The decision covers sports betting and online games. Other lottery activities provided for under Brazilian law are not included in the ban.
With the measure now in force, betting platforms are immediately prohibited from accepting new deposits for gambling purposes.
Users who still have money in their accounts will be able to request withdrawals until 11:59 p.m. on October 5.
From October 6, betting websites and apps must go offline in Brazil. The Government plans to activate blocking mechanisms to prevent access to the platforms within the country.
Between October 7 and 8, companies will be required to identify any remaining balances in users’ accounts and report the amounts to financial institutions.
Refunds are expected to take place between October 9 and 14.
In cases where banks are unable to return the money directly to bettors, Caixa Econômica Federal is expected to handle the payments.
The measure also bans advertising for “bets”. Existing advertising contracts and promotional materials must be withdrawn by October 5.
The Government also announced stronger enforcement against platforms that attempt to continue operating illegally, involving several public institutions.
Measures are also expected to be introduced to make it harder to transfer money to illegal betting companies and to identify platforms attempting to bypass the restrictions.
At the same time, Lula sent a bill to Congress proposing penalties for anyone who operates or promotes illegal betting websites.
Industry representatives criticised the decision and warned that some bettors could move to unregulated platforms.
However, the companies said they intend to comply with the rules while considering possible legal action.
The Provisional Measure takes effect immediately but must still be considered by the National Congress. To remain valid, it must be approved within up to 120 days.