Brazil's Attorney General Asks Fux to Keep the Betting Ban and Hear the Prosecutor-General First

In a 60-page reply filed hours before licensed sites went dark, Jorge Messias asks the Supreme Federal Tribunal to refuse every request to suspend Provisional Measure 1.394, to wait for Paulo Gonet's opinion and to consider a new public hearing. The debate it proposes is one the government did not hold with the industry before it banned betting.

• Attorney General Jorge Messias has asked Justice Luiz Fux to reject in full the requests to suspend Provisional Measure 1.394, to exempt licensed operators from it or to extend its transition by at least six months
• The manifestation, signed at 19:40 on Monday 5 October and entered in ADI 7721 at 22:10, is the reply to Fux's 72-hour order that the dockets showed as filed but unpublished this morning
• It asks Fux to hear Prosecutor-General Paulo Gonet first, within 72 hours, and to consider a new public hearing to update the one he held in November 2024
• The Attorney General's Office (AGU) argues that the power to create a lottery product includes the power to abolish it, and that operators knew their authorisations could be revoked without compensation
• It says civil society was heard before the ban and names seven bodies, none from the betting sector; by Tuesday afternoon the dockets showed no ruling from Fux

The Government's Lawyer Tells Fux to Leave the Ban in Place

Brazil's AGU has asked the Supreme Federal Tribunal (STF) to keep the betting ban in force. In a manifestation signed electronically by Attorney General Jorge Messias at 19:40 on Monday 5 October, a little over four hours before licensed operators had to take their sites offline, it "manifesta-se pelo indeferimento" (asks for the rejection) of the requests by the National Association of Games and Lotteries (ANJL) and the Brazilian Institute for Responsible Gaming (IBJR), joined by other amici including Flamengo, São Paulo FC and the broadcasters' association ABERT. It opposes suspension in full and both alternatives. The ADI 7721 docket records it as AGU petition 125934 at 22:10:25 that night. Poder360 published the full text on Tuesday.

Its procedural requests matter as much as its arguments. Citing the sensitivity of the requests, it asks that Prosecutor-General Paulo Gonet be heard first, within 72 hours. It also asks Fux to assess "a possibilidade de realização de nova audiência pública" (the possibility of a new public hearing), because, although the hearing he convened on 11 and 12 November 2024 brought different sectors together, later experience and the measure itself "recomendam a atualização da instrução" (call for the record to be updated).

The Power to Create a Lottery Is the Power to End It

The core of the defence is constitutional. The Union's exclusive power to legislate on lotteries, the AGU argues, "compreende, por consequência lógica, a possibilidade de alterá-las ou suprimi-las" (logically includes the possibility of altering or abolishing them), and the 2018 and 2023 laws left the state free to reassess the policy in the light of experience. It calls the measure a case of "urgência superveniente" (supervening urgency) detected from the regulated market's own operation.

On the loss of five-year licences bought for R$30 million (approximately $5.8 million) each, it argues there is no acquired right to a legal regime. It cites Article 21 of SPA Ordinance 827 of 2024, which allowed an authorisation to be revoked in the public interest without "qualquer tipo de indenização" (any kind of compensation). "O risco regulatório era previsível" (the regulatory risk was foreseeable), it says. On revenue, it cites Treasury estimates of lost tax of R$1.541 billion (approximately $296 million) in 2026 and R$5.15 billion (approximately $990 million) in 2027, and says compensation claims were left out because they depend on an obligation it denies exists.

The Evidence, and the Concessions in It

The evidence largely repeats what the AGU filed on 2 October, when it asked the STF to void the betting laws themselves in ADI 7749: a 140% rise in public health service care under the gambling codes between 2018 and 2025, which it again says does not isolate fixed-odds betting, and 1,294,328 people on the self-exclusion register. It adds the Datafolha poll finding 78% support for the ban, and cites Fux's own vote upholding the gambling misdemeanour in RE 966.177.

It also makes two concessions the operators will use. It accepts that anti-money-laundering duties bound only licensed operators, "aqueles que não constituem o vetor do ilícito" (those who are not the vector of the wrongdoing), and puts the clandestine share of the market at 41% to 51%. And it says that "o custo marginal de reconstituição da oferta ilícita é irrisório diante do custo estatal de sua remoção" (the marginal cost of rebuilding illicit supply is negligible next to the state's cost of removing it).

Seven Bodies Heard, and None From the Sector

To rebut the claim that the measure was rushed, the AGU says "a sociedade civil foi ouvida antes da tomada de decisão" (civil society was heard before the decision was taken), naming the bishops' conference CNBB, the Lutheran church IECLB, the industry confederation CNI, the banks' federation Febraban, the union statistics body Dieese, the commerce confederation CNC and the consumer institute Idec, "dentre outros atores" (among other actors). BNLData, a Brazilian trade title that has opposed the ban, noted that the list contains no operator, association, club or broadcaster. The proposed hearing would include "as entidades representativas do setor de apostas" (the betting sector's representative bodies), but the experts the AGU names are largely the same seven. The CNC is the claimant in ADI 7721.

By Tuesday afternoon the dockets of ADI 7721 and of the ANJL's own action, ADI 8027, recorded three further filings that morning, whose contents were not public, and no decision.

The Request for More Process Is Itself the Defence

The ANJL asked Fux to rule before 23:59 on Monday because, it argued, the shutdown would be irreversible. The AGU's reply came late that evening and asks for two more steps first: an opinion from the Prosecutor-General, whose office brought ADI 7749 against the betting laws, and possibly a public hearing. Each is reasonable in a case of this size. The practical effect is also plain. Sites are offline, balances are passing to the banks, and the licences are extinguished on 25 October, the day of the presidential run-off. The longer the court takes, the more its question becomes whether to restart a market rather than whether to stop one closing.

Two Filings, Two Theories, One Gap

On 2 October the AGU told the STF the betting laws were unconstitutional because they protected rights too weakly. Now it says the Union was free to reassess a lawful policy, and that "não há, portanto, contradição constitucional" (there is, therefore, no constitutional contradiction) between regulating first and prohibiting later. The two are alternatives rather than opposites. Neither answers the operators' narrowest point: that a provisional measure must be urgent, and that the government chose a decree over a bill without, on the AGU's own list, hearing the companies whose licences it was extinguishing. Proposing that the court hear them now is the clearest acknowledgement in the filing that the skipped debate still has to happen somewhere.

The Illegal-Market Admissions Cut Both Ways

The AGU's case is that the 2023 framework failed to contain the clandestine market because it placed duties only on operators who were not the problem. That is a fair criticism. But the same paragraphs concede that illegal supply is cheap to rebuild and expensive to remove, and was already 41% to 51% of the market. A ban removes the licensed half and leaves the enforcement problem the government says it could not solve, with only the measure's untested payment and platform duties as the answer.

The government has now defended the ban where Fux asked it to. What it has asked for in return is time, and time favours the measure.