about a legalised, regulated activity, subject to a complex and costly authorisation process,” says Teles. In her view, the problem does not lie in the state reviewing its policies, but in it replacing, within a very short period, a detailed regulatory system with a virtually total ban.
The Brazilian representative also warns of the legal consequences for companies that paid for licences, recruited staff, developed local infrastructure and invested in technology and certifications to comply with the regulations. Among the principles she considers relevant to the debate, she mentions legal certainty, legitimate expectations, good faith and proportionality.
Teles explains that a licence does not constitute an acquired right to the legislation remaining unchanged. However, she draws a distinction between gradual reform and the abrupt abolition of an activity authorised by the state itself. In the latter scenario, she points out, discussions could arise regarding the reimbursement of payments and potential claims for compensation, the validity of which will depend on the circumstances of each individual case.
From Mexico, Dr Miguel Ángel Ochoa Sánchez, chief executive of the Asociación de Permisionarios, Operadores y Proveedores de la Industria del Entretenimiento y Juego de Apuesta en México (AIEJA), also questions the impact of the decision on the image of LatAm markets.
Although he believes the Brazilian case could be seen as an isolated episode, he warns that it contributes to projecting an image of instability. “Any investment requires long-term legal certainty. Especially when the sums involved and the necessary infrastructure are substantial,” he argues.
For Ochoa Sánchez, governments must understand the economic importance of the industry and develop public policies that transcend electoral cycles. Otherwise, he warns, countries run the risk of encouraging illegal activity and losing tax revenue that could be channelled into public services.
In Colombia, Tatiana María Vásquez, a lawyer specialising in gambling regulation and a partner at Vásquez & Asociados, also sees what has happened as a warning sign for the region.
“My main concern is the consistency of the response,” she explains. In her view, if there are problems relating to debt, public health or the protection of vulnerable people, the state must intervene, but such intervention should identify the specific shortcomings and assess why a blanket ban would be more effective than rectifying them within the regulated system.
Vásquez links this discussion to the Colombian experience, where tax changes also put pressure on operators’ financial circumstances. Whilst she acknowledges that altering tax burdens and banning an activity are different legal situations, she considers that both illustrate the importance of maintaining consistency between the decision to regulate and the conditions imposed for operating.
“A policy that promotes formalisation loses its coherence if other measures end up making it increasingly difficult to remain within it,” she warns.
The risk of encouraging the black market
The possibility of players migrating to unauthorised platforms is another key focus of the debate. The question is whether eliminating the regulated market helps to reduce the harms associated with gambling or whether, on the contrary, it weakens the mechanisms the state uses to control the activity.
Ochoa Sánchez argues that prohibition encourages the illegal market and capital flight. “It’s no secret: prohibition, whether of any product or service, always encourages the illegal market and capital flight. And where there is illegality, there is a lack of protection for the consumer,” he says adding: “AIEJA maintains the position that strengthening the industry requires a tailored legal framework, one that combines clear and firm rules with sufficient flexibility so that players can find greater benefits by turning to a legal operator.” He also believes that the Brazilian experience should serve as a warning to Mexico, where the sector is calling for more modern legislation.
Carlos Fonseca, managing partner of Gaming Law SAC and managing partner of Gaming Law LatAm – firms specialising in legal advice for the online gaming and betting industry – offers an even more forceful critique of the social justification for the measure. “Banning legal supply does not eliminate demand: it simply shifts it to the black market,” the Peruvian specialist says.
According to Fonseca, this shift could have consequences for various stakeholders. The state loses tax revenue, workers face the risk of job losses, and users may be left without effective mechanisms to lodge complaints. Furthermore, he warns that minors and people with gambling problems could be exposed to operators with no incentive to apply controls or restrictions.
From Uruguay, Luis Gama, executive secretary of the Cámara Uruguaya de Operadores y Administradores de Salas de Entretenimiento y Casinos (CUOASEC), offers a perspective that focuses on both the risks and the objectives of social protection.
Gama believes that a ban may reduce exposure to gambling within the regulated market, but warns that a significant proportion of demand could shift to illegal operators, where there are no equivalent age checks, spending limits, player protection mechanisms or fraud prevention tools.
In such a scenario, he points out, a policy designed to protect consumers could end up leaving them more vulnerable. “Rather than being an isolated case, this should serve as a warning to the regional industry about the importance of regulatory stability, compliance and responsible gambling policies,” Gama says.
In the Uruguayan representative’s view, the Brazilian case does not necessarily prove that there will be a wave of bans across Latin America. However, it does serve as a warning of the need for the industry to strengthen regulatory compliance and responsible gambling policies, and to demonstrate in concrete terms the social benefits of regulation.
The case of Chile
The Chilean experience adds another point to consider to the discussion: the difference between cracking down on an activity operating outside current legislation and eliminating a service already authorised by the state. Cecilia Valdés, chief executive of the Asociación Chilena de Casinos de Juego (ACCJ), believes that the situation in Brazil is causing uncertainty as operators had paid for licences and made investments based on an established legal framework.
However, her analysis focuses on the authorities’ obligation to respect the rules they themselves establish, regardless of whether the outcome is the prohibition or regulation of an activity. “The distinction must be drawn, first and foremost, on the basis of the law in force,” Valdés says.
The leader maintains that, whilst unauthorised online gambling remains outside the Chilean legal framework, it should be prosecuted using the tools available. However, if the legislature decides to authorise this activity under certain conditions, the state must ensure compliance with the new framework and protect those who have legitimately obtained a licence.
“That is why the debate should not be framed as a choice between ‘combating the illegal market’ or ‘eliminating an activity’. The fundamental question is what the law stipulates and how compliance with it can be effectively ensured,” she explains.
Valdés also emphasises that regulation cannot be limited to establishing who is authorised to operate and how much they must pay. It must incorporate measures to protect users, prevent problem gambling, protect minors, ensure responsible advertising, trace the flow of funds and prevent money laundering.
For the chief executive of the ACCJ, the Brazilian experience demonstrates that legal certainty must be accompanied by sufficiently robust controls to prevent the negative externalities of the activity. Otherwise, the very legitimacy of the system may be compromised.
The regional dimension: government policies and institutional continuity
Beyond the immediate consequences for Brazil, those interviewed agree that President Lula’s decision calls for a review of how regulated markets are established and sustained in LatAm.
For Teles, the main lesson is that regulation should not be viewed as a transitional phase prior to a possible ban. On the contrary, she believes that issues such as advertising, indebtedness and the protection of vulnerable people must be addressed through evidence-based approaches, oversight and proportionate policies.
The executive also emphasises that the Brazilian decision may influence how other governments and investors assess their own regulatory frameworks. If an authorised and supervised market can be shut down in such a short space of time, she argues, companies might question the predictability of investment conditions not only in the gambling sector, but also in other sectors.
Vásquez agrees that regulation requires an institutional framework capable of outlasting a single government. To this end, she proposes assessing the impact of reforms before implementing them, coordinating the relevant authorities and maintaining permanent channels of engagement between the public sector and industry stakeholders.
She also highlights the importance of using data to demonstrate the results of player protection measures and of explaining which control mechanisms may be lost if demand shifts towards illegal platforms.
Gama, for his part, believes that Latin American markets need clear and predictable rules, independent regulatory authorities, transparent mechanisms for participation and review, effective controls on problem gambling and advertising, and a firm policy against illegal gambling. “Regulation alone is not enough: we must build a system that is sustainable over time and capable of withstanding political changes,” he summarises.
The CUOASEC representative maintains that social legitimacy must be built by demonstrating that regulation generates tangible benefits for the state and protects consumers. Without such results, he warns, any change in government or in the social climate could call the model into question.
Fonseca believes that stability requires a solid legal foundation and effective mechanisms for institutional oversight. In his view, the higher the hierarchy of the rules underpinning an activity, the greater its protection against short-term political decisions. The expert also advocates for an independent constitutional court capable of safeguarding legal guarantees. “There is little point in having clear rules if the political authorities can disregard them without any effective oversight,” he argues.
“Legal certainty is one of the key values that left-wing Latin American governments often sacrifice in the interests of their political agendas. It is as clear and simple as that. Regulating an activity, attracting investment and then seeking to ban it sends a message of utter mistrust,” Fonseca concludes.
Ochoa Sánchez rounds off this perspective with a call for industry representatives to collaborate with governments in designing long-term policies that enable investment planning and sustain a regulatory framework beyond the immediate electoral cycle.
