Brazil Suspends Municipal Lotteries 2025 iGaming Shakeup Reforms

Amid its greater iGaming market shakeup of 2025, Brazil has now suspended municipal lotteries. The Supreme Court banned these operators on December 3, introducing heavy fines on municipal operators supplying betting products and lotteries. It is understood that the federal gambling regulators want to push for unified lottery rules, cutting out any operators that run on state level or local permissions. Brazilian gamers and sports bettors have already endured plenty of changes and reforms to the iGaming scene in the country, and they continue to roll out.

This particular change does not come as a major surprise, as Brazil is trying to reshape the entire framework and structure of its vast and highly valuable iGaming scene. The goal, to tidy up, add transparency, and hold operators accountable to their duty of care for players. Though Brazil, with all the changes it has implemented in 2025, runs a very real risk of turning players away, and losing traffic to illegal, or black market, operators.

Brazil Shuts Down Municipal Gambling Authorities

In response to a claim of non-compliance with the Fundamental Precept (ADPF 1212), the Federal Supreme Court of Brazil (STF) ordered the immediate cessation of municipal lottery activities. The operators were alleged to have conducted activities that violated the legislation, and thus the laws that gave municipalities the authority to legislate iGaming operators was pulled and is now being called into question. Any municipal lotteries and operators who breach the suspension will be issued a daily fine of R$ 500,000 and $50,000 will be issued individually to majors or presidents of the accredited companies.

Brazil has over 75 municipalities that have passed laws or have created local lotteries and sports betting sites, which now immediately have to stop. To be clear, it will not affect any brands or major private operators – the STF is targeting local lottery providers that often give licenses to local or online only platforms running in the region.

Which Operators Are Affected

Many of the municipalities had the jurisprudence, but didn’t actually open local lotteries or betting products. The only municipal lottery in Brazil with an active operator brand and real activity at the time of the ruling was:

Bodó (RN) – Lotseridó

Most municipalities were still in the first phase of the legislation, authorizing operators/brands. Among municipalities like São Paulo, Guarulhos, Campinas and Aparecida de Goiânia, they had not gotten round to Phase 2. Which would include the licensing, branding and ultimate launch. So with only Bodó active, there will be no massive purge of operators – like there was last month in Italy, where 400+ betting sites were cut down to just over 50.

Most operators are licensed by the Brazilian federal regulator, and so are not affected by the suspension.

Other Gambling Reforms of 2025

Brazil’s iGaming landscape has gone through massive reforms in the past couple of years, aiming to clear up and create a more structurally robust system for gamers. It all started on January 1, 2024, with the enactment of Secretaria de Prêmios e Apostas, the Secretariat of Prizes and Betting. Launched through Decree No. 11,907, the SPA is responsible for regulating, authorizing and monitoring operators in Brazil, and it has the autonomy to apply sanctions or investigate suspect gambling operators.

A new, stricter, licensing regime was rolled out, with new legislation on technical, financial and security compliance.  The KYC and AML legislation was boldened, with facial recognition ID verification technology required upon signup, and operators require individual taxpayer registration (CPF) numbers.

Brazil also introduced a new dual taxation system, hiking the tax from 12% to 18%, and is still reforming the taxation system. Players are also affected, with a new legal minimum gambling age and enforced monthly spending limits. It doesn’t stop there either. Brazil also has reshaped the laws where payment is concerned, cutting off payment gateways associated with unregulated operators like cryptocurrency, credit cards, cash in hand, payment slips and cheques.

Changes for Operators

All operators in Brazil have to work on their brands and make sure they meet the new transparency, anti-fraud systems, game fairness certification, financial guarantees and safer gambling regulations. From the simplest changes such as changing their betting sites to have “bet.br” URL endings to submitting annual reports to the SPA, the main changes include:

• Use certified game providers and provably fair RNG systems
• Host all player data within Brazil or in approved jurisdictions
• Maintain a Brazil-based legal representative and comply with ongoing audits
• Restrict advertising on TV, radio and videosharing platforms
• Implement real-time AML monitoring, source-of-funds checks, and store transaction logs for a minimum period specified by SPA
• Display clear risk warnings, responsible gambling messages, and transparent bonus terms
• Prove financial resilience, including minimum capital requirements and bank guarantees

Many foreign or private operators have had to go through major overhauls to meet the standards. These are not minor tweaks, they are costly and require full restructuring in some cases – but the alternative is heavy administrative fines, suspended iGaming licenses, or in some cases, full exclusion from the Brazilian market.

New Laws Players Must Observe

Gamers are also impacted by the reforms, and while they are made with the player’s well being in mind, not all gamers are thrilled with Brazil’s new iGaming market.

• Minimum gambling age is set and now fully enforced
• CPF verification is mandatory for all deposits, withdrawals, bonuses, and account creation
• Facial recognition or biometric verification is required upon registration and sometimes during KYC refresh checks
• Players must adhere to mandatory monthly spending limits, part of Brazil’s safer gambling framework
• Payments through unregulated or anonymous methods are prohibited for betting use
• Winnings above certain thresholds are taxed at the player level, with automatic withholding
• Self-exclusion and cooling-off periods are now binding across all licensed platforms

The laws make it far more difficult for black market operators to continue serving Brazilian players. But some gamers may find these changes pretty suffocating – such as facial recognition KYC checks, forced monthly spending limits and automatic taxation on larger winnings such as players hitting the jackpot.

Brazil Launching a National Self Exclusion System

Brazil also announced that it will be rolling out a nationwide self exclusion register at the end of 2025. This will allow bettors and gamblers to voluntarily request to be self excluded, and they can do it for fixed terms or permanently. A bit like the UK’s safer gambling register, GamStop, if you self exclude from one licensed iGaming operator, you won’t be able to join or continue gambling at another licensed platform.

The self exclusion register, created through Brazil’s centralized databased Sigap, will use the player’s CPF, or Individual Taxpayer Registration numbers. Gamers need to submit this number when they register at new sites, and at their first login each day, as well as every 15 days for active users. Outside the UK, Spain also has a self exclusion register, which was introduced with the major Spanish iGaming reforms this year.

Brazil’s Onshore Channelization

The self exclusion register will stretch out to all licensed and officially governed gambling sites, with the goal of creating a safer environment for gamers in Brazil. One of the core objectives of the SPA is to increase the onshore channelization and bring more players to licensed sites. They want to draw a clearer line on what sites are approved and which aren’t, and make it more difficult for users to access internationally regulated or gray/black market gambling operators.

Brazil has blocked domains belonging to offshore operators, cut off payment methods associated with these operators, and issued clearer fines and enforcement actions against these brands. The initial reports suggest it could be paying off for Brazil, with heightened onshore channelization, but time will tell whether the public will respond positively to the many reforms that have been rolled out – and the ones that are still yet to come.

How Brazil’s iGaming Will Look Like in 2026

By 2026, Brazil’s iGaming market will be virtually unrecognizable from what it was a few years ago. Suspending municipal lotteries will not make as much of an impact on the scene as what else the SPA has been up to, with heightened taxation, greater KYC and responsible gambling limits, limited payment options and a new minimum legal age for gambling, among countless other new laws. Everything is converging toward a fully unified licensing system, rather than having local Jogo do Bicho or municipal gambling sites that could potentially use the fragmented state laws to offer something different.

However constraining the laws may be on operators, Brazil is still a tremendous up and coming market, and so it won’t lead to a smaller field of brands. However, to meet the compliance costs and demands, operators may have to cut back on the quality of their products. Whether it is by cutting back on bonuses, increasing sportsbook juice, or just choosing online casino games that are cheaper to run – there will most likely be a few pinches in the near future.

From a player’s perspective, there are lots of new variables to factor in. The limited payment options, taxation on higher winnings, enforced spending limits and tightened KYC may turn some off, and even if those don’t, the offering of licensed sites may fall short of what Brazilian gamers have been accustomed to up until 2025. With Brazil becoming one of the most structured, tightly regulated, and closely monitored gambling markets in the world, time will tell whether the reforms succeed or whether Brazil will need to continue tweaking laws to stop losing gamers to the unregulated channels.