A few weeks after becoming law, Brazil’s online gambling ban is looking increasingly difficult to reverse.
With Luiz Inacio Lula da Silva winning reelection and the country’s Supreme Court halting lawsuits challenging the constitutionality of the prohibition, it looks like the ban will be here to stay for the foreseeable future at least. The move has already had a huge impact on European online gambling giants that did business in Brazil.
But could the same events happen in Europe?
Not long ago, it may have felt impossible to imagine a European country opening up its online gambling market, then shutting it completely a few years later. Tightening restrictions in the years post-opening? Yes, that was expected. But if a market opened, the assumption was that it would remain open in some form. Why would governments hand control back to the black market?
That may no longer be a guarantee. Brazil shows that online-gambling legalization is not always a one-way street.
Across the world it appears that evidence-based and nuanced positions are often political losers. Much of the public would prefer a simple solution.
Already, there are countries in Europe where the industry should take the threat of a Brazil-like ban seriously. Look at the Netherlands, which finally opened its market in 2021 after years of delay. There is clearly a movement – not just among fringe campaigners, but in the mainstream — in favor of undoing that work. The country’s Christian Democratic Party has long supported prohibition and has sympathizers across the political spectrum.
The initial structure of the regulated market has been chipped away through deposit limits and other restrictions, with a potential near-total advertising ban to come, but it seems to have done little to quiet the crowd that wants to return to a ban.
There are other countries where legalization could be reversed. Take a look at Romania, where local governments have been exercising powers to ban licensed gambling locations. Once politicians accept that licensed gambling businesses can be closed rather than better regulated, why couldn’t they come for the online sector too?
What can the industry do to prevent the worst-case scenario from coming to Europe? The industry has to think about persuadable skeptics — those who may be unhappy with legal gambling in its current form, but feel a ban is likely not the best answer.
That doesn’t mean simply accepting all of the reformers’ demands. History suggests that doing so doesn’t do much to satiate those asking for a ban.
But the opposite assumption, that resisting every restriction will protect the market, is no more convincing. The test should be whether a measure addresses a demonstrable problem and produces results that can be independently assessed, not whether it buys a temporary lull in criticism.
It is also important to understand which steps have a disproportionate impact on public opinion and which don’t. The biggest backlashes, including in Brazil, always seem to follow extensive advertising. That shouldn’t be surprising; it’s one thing that millions of non-gamblers will see. Product-based restrictions can be opposed more stridently and industry groups should work to make reasonable concessions on advertising, while still pushing back on calls for extreme ad bans.
And of course, committed prohibitionists are not the real audience. The industry’s more immediate task is to give supporters of a legal market evidence that the system can constrain the businesses it licenses. That means enforceable safeguards, clear evaluation, and a willingness to lose revenue when protection requires it, not simply warnings about the black market.
Clear evaluation may be particularly important. The industry needs to be able to point at something to say that its harm-reduction efforts are having a positive impact. Right now, those in the sector understand that they do make a difference, but they struggle to prove to the public that this difference is being made.
The industry also can’t assume that its tax contributions to public coffers make it indispensable; that approach did not work in Brazil. Supporters have to be able to defend gambling products in themselves as an enjoyable form of entertainment when consumed within a properly regulated market, not simply as a vice that makes up for its flaws with tax receipts.
This is by no means a prediction that a European ban is imminent.
If all goes well, these warnings may one day appear silly. But the industry cannot let itself get caught flat-footed as it did in Brazil, assuming that a market opening cannot be reversed until it is too late.
The industry needs to be aware that the worst-case scenario is real and every step it takes has to be made with that in mind.
