The measure comes ahead of the October 4 first-round election, where Lula faces a tight race with right-wing Senator Flavio Bolsonaro.
The government says the ban addresses rising household debt linked to gambling, while Bolsonaro called it “populist” and politically motivated.
Licensed betting sites will be blocked from October 6, after users are allowed to withdraw remaining funds.
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Brazilian President Luiz Inacio Lula da Silva announced a ban on online betting operations, less than two years after the industry was legalized.
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