Brazil’s Lula moves on gambling and household debt as election nears

Brazilian President Luiz Inácio Lula da Silva announced a nationwide ban on online betting on Friday and unveiled a separate programme to restructure heavily delinquent household debt, adding two major economic measures to his agenda ahead of the October 4 presidential election.

Opinion polling has shown Lula in a closely contested race with right-wing Senator Flavio Bolsonaro, the eldest son of former President Jair Bolsonaro.

Lula’s executive order immediately prohibits online betting operations, less than two years after his government established a legal framework for the industry. The measure must be approved by Congress within 120 days to remain in force.

The government has increasingly voiced concern that gambling is placing additional pressure on household finances and contributing to record indebtedness. Recent surveys cited by the government showed that about three-quarters of Brazilians support a complete ban.

“We are facing a public health issue involving online betting. It is a serious problem,” Finance Minister Dario Durigan said during the announcement.

Durigan said betting websites would remain accessible until October 5 so users could withdraw any remaining funds. App stores and internet providers will be required to block the sites from October 6.

Flavio Bolsonaro, speaking at a campaign rally in Rio de Janeiro, described the ban as “populist, hypocritical and politically motivated”.

Online betting was legalized in Brazil in 2018 under President Michel Temer, although the sector remained largely unregulated during Jair Bolsonaro’s presidency. Lula signed legislation in 2023 creating a regulatory framework and explicitly authorizing online casino games alongside sports betting. Licensed operators have been permitted to operate nationwide since January 2025 after paying concession fees and meeting regulatory requirements.

Officials have argued that gambling losses have contributed to dissatisfaction with the economy despite record-low unemployment and relatively subdued inflation.

The Finance Ministry estimates that Brazilian households spend about 60 billion reais ($11.57 billion) a year on online betting, generating roughly 10 billion reais in tax revenue. JPMorgan identified Evolution as one of the listed companies most exposed to Brazil, with about 9% of its sales coming from the country, while Allwyn’s Betano business contributes 6% to 7% of EBITDA. Entain and Flutter are also among the companies identified.

ANJL, the association representing Brazil’s betting sector, said the ban could push more than 30 million gamblers toward illegal websites and argued that it disregards investments made to comply with the law.

Lula also announced a new programme to reduce the burden of household debt, months after the relaunch of the federally backed consumer debt renegotiation initiative known as “Desenrola”, first introduced in 2023.

Under the new scheme, the government plans to hold an auction in November to purchase and restructure delinquent household loans. It will spend 15 billion reais to acquire up to 150 billion reais of overdue debt at discounts of at least 90%. The programme is expected to cover about half of the eligible debt stock.

Borrowers would then be able to settle overdue obligations at the discounted value, with the full benefit of the reduction passed on to them. The scheme targets debts overdue for between two and 4.5 years, mainly credit-card balances and unsecured personal loans. Planning Minister Bruno Moretti said the auction would cover debts of up to 10,000 reais.

“This is a better Desenrola than the previous versions,” Lula said. “In the earlier Desenrola, people had to approach banks individually. Now the government will purchase the debt and settle it on behalf of borrowers.”

The government had already announced the debt initiative last week as part of Lula’s election-year economic agenda.

By Tamilla Hasanova