Brazil’s federal government has filed a lawsuit against 17 betting companies seeking at least R$1 billion ($191 million) in collective moral damages and reimbursement for public healthcare costs tied to gambling addiction. The case, filed in the Federal Court of Pernambuco, follows President Luiz Inácio Lula da Silva’s executive order ending online betting in the country and marks a significant escalation in the government’s crackdown on the sector.
Brazil’s federal government has filed a lawsuit against 17 betting companies, seeking at least R$1 billion ($191 million) in collective moral damages and reimbursement for public healthcare costs tied to gambling addiction, Casino News Daily reported on October 2, 2026.
The case was filed in the Federal Court of Pernambuco. It follows President Luiz Inácio Lula da Silva’s announcement of an executive order ending online betting in the country. Industry groups have separately petitioned the Supreme Court to suspend that order, creating parallel legal battles over Brazil’s betting market.
The government argues that existing contributions from betting operators do not cover healthcare expenses linked to high-risk gambling. Current rules direct 0.12% of operators’ revenue to the Ministry of Health, with R$50 million transferred during the latest cycle. Preliminary Health Ministry studies estimate treatment costs at R$2.6 billion ($496 million).
The Attorney General’s Office says the 17 companies named in the case account for about 80% of Brazil’s fixed-odds betting market. The government wants operators to reimburse the Unified Health System (SUS) for expenses associated with treating gambling-related conditions.
The precise reimbursement amount would be established during the proceedings. The claim seeks reimbursement for gambling-related treatment costs incurred during the five years preceding the lawsuit and could also cover future costs while damages recognized by the court persist.
The government is also seeking double repayment of amounts wagered by people diagnosed with gambling disorder. Research cited by the government estimates that 28 million Brazilians had gambled online during the previous 12 months in 2023, with 10.9 million displaying patterns of high-risk or problem gambling.
According to the government, treatment for pathological and excessive gambling through the public health system increased by 140% between January 2018 and December 2025.
“The defendant companies privatise significant profits derived from the financial collection from millions of bettors, while transferring the budgetary cost resulting from collective illness to the SUS and to society as a whole,” the AGU said in the lawsuit.
The government filed the case in Pernambuco, citing the Northeast’s concentration of socioeconomically vulnerable people involved in high-risk gambling.
The Brazilian Institute for Responsible Gaming (IBJR) has criticized the lawsuit, arguing that targeting companies operating within Brazil’s regulated market creates legal uncertainty.
Industry Seeks Supreme Court Intervention
The National Association of Games and Lotteries and the Brazilian Institute for Responsible Gaming have asked the Supreme Court to suspend Lula’s executive order.
The groups argue that the measure affects legal certainty, freedom of enterprise, consumer protection and Brazil’s federal system. They are seeking an injunction while Congress considers the order or the court reviews it.
If the main request fails, the groups have asked for authorized operators to receive an exemption or for enforcement to be delayed by six months. The filing states that 85 authorized companies currently operate 186 brands in Brazil.
Industry representatives have also warned that the ban could push users to illegal platforms. “The most effective measure is to keep them in a regulated and safe environment,” they said in the filing.
Government agencies have stepped up action against unlicensed betting services. A task force took down 506 websites showing signs of unauthorized betting activity following the executive measure.
Authorities also identified seven betting advertisements on Meta that appeared after the measure was issued. Betting advertisements were also found on Google, although authorities could not determine whether all of them had been published before or after the prohibition took effect.
Under the government’s stated timetable, licensed betting sites will be blocked in Brazil from October 6.
