Lula's betting ban meets a country where 80 percent of families are in debt

President Luiz Inácio Lula da Silva has barred online sports betting and online casinos in the last days before Brazil's first-round presidential vote on Sunday. The provisional order took effect at once. New deposits are blocked. Punters and bookmakers have until 5 October to withdraw money already in accounts. Congress must approve the measure within 120 days or it lapses. Lula, 80, is in a close race with Flávio Bolsonaro, son of the jailed former president Jair Bolsonaro.

He called the industry a cancer and said either the tumour came out or it would kill the country. In a later line he said the poor were the ones who bet, got sick, and killed themselves because they were in debt. The order also sits beside a bill creating criminal offences tied to fixed-odds betting, the form most online sports books use. Lula noted that online betting was allowed under Michel Temer and said it grew without regulation under Bolsonaro.

The debt figures the ban is aimed at

More than 80 percent of Brazilian families are in debt, a high for the series kept by the National Confederation of Commerce, a retail group. Families spend nearly 30 percent of income on debt payments, the central bank's figure. Brazil has the highest benchmark interest rate among 40 major economies. Those three numbers are the backdrop to a ban announced in the final week of a campaign. An Atlas and Bloomberg survey published this week found 59.9 percent of adults support a ban on internet betting.

Online betting was legalised in 2018. The industry body that represents about 75 percent of the licensed domestic sector, the Brazilian Institute for Responsible Gaming, said a total ban on fixed-odds betting put the whole industry at risk and put 58 to 73 billion reais of revenue in question. That range is the trade group's number, not a finance-ministry estimate. It is the scale of the business Congress will be asked to shut, or to reopen, inside 120 days.

What a provisional order can and cannot do

A medida provisória is law from the hour it is signed, and it dies if Congress does not convert it. The 120-day clock runs through the election and into the next legislature if the vote goes to a runoff, which Brazil holds when no candidate passes 50 percent on Sunday. Withdrawals until 5 October are the practical deadline for account holders. After that, the order as written leaves money trapped if the operator cannot pay out. The government has not published a custodian for stranded balances.

The political timing is plain. A measure with 59.9 percent support, aimed at an industry the president calls a cancer, lands four days before a vote that polls have described as nearly even. Flávio Bolsonaro's camp can attack the order as a stunt, and it can also attack the debt the order claims to treat. The debt was not created in the final week. The 2018 legalisation, the Temer permission and the Bolsonaro years without a full rulebook are the period in which the books scaled. Lula signed the permission's reversal. He did not sign a household-debt relief bill in the same stroke.

The interest rate that sits under the bets

A family paying nearly 30 percent of income to creditors, at the highest policy rate in a set of 40 economies, is a family for whom a betting app is a second line of credit with worse odds. The ban removes the app. It does not cut the policy rate, and it does not restructure the storefront loans that have spread in cities such as Niterói. The New York Times' reporting this week from those storefronts is the picture the debt statistic needs: easy credit and a legal betting market arriving together.

Sunday's vote will not decide the 120-day clock. Congress will. If Lula wins and the new Congress converts the order, the 58 to 73 billion reais the trade group cites leave the formal economy and the tax take that was supposed to come with regulation. If he loses, a Bolsonaro presidency can let the order lapse in its fifth month. Account holders have until Monday to take cash out, two days after the first round. That withdrawal window is the part of the order that does not wait for Congress.