Brazil’s Supreme Court Suspends Cases Challenging Bets Ban

Supreme Court Halts Legal Proceedings Over Betting Ban

Fux’s decision follows a request submitted by the Office of the Prosecutor General (PGR) on Friday (6). Prosecutor General Paulo Gonet argued that lower courts had been granting requests from companies in the sector to resume operations on the grounds that the provisional measure was unconstitutional.

According to the Justice, the simultaneous handling of cases that could result in contradictory rulings could undermine legal certainty. Fux specifically highlighted the impact of potential decisions authorizing the operation of fixed-odds betting activities while the STF has yet to determine the constitutional validity of the ban.

In his ruling, the Justice stated that there is a “risk of legal uncertainty arising from the possibility of multiple decisions reaching conflicting conclusions,” also taking into account the potential authorization of an activity he described as posing a high social risk.

The order is preliminary and must still be submitted for approval by the Supreme Court’s full bench, comprising all of its justices.

Conflicting Court Rulings Prompted PGR Request

The Office of the Prosecutor General’s submission was prompted by court rulings that had been producing different interpretations of how the provisional measure should be applied.

According to Gonet, lower courts intervening before the STF reaches a decision could lead to “asymmetric application of the rule to those subject to it,” creating unequal conditions for companies operating under the same legislation.

One recent case involved a ruling by Federal Appellate Judge Adriana Pileggi de Soveral, of the Federal Regional Court of the 3rd Region (TRF-3), who had authorized the resumption of operations by three betting companies belonging to CDA Gaming.

Subsequently, TRF-3 President and Federal Appellate Judge Luís Antonio Johonsom di Salvo suspended that authorization following a request from the Office of the Attorney General of the Union (AGU).

Supreme Court to Review Brazil’s Betting Ban

The provisional measure banning bets nationwide was issued by President Luiz Inácio Lula da Silva in September. Following its publication, associations linked to the betting market filed legal challenges before the STF to contest the government’s initiative.

The organizations argue that halting an activity that had previously been legalized violates constitutional principles, including legal certainty, free competition and due process. They also question the measure’s interference with the administrative autonomy of Brazil’s states.

The cases were assigned to Justice Luiz Fux, who was already the rapporteur for proceedings related to gambling and the legislation that regulated online betting in Brazil.

Last week, the Justice decided to convene a public hearing to gather information and positions from government representatives, the betting industry and other stakeholders involved in the debate.

Government and Sports Sector Disagree on the Impact of the Ban

During the hearing, government representatives defended the measure as necessary to contain the impact of bets on public health and household finances.

Representatives of the sports sector, meanwhile, warned of potential financial losses, unemployment risks and the growth of the illegal market if regulated betting activities were suspended.

The main point of disagreement concerned the effectiveness of the ban. The government argued that the experience with regulation had demonstrated that oversight and bettor protection mechanisms were insufficient to control the harm associated with betting.

In contrast, critics of the measure maintained that the ban would not eliminate consumer demand and could instead drive bettors toward illegal platforms operating outside official supervisory mechanisms.

Football Clubs Warn of Losses Following Sponsorship Terminations

The economic impact of the ban was also highlighted by football clubs, which expressed concern about the interruption of sponsorship agreements signed with betting companies.

Flamengo estimated annual losses of R$430 million, while Fluminense projected an impact of R$200 million per year.

Vitória outlined a scenario involving a direct impact on its revenue. According to the club, its contracts with betting companies totaled R$45 million, equivalent to approximately 17% of its revenue.

The STF’s suspension of legal proceedings now centralizes the debate over the validity of the ban within the Supreme Court. Until a final ruling is issued, cases pending before lower courts will remain suspended, while the betting market awaits a decision that could determine the sector’s next steps in Brazil.