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A Shot in the Foot? Illegal Gambling Surges in Brazil Amid Betting Ban

By jili tutorial · October 9, 2026

A Shot in the Foot? Illegal Gambling Surges in Brazil Amid Betting Ban

Introduction

Brazil’s online gambling industry has been thrown into turmoil following President Lula da Silva’s recent ban on online betting. While the ban aims to curb gambling-related harms, early data suggests it may be achieving the opposite effect: driving Brazilians toward unlicensed and offshore platforms, where consumer protections are minimal, and risks of addiction and fraud are heightened.

The Immediate Impact of Lula’s Ban

Rapid Rise in Unlicensed Betting Sites

On September 26, President Lula confirmed the ban on online gambling, just nine days ahead of the first round of the presidential election. According to BetLegal, a platform maintained by the National Association of Games and Lottery (ANJL), 575 unauthorized betting sites were identified on the same day—a staggering 74% increase from the 311 sites registered just 24 hours earlier. This spike highlights how quickly illegal operators have capitalized on the ban.

Migration to Offshore Platforms

Recent data from Blask, a betting industry analytics provider, shows that Brazilians are increasingly turning to offshore .com platforms. While some users withdrew funds from legal accounts within the government-imposed deadline (October 5), others shifted their activities to unregulated sites. This migration, though not yet overwhelming, has been steady and poses significant risks to consumers.

Why the Ban May Backfire

Industry Perspectives

Albert Simehnson, Deputy CEO of Super Technologies (the parent company of Brazil’s leading betting brand, Superbet), voiced his concerns at the SBC Summit in Lisbon. He argued that the ban “does not reduce betting or gambling harm” but merely shifts activity to unregulated platforms where users face “greater risk of addiction and fewer protections.” This sentiment is shared by executives from Allwyn Digital, Flutter Entertainment, and Betsson, who warn that the black market will thrive at the expense of consumer safety.

Data-Driven Insights

Blask’s research underscores this shift. In the week following the ban, visits to licensed Brazilian betting sites (those with the bet.br domain) plummeted by 74%, while search demand for licensed operators fell by 82%-83%. In contrast, activity on unlicensed sites remained robust. Search demand for unlicensed firms dropped by just 7%, and their share of branded search queries rose from 4% to 16%. Additionally, activity per visitor on unlicensed sites increased by 40%, indicating heightened engagement.

Context: The Road to the Ban

Political and Legislative Moves

President Lula’s betting ban is the culmination of a broader crackdown on the gambling sector. While a ban on online casinos was widely anticipated, Lula opted for a comprehensive prohibition, influenced by Sidônio Palmeira, Minister for Social Communication and a key figure in his 2022 presidential campaign. This move aligns with Lula’s broader agenda to address social issues, but its implementation—rushed ahead of the October 4 election—has been criticized for lacking foresight.

Parallels with India

Blask draws a striking parallel between Brazil’s situation and India’s experience last year. Following India’s ban on real-money gaming, regulated domestic operators saw a 73% drop in reach within three months. However, 63% of Indian players continued betting, primarily through unlicensed firms. Brazil’s decline has been more rapid, with regulated gaming reach falling by 74% in just one week, likely due to the tight deadlines imposed by Lula’s order.

The Future of Brazil’s Betting Market

Projections and Risks

Blask predicts that 21 million of Brazil’s 25.2 million legal bettors will continue gambling through unlicensed sites. Krasimir Spajic, CEO of Allwyn Digital, warns that banning gambling does “not make it disappear” but merely drives it underground. Unregulated operators do not pay taxes, adhere to responsible gaming measures, or protect consumers, creating a lose-lose scenario for both the government and citizens.

Despite the ban, some major operators remain hopeful. The policy faces debate in the Supreme Court, Congress, and among voters, particularly as Brazil prepares for a presidential run-off on October 25. Albert Simehnson expressed optimism that the process could yield “a different outcome,” potentially preserving regulated gambling while addressing its harms.

Conclusion: A Cautionary Tale

President Lula’s gambling ban illustrates the unintended consequences of well-intentioned but hastily implemented policies. By driving Brazilians toward unregulated platforms, the ban has undermined consumer protections and created fertile ground for illegal operators. As the debate continues, the focus should shift toward comprehensive regulation rather than outright prohibition—a strategy that balances revenue generation with harm reduction.