The Rio de Janeiro State Lottery (Loterj) has formally appealed a Federal Supreme Court (STF) ruling that prohibits its licensed operators from accepting bets outside the state of Rio de Janeiro. The decision, issued by STF Minister André Mendonça on January 2, has triggered concerns about its potential impact on Brazil’s tax revenue and the newly regulated betting market.
The ruling arose from a legal dispute between Loterj and the federal government, centering on Loterj’s Accreditation Notice 01/2023, which aimed to authorize its licensees to provide lottery services nationwide.
Minister Mendonça’s decision suspended provisions of the notice, mandating that Loterj reinstate geolocation tracking to restrict betting activities to Rio de Janeiro’s borders. Loterj was given five days to comply.
However, Loterj swiftly responded with an appeal on January 3, seeking to overturn the ban and prevent further disruptions to its operations.
In a press release issued the same day, Loterj warned about the potential fallout from the STF ruling, including substantial compensation payments to licensees, significant reductions in tax revenue, and instability in Brazil’s regulated betting market. The new Brazilian regulated market, launched just days earlier on January 1, is expected to generate substantial economic benefits.
Loterj criticized the federal government for its role in the ongoing dispute, pointing to delays in implementing comprehensive gambling regulations. While the National Congress approved online betting legislation in November 2018, the final regulatory framework was only established in December 2023.
According to Loterj, this delay allowed unregulated gambling platforms to thrive, contributing to public concern over the black market and gambling-related harms.
“Loterj also states that its action in regulating the sports betting sector in its territory was a necessary and legitimate response to the inaction of the Union, which allowed the deadline established in Law 13.756/2018 (federal gambling laws) to elapse without due federal regulation,” Loterj asserted in its statement.
The STF ruling also poses logistical challenges for Loterj and its licensees. The immediate requirement to enforce geolocation tracking could compel a renegotiation of existing contracts, a process that may face resistance from state-licensed operators. Some companies may struggle to comply with the five-day implementation period, further complicating Loterj’s operations.
Loterj has urged the STF to suspend the effects of Mendonça’s decision while awaiting a final resolution of the federal government’s Original Civil Action No. 3,696, filed in October 2024.
Minister Mendonça’s injunction is scheduled for a referendum during a virtual STF plenary session between February 14 and 21. The outcome of this session will determine whether Loterj’s appeal has merit and whether its licensees can resume operations beyond Rio de Janeiro’s borders.
Original article: https://www.yogonet.com/international/news/2025/01/07/91027-loterj-appeals-supreme-court-ban-on-accepting-bets-beyond-rio-de-janeiro
