Brazil has shocked the iGaming industry by announcing a ban on online casinos and sports betting. On September 25, President Luiz Inácio Lula da Silva signed a provisional measure prohibiting online gambling nationwide. The decision marks a dramatic reversal for a recently regulated market, leaving licensed operators and their partners facing an abrupt end to their Brazilian operations.
But will the ban convince Brazilian players to stop gambling, or drive them toward the black market? Could a measure intended to protect consumers ultimately push some of them into a less regulated (and potentially more risky) environment?
Licensed operators must shut down their platforms by October 6, 2026, and return players’ funds. Noncompliance with refund and reporting obligations can result in daily fines of R$200,000 or about US$35,800. The government has also proposed prison sentences of four to six years for illegal betting operations. However, the ban may not be permanent. Congress has up to 120 days to approve, amend, or reject the provisional measure, while affected businesses may challenge it in court. Until then, operators must comply with the shutdown requirements.
Some players, particularly occasional bettors, may stop gambling when they lose access to familiar apps and casino or sports betting websites. However, regular gamblers may be more willing to seek alternatives, especially when illegal platforms remain accessible.
According to the Fora do Radar 2.0 study, unlicensed platforms accounted for an estimated 38–44% of total wagering in Brazil in the first half of 2026, down from 41–51% in 2025.
International research suggests that restricting legal gambling doesn’t necessarily mean players will stop. A 2024 Dutch study found that 37% of online gamblers would look for another provider if their usual one became unavailable, rising to 47% among at-risk players. Meanwhile, a Swiss study found that only 12.1% of a small group of excluded gamblers stopped altogether, while approximately 30% used unlicensed platforms. Although these findings can’t predict what will happen in Brazil, they highlight the risk of players moving to the black market.
Unlicensed casinos can attract players with higher RTPs, fewer restrictions (such as no KYC), a wider variety of games, and faster withdrawals. Without the same tax and compliance obligations as regulated operators, they may have more flexibility to offer competitive products and bonuses. For players accustomed to these benefits, the closure of licensed platforms may encourage them to seek alternatives.
Trust also plays a role. Some established offshore and crypto casinos have built their reputations around reliable payouts, with players sharing their experiences through online communities. However, a strong reputation is no substitute for regulatory protection. Players may have limited recourse when withdrawals are blocked or disputes arise, and lose access to safeguards such as self-exclusion, responsible gambling tools, and regulatory oversight.
Brazil faces an additional challenge: unlicensed operators may continue serving players through familiar payment methods such as Pix, even as regulated businesses face increasing restrictions. If illegal platforms remain accessible and competitive, shutting down licensed operators could redirect existing demand rather than eliminate it.
If Congress approves it, the success of Brazil’s ban will depend not only on how effectively it shuts down licensed operators but also on what happens to players afterward. If gambling demand remains and illegal platforms continue to operate, the decision could push more players beyond regulatory oversight, exposing them to greater risks. Brazil’s biggest challenge is to ensure that efforts to protect consumers don’t unintentionally strengthen the very market where those protections are absent.