Loterj filed a preliminary exception request against the action promoted by the Attorney General of the Republic regarding the jurisdiction of state licenses.
Brazil.- The Rio de Janeiro State Lottery (Loterj) filed a preliminary exception request against the action of the Attorney General of the Republic (AGU) which asked the Supreme Federal Court (STF) to prohibit the operation of online betting houses nationwide for companies authorized by the Municipality of Rio de Janeiro.
The document submitted by the AGU requests the granting of a precautionary measure to immediately enforce the prohibition of exploring the activity outside Rio de Janeiro.
In the document, Loterj argues that there is no probability of right, because the Union has not been able to demonstrate that its alleged right is sufficiently clear. "The territorial jurisdiction of Loterj is supported by precedents from the STF itself, which recognize the autonomy of the states to explore lotteries and regulate them within their scope, as is this case. Moreover, the fact that the rectification of the notice includes a formal declaration from the bettors who play in the territory of Rio de Janeiro, only demonstrates that Loterj is taking measures to maintain the territoriality of its operation, subjecting the bettors to its direct jurisdiction, which weakens the argument of violation of territoriality."
The Authority also argues that the inclusion of the express declaration in the notice that online bets will be considered made in the State of Rio de Janeiro ensures respect for the territorial limit.
"Article 35-A of Law No. 13.756/2018, amended by Law No. 14.790/2023, authorizes states to explore lottery modalities within their territories. Loterj, with the inclusion of an express declaration in the notice that online bets will be considered made in the State of Rio de Janeiro, to ensure respect for the territorial limit. In this way, Loterj is complying with the legislation, as the notice provides for the control of state jurisdiction, albeit through a criterion of formal declaration. And the choice for explicit declaration-consent is a normative choice that is not explicitly prohibited by the legislation at the time of the act performed and perfected; and that, moreover, was still preserved by a subsequent norm on the application of the law over time," argued Loterj.
In the presentation, Loterj defends itself from the accusation of money laundering by the AGU and cites the measures adopted to prevent criminal practice.
According to the lottery, the AGU, in its petition, makes very serious and unfounded accusations about the supposed increase in the risk of money laundering resulting from the actions of Loterj. "Such accusations not only lack factual support, but completely ignore the rigorous control and prevention measures established in the Accreditation Notice No. 001/2023" and mentions that it has implemented a robust money laundering prevention system, in full compliance with the best international practices and current legislation, with actions such as identification and verification of clients, monitoring of transactions, reporting of suspicious activities, betting limits, traceability of transactions, staff training, risk assessment, and payment of bets only via PIX.
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"It is important to highlight that it is precisely the conduct of the Union that has created an environment conducive to illicit practices, including money laundering" and mentions that the list of "authorized" sites through the publication of a "positive list" that contains 114 sports betting companies "supposedly authorized to operate in Brazil. This action not only directly violates articles 10 and 11 of Law 14.790, which require formal authorization for their operation, but also creates a dangerous precedent of tacit authorization in a sector that demands strict regulation," added Loterj.
