KTO closes operations in Brazil after provisional measure is approved

KTO closed its operations in Brazil less than three weeks after the approval of Provisional Measure 1.394/2026, which banned online betting; the operator carried out more than 200 redundancies on 8 October 2026. The decision followed a series of regulatory actions and advertising interventions that preceded the presidential veto.

Operational closure and immediate redundancies

The bookmaker KTO, headquartered in Malta and founded in 2018, announced the cessation of activity in Brazil following the entry into force of Provisional Measure 1.394/2026. KTO had entered the Brazilian market in 2019 and, according to the company’s count, the redundancies on 8 October affected more than 200 employees. The total job losses in the betting sector since 25 September, the date on which President Luiz Inácio Lula da Silva signed the provisional measure, exceed 3.500 positions in Brazil.

Anthony MacKay, head of affiliates at KTO, wrote on LinkedIn that recent regulatory developments in Brazil made it impossible for a company like KTO to continue operating in the country. Andreas Bardun, KTO founder and chief executive, said many people would be made redundant after the rule took effect, although not all employees would necessarily be dismissed.

Reported economic impact and market background

An analysis by Blask estimated KTO’s 2025 gross gaming revenue at approximately €46.2 million (US$54 million), a figure the firm attributed entirely to its operations in Brazil. In August 2024 KTO withdrew its operations from Peru and Chile to concentrate exclusively on Brazil.

Advertising, sponsorships and regulatory focus

Three months before the prohibition, KTO signed sponsorship deals with CazéTV to cover more than 100 World Cup matches on YouTube. Reports place the audience-related revenues generated by those sponsorships at around €320 million (R$2 000 million), although the exact cost of the sponsorships for KTO was not made public. Press-cited sources estimated each sponsorship contract at about €29.6 million (R$185 million).

CazéTV recorded audiences of 21 million for Brazil vs Japan and 24.2 million for France vs Japan, with a total of 2.5 000 million views during the tournament. That reach put the advertising campaigns under regulators’ scrutiny.

Timeline of regulatory interventions

Pressure on advertising campaigns and operators escalated in the following sequence:

1. 24 June: the National Consumer Secretariat (Senacon) opened a preliminary investigation into betting advertising on CazéTV, including KTO’s.

2. 26 June: the National Council for Advertising Self-Regulation (Conar) recommended withdrawing advertising campaigns by KTO, Bet365 and Betnacional.

3. 30 June: the Superintendence for Prevention and Consumer Guidance (SPA) suspended the campaigns as a precautionary measure and opened an administrative proceeding, finding that the adverts created an urgency to bet and did not display information in a sufficiently visible font size.

Operators faced potential penalties that could reach approximately €320 million (R$2 000 million) and possible license suspensions, but there was no definitive resolution before the provisional measure took effect.

Judicial responses and industry lobbying

Industry organisations — ANJL, Instituto Brasileiro de Jogos e Regulação (IBJR), an entity co-founded by KTO, and Anseja — challenged the measure in the Supreme Federal Court of Brazil. While those appeals are pending, operators were required to comply with SPA requirements until 15 December 2026.

Operational consequences and considerations for suppliers

KTO’s closure and the redundancies illustrate how quickly a regulatory change can trigger market portfolio reconfigurations and local workforce adjustments. For suppliers and commercial partners the sequence clarifies two priorities: document exposure to the Brazilian market and have contingency plans for rapid withdrawal. Groups managing regional operations had already shown signs of retrenchment in LATAM with KTO’s exit from Peru and Chile in 2024.

"Recent developments in Brazil made it impossible for a company like KTO to operate in the country," Anthony MacKay wrote on LinkedIn.

What’s next: litigation and regulatory windows

The judicial process before the Supreme Federal Court will mark the next chapter. If the court accepts to review the constitutionality or the formal legality of Provisional Measure 1.394/2026, it could open a door to the reopening of operations or partial remedies. If not, the veto will remain in force and market reconfiguration will continue, with immediate impact on employment and sponsorship contracts.

For sector reading on commercial adjustments and compliance, this case will be cited in debates on advertising responsibility, sports sponsorship contracts and revenue exposure when an operator concentrates its GGR in a single market. Operators, suppliers and affiliates should monitor the appeal in the Supreme Court and the implementation of administrative decisions by the SPA and Senacon.