The new ordinance, published in the Rio de Janeiro Official Gazette (DORJ) on Thursday (13 February), may have finally brought an end to the long-running court battle between Loterj and the federal government.
After the attorney general’s office (AGU) filed a request back in October, on 2 January supreme federal court (STF) minister André Mendonça passed a preliminary decision to ban Loterj licensees operating beyond Rio de Janeiro state borders throughout Brazil.
Additionally, the decision mandated the reintroduction of geolocation tracking to ensure Loterj-licensed brands were only operating within Rio de Janeiro.
Has Rio lottery conceded defeat?
Loterj saw a couple of appeals turned down and it now appears to have conceded defeat with the publication of Ordinance Loterj/GP No 658.
Article 1 of the ordinance orders Loterj-licensed brands to immediately halt operations outside of Rio de Janeiro state borders. It also mandates the use of geolocation tracking to make certain they stick to the restrictions.
Article 2, meanwhile, immediately bans the operation of lotteries and online games from Loterj-licensed companies that cannot prove the adoption of geolocation measures.
Signed by Loterj president Hazenclever Lopes Cançado, the ordinance will remain in force for as long as Mendonça’s preliminary decision lasts.
What happens now?
Today, a trial will begin in the virtual plenary of the STF on Mendonça’s injunction, lasting until next Friday (21 February).
Loterj is facing widespread opposition, including from the Brazilian Institute of Responsible Gaming (IBJR). Last week IBJR requested to join the STF case against the state lottery as “amicus curiae”, believing it has useful information to add to the process.
Such information includes the IBJR’s belief that, contrary to Loterj’s claims, there is the necessary geolocation tracking technology available to meet the requirements of Mendonça’s ruling.
Big blow for Loterj
When Loterj licensees were able to operate throughout Brazil, the state regulator claimed to have the “best cost-benefit” ratio on online betting licences.
A federal betting licence costs BRL30 million (£3.9 million/€4.7 million/$4.8 million) for a five-year term. Loterj authorisation for the same period costs just BRL5 million. Federal licensees also face a tax rate of 12% on gross gaming revenue (GGR), substantially higher than the 5% rate applied to Loterj licensees.
However, even when the nationwide operation of Loterj licensees was allowed, specialist betting lawyer Udo Seckelmann of Bichara e Motta Advogados was still hesitant to advise operators to apply for a Loterj licence rather than the federal alternative.
“Before people came to me to be their lawyer and said, ‘I want to get a licence in Brazil’ and I’d say, ‘Okay, there’s a federal licence in which you can offer to the whole country. That’s the good way to go,’” Seckelmann told iGB. “And they said, ‘No, but I heard something about a state licence which would give me the same rights, and at the same time would be cheaper.’
“And I said, ‘Look, you are correct, but at the same time, we don’t know what’s going to happen in a few months or in a few years about this.’ So it’s a legal uncertainty.”
Original article: https://igamingbusiness.com/legal-compliance/loterj-ordinance-halting-nationwide-activities/
