Brazil's Presidential Runoff Puts Gambling Ban's Future in Doubt

Brazil's presidential election is heading to a second-round runoff on 25 October after neither candidate secured a majority in the first round.

Liberal Party leader Flávio Bolsonaro received 47.03% of the vote, compared with incumbent Luiz Inácio Lula da Silva's 45.16%.

The outcome could shape the fate of a provisional ban on licensed online gambling that Lula imposed in late September, which now goes to the National Congress for a decision on making it permanent.

"Public opinion on betting is strongly negative right now, and the evangelical vote carries a lot of weight for both candidates," said Ramiro Atucha, CEO and founder of Atucha Strategic Advisory. "In that context I can only imagine both of them doubling down against the regulated industry, and against online casino in particular, between now and the runoff."

Bolsonaro's Liberal Party won 121 of the 513 seats in the Chamber of Deputies, giving it the largest bloc since 1990.

Atucha argued that a stronger congressional showing by Bolsonaro's party could make it harder for Lula's government to sustain the ban, as lawmakers may take a longer-term view of legal and economic consequences.

"A chamber where the PL has the largest bench since 1990, even if 121 seats is still well short of the 257 needed for a majority on its own, is a chamber with more respect for signed agreements and more awareness of what the lawsuits mean," he said.

Udo Seckelmann, partner at Brazilian law firm Bichara e Motta Advogados, warned that strong opposition would not necessarily translate into a congressional rejection of the measure.

"The first-round result will likely shape the political environment around the debate, but the key point is that the ban is still subject to congressional review and judicial scrutiny," he explained.

Bolsonaro described Lula's ban as "populist, hypocritical and politically motivated", but has himself previously vowed to ban online casino while maintaining sports betting.

Atucha suggested Bolsonaro relies on the evangelical vote as much as Lula does, and that electorate is openly against gambling.

"Of the two, he is the one I see as more sensitive to pre-existing agreements," he said.

Seckelmann said it was difficult to predict the policies of a future administration, which would have to weigh consumer protection against legal certainty, economic investment and tax collection.

Atucha said the ban's timing made it an electoral decision that ignored budgeted tax collection, lawsuits, job losses and club sponsorships.

He warned the disruption could damage investor trust in Brazil's respect for institutions and agreements for years.

"The harder thing to rebuild is the trust of international investors in Brazil’s respect for institutions, for agreements and for licences it granted itself," Atucha said.

Seckelmann similarly warned that sudden policy reversals increase perceived regulatory risk and may affect future investment decisions.