KTO shuts down Brazil operations after provisional betting ban

KTO closed its Brazilian operations less than three weeks after the Brazilian executive approved Provisional Measure 1,394/2026, which prohibited online betting. The operator initiated mass layoffs on 8 October, when more than 200 employees were dismissed; industry tallies place total job losses in Brazil’s betting sector at over 3,500 since around 25 September, the date President Luiz Inácio Lula da Silva signed the measure.

KTO Brazil shutdown: immediate impact and staffing

KTO — headquartered in Malta and founded in 2018 — entered the Brazilian market in 2019 and had concentrated its Latin American footprint on Brazil after withdrawing from Peru and Chile in August 2024. The company carried out the October 8 layoffs in Brazil after the passage of Provisional Measure 1,394/2026. KTO has not issued a public statement formally confirming the closure of its Brazilian operations beyond the dismissals reported by staff and industry sources.

Andreas Bardun, KTO’s founder and chief executive officer, warned prior to the dismissals that many people would lose jobs following the law’s enactment, while clarifying that not every employee would be dismissed. Anthony MacKay, KTO’s head of affiliates, wrote on LinkedIn that the recent legal developments in Brazil made it impossible for a company like KTO to operate in the country.

Analysts in the market estimated KTO’s 2025 gross gaming revenue at about €46.2 million (US$54 million), with that figure attributed entirely to Brazil. That concentration of revenue helps explain the rapid operational retrenchment once the provisional ban took effect.

Timeline: from sponsorships to legal ban

KTO’s withdrawal followed a concentrated sequence of events earlier in 2026 around advertising and regulatory scrutiny. The company had signed sponsorship agreements with CazéTV for World Cup coverage on YouTube, expected to cover over 100 matches. Reported figures for advertising reach during the tournament include 21 million viewers for Brazil vs Japan, 24.2 million for France vs Japan, and a combined total of 2.5 billion views across the CazéTV broadcasts.

Sources quoted that the sponsorship agreements generated roughly €320 million (R$2 billion) in value for the broadcaster, while individual sponsorship deals were believed to be around €29.6 million (R$185 million) each. KTO’s own sponsorship cost was not disclosed by the operator.

Regulatory intervention accelerated the situation:

• 24 June: National Consumer Secretariat (Senacon) opened a preliminary investigation into betting advertising on CazéTV, including campaigns by KTO.

• 26 June: National Council for Self-Regulation in Advertising (Conar) suggested cancelling advertising campaigns by KTO, Bet365 and Betnacional.

• 30 June: Advertising self-regulator Serviço de Promoção da Autorregulação (SPA) suspended the campaigns as a precaution and opened an administrative procedure, citing that the ads created an urgency to bet and used fonts too small to convey required information.

Operators faced potential fines and licence consequences tied to the advertising probe, with penalties reported in the same ballpark as the sponsorship value — about €320 million (R$2 billion) — although no final sanctions were published before the provisional measure took effect.

Legal response and industry challenges to the ban

Industry groups and operators moved to challenge the prohibition. The Associação Nacional das Loterias (ANJL), Instituto Brasileiro de Jogos e Renda (IBJR) — a body co-founded by KTO — and Associação Nacional de Serviços e Jogos Agressivos (Anseja) filed actions in the Supreme Court of Brazil contesting the provisional measure. Until the judiciary resolves those challenges, operators were obliged to comply with the SPA’s advertising requirements and other administrative measures, with a compliance deadline set by regulators through 15 December for specific advertising rules.

The provisional measure itself was signed into effect by President Lula in late September, with reporting placing the signature around 25 September. The measure created a sudden legal environment in which operators reliant on Brazilian revenue needed to decide whether to seek a legal remedy, pivot business lines, or exit the market.

Commercial context and prior strategy

KTO had narrowed its Latin America strategy before the 2026 advertising and regulatory events. The company withdrew from Peru and Chile in August 2024 to focus on Brazil, making the Brazilian market the source of all its estimated 2025 revenue. That strategy left KTO exposed when the provisional measure removed the legal basis for online betting in Brazil.

The sponsorship push around the World Cup was part of KTO’s growth and brand strategy in Brazil. Executives had invested in high-profile local partnerships — notably the CazéTV deal — to build audience reach. The subsequent regulatory push on advertising content and presentation created both legal risk and commercial pressure on operators dependent on aggressive market marketing.

What operators and suppliers should watch next

Operators with Brazil exposure will be tracking judicial appeals against Provisional Measure 1,394/2026 and the administrative outcomes of the SPA procedure. The industry’s legal challenges at Brazil’s Supreme Federal Court could reverse, narrow or clarify the provisional measure, but litigation timelines are uncertain. Regulators have already required compliance with advertising rules through 15 December while the legal process unfolds.

Platform vendors, affiliates and marketing partners will also assess counterparty risk quickly. KTO’s head-of-affiliates message and the rapid layoffs underline that an adverse change in market status can translate into immediate workforce and partner disruption.

For context on regulatory actions and required compliance steps in markets with active enforcement, see regulation and operator commercial moves in our news coverage.

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

KTO’s Malta headquarters and its 2018 founding remain fixed corporate facts as the company reorganises after the Brazilian exit. The longer-term outcome will depend on the Supreme Court challenges and any subsequent legislative or executive action that alters the provisional measure’s force in Brazil.