Gaming & Betting
Provisional Measure 1,394/2026 excludes grant-fee refunds and compensation, raising a separate debate over the effects of early termination.
Marinho de Gusmão Team
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Provisional Measure No. 1,394/2026 requires fixed-odds betting authorizations to terminate within thirty days and expressly states that operators are not entitled to a full or partial refund of the grant fee or to compensation from the government.
As discussed in “Provisional Measure 1,394/2026 and Brazil's Betting Ban: Impact on Authorizations, Grant Fees and Ongoing Operations”, that is one consequence of a broader regulatory shift. For operators that paid up to BRL 30 million for authorizations of up to five years, it raises a distinct financial question: does the statutory no-refund rule, by itself, eliminate every economic claim arising from early termination?
The answer requires caution.
Companies in regulated markets generally have no absolute right to an unchanged legal or public-policy framework. Yet these authorizations were neither free nor indefinite: Law No. 14,790/2023 contemplated a term of up to five years, conditioned issuance on payment of a grant fee and imposed substantial technical, financial, corporate and compliance requirements.
The debate lies in the distinction between changing the regulatory framework and allocating the financial consequences of legal positions already established.
What does Provisional Measure 1,394/2026 say about the grant fee and compensation?
The starting point is the text of the measure itself.
Article 4 terminates concessions, permissions and authorizations for fixed-odds betting thirty days after publication. Its sole paragraph states that termination is based on public interest and does not create a right to a full or partial refund of the grant fee or to compensation from the government.
That is the rule currently in force.
This is not a case in which the legislation is silent on the financial effects of termination. The measure expressly seeks to exclude them.
The provision may nevertheless be examined against the Constitution and the principles governing established relationships between the state and private parties. The legal question is not whether Article 4 can be disregarded, but how far it may validly produce its intended effects.
What kind of authorization was granted to betting operators?
The answer depends on the legal nature of the authorization.
Law No. 14,790/2023 characterized fixed-odds betting authorization as a discretionary administrative act, issued by the Ministry of Finance in light of convenience, opportunity, the national interest and protection of the public.
At the same time, the law made the authorization personal to the holder, non-negotiable and non-transferable, and allowed a five-year term.
The authorization was not free. Issuance required payment of a grant fee of up to BRL 30 million for as many as three brands, after favorable completion of the administrative authorization process.
Market entry also required proof of technical and financial capacity, an appropriate corporate structure, cybersecurity, certifications, customer-support policies, AML/CFT controls, responsible gaming and betting integrity.
This combination — administrative discretion, a defined term, consideration and intensive regulation — distinguishes the authorization from a simple, cost-free and inherently revocable permit.
Industry organizations argue that the term and fee gave the authorizations a degree of legal stability inconsistent with early termination without addressing the financial effects.
That argument is legally relevant, but no court has yet recognized an automatic right to reimbursement or compensation.
Can the state change the regime and still face financial consequences?
This distinction is central.
For analytical purposes, the state may have authority to revise its betting policy while the consequences for specific authorizations already granted remain open to challenge.
These are not necessarily the same question.
A conclusion that operators have no vested right to indefinite continuation of the betting framework does not automatically determine the treatment of consideration paid for a fixed-term authorization.
Likewise, recognizing that regulated activities involve regulatory risk does not necessarily allocate every cost of an early termination ordered by the government to the private party.
The strongest financial argument does not depend on claiming that the state could never prohibit betting. It asks a narrower question: when the state prematurely ends a fee-based regulatory relationship that it created for a defined term, which economic consequences may legitimately be transferred to the operator?
That is where the grant fee, protection of legitimate expectations and investments made to comply with the previous framework become relevant.
Is there a basis for proportional reimbursement of the BRL 30 million fee?
One principal argument is that the operator should receive a proportional refund for the portion of the authorization term it can no longer use.
The economic logic is straightforward.
Law No. 14,790/2023 conditioned issuance on payment of the fee and permitted a term of up to five years. The Provisional Measure terminates the authorization early and states that the fee will not be returned.
This raises the question whether the federal government may retain the full consideration when it has eliminated a substantial part of the authorization's economic utility before the end of its term.
Industry organizations have relied on this reasoning to argue that proportional reimbursement should reflect the unused portion of the authorization period.
There is, however, no express formula in Law No. 14,790/2023 for proportional reimbursement in this situation.
Any claim will therefore depend on the legal nature of the payment, the financial content of the authorization and the constitutional validity of the no-refund provision.
Each authorization must also be considered individually. Operators began activities at different times and therefore used different portions of their authorized terms.
The BRL 30 million issue is not a purely mathematical exercise.
Public-interest takeover, legal certainty and legitimate expectations
The Brazilian concept of encampação — a public-interest takeover — naturally appears in this debate because the measure itself relies on public-interest grounds.
Under Law No. 8,987/1995, which governs concessions and permissions for public services, encampação means resumption of the service by the granting authority during the concession term, based on public interest, through specific legislation and after prior compensation. The law also addresses unamortized investments in reversible assets.
The analogy must be used carefully.
Law No. 14,790/2023 expressly adopted an authorization, not a concession. It would therefore be inaccurate to assume that Articles 36 and 37 of Law No. 8,987/1995 apply directly to betting authorizations.
Encampação may serve as a legal and interpretive reference for the treatment of investments when the government ends an activity early on public-interest grounds. That does not make the two regimes identical.
The same caution applies to legitimate expectations.
Brazil created the market, defined entry requirements, collected the fee, authorized companies, implemented Sigap, charged supervisory fees and subjected operators to continuing obligations. Industry organizations argue that this sequence of government acts created a legally protected expectation that operations could continue throughout the authorization term.
Protection of legitimate expectations does not freeze legislation. Its function is to assess whether a particularly severe change may affect established positions without an adequate transition or without addressing the specific effects produced by the state's prior conduct.
Articles 23 and 24 of Brazil's Introductory Law to the Norms of Brazilian Law (LINDB) reflect similar concerns by addressing transitions after new official interpretations and the treatment of positions formed under previous guidance. They do not directly resolve a legislative change of this kind, but they illustrate the importance of legal certainty and proportionate transitions in contemporary Brazilian public law.
What about investments made to obtain and maintain the authorization?
The grant fee was not the operator's only financial commitment.
The legal and regulatory framework required a Brazilian corporate structure, capital, qualified management, compliance policies, AML/CFT and responsible-gaming controls, technical certifications, cybersecurity, customer support, systems integration and other measures necessary to obtain and maintain authorization.
Early termination therefore raises a second issue: the treatment of unamortized investments or investments whose economic value was directly eliminated by the regulatory change.
Not every historical cost should be presumed compensable.
A sound analysis must distinguish investments that were effectively lost from expenses that already produced value; assets that became unusable from assets that can be repurposed or sold; investments imposed specifically by the Brazilian framework from ordinary operating costs; and amounts already amortized from those still economically outstanding.
The same reasoning applies to required financial reserves. A reserve is not automatically a loss. If the funds remain the company's property and can be released after regulatory obligations are met, they differ from an expense that has been permanently consumed.
In any financial claim, the accounting evidence will be as important as the legal theory.
Are reimbursement, unamortized investments, wind-down costs and lost profits the same?
No. Keeping these categories separate is essential to avoid overstated assessments.
Grant-fee reimbursement concerns the return of an amount paid directly to the state to obtain the authorization.
Unamortized investments are expenditures made to establish and maintain the regulated operation that may have lost economic value because of early termination.
Wind-down costs may include liabilities caused directly by shutdown, including contractual obligations that must be settled early.
Lost profits are earnings the operator claims it would have generated during the remaining authorization period.
Lost profits generally require substantially more complex evidence. Projected revenue is not profit, and any projection must account for costs, business risks, the operation's actual record and the regulatory environment.
It is therefore inappropriate simply to add the BRL 30 million fee, historical expenses, future contracts and revenue projections and label the total “compensation”.
Each category has its own legal basis, causal requirements and evidentiary standard.
This separation is critical both to potential litigation and to the operator's internal assessment of contingencies, audits, financial statements and corporate decisions.
What should operators document now?
Whatever legal theory ultimately prevails, the quality of documentation assembled now will be decisive in any future financial analysis.
Operators should build a regulatory and financial file for each authorization showing:
the authorization, issue date, term and covered brands;
proof of payment of the grant fee;
the portion of the term actually used before termination;
investments made specifically to obtain and maintain the Brazilian authorization;
the accounting criteria used to amortize those investments and the outstanding balances;
contracts terminated or amended directly because of the measure and the resulting costs;
technology and operating assets that lost utility and those that remain usable;
costs directly related to wind-down;
financial statements, invoices, contracts, certifications, corporate minutes and communications with authorities that support the amounts claimed; and
steps taken by the company to mitigate its losses.
Organizing this evidence does not mean that every amount is recoverable. It separates demonstrable loss from economic expectation and preserves evidence before teams, contracts, systems and structures are dismantled.
What if the measure is amended or is not converted into law?
The provisional nature of the measure adds another layer of uncertainty.
Under the Constitution, provisional measures have the force of law from issuance but remain subject to congressional review. They may be converted into law, amended, rejected or lapse. Article 62 also establishes specific rules for legal relationships formed while a measure is in force.
That legislative question is distinct from the financial analysis developed here.
For operators, the practical consequence is immediate: they should not wait for the legislative outcome before preserving documents and quantifying the economic effects of termination.
The speed of the statutory timetable makes this work more important, not less.
Conclusion
The current text of Provisional Measure No. 1,394/2026 clearly states that termination of the authorizations does not create a right to reimbursement of the grant fee or compensation from the government.
That does not necessarily mean that every financial issue has been legally resolved.
The previous framework combined elements that must be considered together: a discretionary authorization granted for a defined term; consideration of up to BRL 30 million; substantial entry requirements; and continuing investments needed to maintain a regulated operation.
The more precise analysis does not begin with an absolute right to continue betting operations.
It begins with a different question: when the state prematurely terminates an activity that it authorized for a defined term and in exchange for consideration, which specific financial effects may legitimately be allocated to the operator?
The answer will depend on the measure's legislative and judicial development and on the legal characteristics of each authorization.
Operators nevertheless have an immediate task regardless of the outcome: preserve documentation, identify investments and costs directly connected with the authorization, and build a technically consistent financial record of the operation and its wind-down.
That record will allow future judicial, regulatory, corporate or accounting decisions to rely on verifiable data rather than estimates prepared after shutdown.
This material is for informational purposes only and does not replace legal advice on a specific matter.
Related practice area: Gaming & Betting.
Official sources
Frequently Asked Questions
Does Provisional Measure 1,394/2026 provide for reimbursement of betting grant fees?
No. Article 4 expressly states that termination does not entitle operators to a full or partial refund of the grant fee or to compensation from the government.
Does the rule eliminate every possible reimbursement or compensation claim?
Not necessarily. The rule applies while the measure is in force, but its constitutional validity and its effect on fee-based, fixed-term authorizations may still be challenged.
Is there a statutory formula for proportional reimbursement of the BRL 30 million fee?
No. Law No. 14,790/2023 provides no formula for this situation. Any claim will depend on the legal nature of the fee, the portion of the authorization term actually used and the validity of the no-refund provision.
Is every investment made by an operator potentially compensable?
No. Operators must distinguish costs already amortized or assets that can be repurposed from investments whose utility was directly eliminated by termination, and must prove both causation and value.
What should operators preserve now?
The authorization, proof of the grant-fee payment, the term actually used, amortization records, affected contracts, wind-down costs, assets that lost utility, financial statements, certifications and evidence of steps taken to mitigate loss.
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