The stock of Allwyn is under heavy pressure once again on the occasion of the JP Morgan report, but essentially the concerns that have existed for months not only regarding the specific company, but generally for betting companies, are returning. Bans, tax increases, forecasting companies, and others had created a major wave of liquidations in the sector over all previous months. That is, it is not only Allwyn that is declining. It suffices to recall what happened with the tax increase in Britain. Allwyn began to be pressured due to the OPAP-Allwyn exchange ratio and concerns over whether the new scheme can pay the dividend it used to pay.
So far, the management is honoring its commitments and recently distributed an interim dividend of 0.20 euros. On the other hand, JP Morgan in a report today reduced the price target to 9 euros from 13 euros, seeing risks in America and Brazil. Also this week, MSCI will publish the index reconstitution, and scenarios regarding the exit of the stock have been circulating. It is considered certain that in the index, when the market is upgraded, the stock will be out. However, some analysts do not rule out that it may be removed in Wednesday's reconstitution. A month ago, scenarios of nationalizing the state lottery in Britain had pressured the stock. According to what the newspaper The Telegraph wrote, Culture Minister Lisa Nandy was in favor of adding the lottery to the list of businesses suitable for state ownership. This move reportedly stems from concerns regarding the performance quality of the current operator, namely Allwyn, which took over the management of the British lottery last year.
There was also the ban in Brazil affecting the company through its participation in Betano. It is noted that Brazilian judge Luiz Fux accepted the request of the Prosecutor General and suspended the progress of all legal cases challenging the ban on sports betting and online gambling in Brazil. The cases will remain pending until the Supreme Federal Court rules definitively on the constitutionality of the measure. The stock is at 10.30 euros and market executives consider that below 10 euros it is an opportunity for investments, despite the difficulties facing the industry.
Brazil: The Supreme Court freezes all legal challenges against the betting ban
Meanwhile, Brazilian judge Luiz Fux accepted the request of the Prosecutor General and suspended the progress of all legal cases challenging the ban on sports betting and online gambling in Brazil. The cases will remain pending until the Supreme Federal Court rules definitively on the constitutionality of the measure. Significant legal development is recorded in the Brazilian gambling market, as the Supreme Federal Court (Supremo Tribunal Federal - STF) decided to suspend all legal challenges filed against the provisional government act (Medida Provisória - MP), by which sports betting and online gambling were banned in the country.
Specifically, STF judge Luiz Fux accepted the request of the Office of the Attorney General of the Republic (Procuradoria-Geral da República - PGR), deciding the freeze of all related legal proceedings until there is a definitive ruling by the Supreme Court regarding the constitutionality of the government decision. According to Luiz Fux, the goal of the decision is to ensure legal certainty and prevent the issuance of contradictory court rulings on an issue with significant social repercussions. As stated in his reasoning, there is a risk of creating legal uncertainty due to the possibility of multiple and different rulings being issued by courts, especially since it concerns the potential licensing of an activity characterized as harmful and of high social risk, such as fixed-odds betting. The decision has a provisional character and must be submitted to the judgment of the STF Plenary, in which all Supreme Court judges participate.
Intervention of the Prosecutor General: Lower court decisions created a different regime
The request for the suspension of legal cases was filed on Friday, November 6, by the Office of the Attorney General of the Republic. Prosecutor General Paulo Gonet argued that certain lower courts had begun accepting challenges from betting companies, allowing them to continue operating with the argument that the provisional government act is unconstitutional. However, given that the Supreme Court has not yet examined the constitutionality of the measure, the Prosecutor General estimated that these specific rulings were leading to unequal application of the legislation among businesses subject to the same regulatory framework. The intervention of the PGR aimed, therefore, to prevent a fragmented legal landscape in which certain betting platforms could operate normally while others remained out of the market.
Temporary resumption of three platforms and government intervention
Indicative of the legal confrontation that has broken out in Brazil is the case of three betting platforms managed by CDA Gaming. Last week, federal appellate judge Adriana Pileggi de Soveral, of the Regional Federal Court of the 3rd Region (TRF-3), issued a ruling allowing the three platforms to resume their operations. However, the decision was suspended a few days later by the court president, federal appellate judge Luís Antonio Johonsom di Salvo, following a relevant request by the State Attorney General's Office (Advocacia-Geral da União - AGU). This specific case highlighted the different approaches prevailing in the judiciary regarding the application of the ban, reinforcing the need for a unified decision by the Supreme Court.
How the betting ban in Brazil came about
The suspension of betting business activity throughout Brazil came into effect on September 25, 2026, with the signing of the provisional government act. Following this decision, associations representing licensed businesses in the sector, as well as other bodies, appealed to the Supreme Federal Court, challenging the legality and constitutionality of the measure. The main argument of the appellants is that the sudden cessation of operations of an industry that had previously been licensed violates fundamental constitutional principles, such as legal certainty, free competition, and due process. At the same time, they argue that the government decision also violates the administrative autonomy of individual Brazilian states. The relevant appeals were assigned to judge Luiz Fux, who had already undertaken the examination of other cases concerning the gambling sector and legislation for online betting.
Congress has 120 days to approve the measure
Another critical element for the future of the market is that the provisional government act must be examined and approved by the National Congress within a deadline of 120 days. Otherwise, it will cease to be in effect. However, so far the competent Joint Committee of Congress has not been formed, nor have its chair and rapporteur been appointed. This delay adds yet another factor of uncertainty for businesses in the sector, as the fate of the ban now depends both on the legal judgment of the Supreme Federal Court and on the decisions of the legislative body. The coming period is expected to be critical for the Brazilian betting market, as it will be clarified whether the ban can be maintained constitutionally and whether it will secure the required parliamentary approval.
G.K.
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