Supreme Federal Court (STF) Minister André Mendonça issued a preliminary ruling on Thursday, stating that bets accredited by Loterj can only operate within the territory of Rio de Janeiro. He mandated the use of geolocation mechanisms and gave five days for the decision to be enforced.
The decision was made regarding the Original Civil Action No. 3,696, which directly impacts the sports betting sector in Brazil. The preliminary injunction suspends provisions of the Accreditation Notice No. 01/2023, which relaxed territoriality criteria for lottery operations, and reinstates the obligation of geolocation systems.
Mendonça determined that Loterj must refrain from performing new acts that allow the provision of services by companies accredited to the Rio de Janeiro lottery outside the limits of Rio de Janeiro. Until now, companies licensed by the agency could offer bets throughout Brazil, since the consolidation of the bets takes place on the central server of Loterj, in Rio de Janeiro.
The companies licensed by Loterj operate even without federal authorization, although some are also licensed by the Secretariat of Prizes and Bets (SPA) of the Ministry of Finance. They could act due to a preliminary decision obtained by Loterj at the Federal Court of the Federal District.
State lotteries can accredit bets, but only within their territorial limits. The Loterj Accreditation Notice did not provide for geolocation mechanisms, arguing that the bettor's consent was sufficient, and that the realization of the bets would be considered carried out in Rio de Janeiro.
"Clearly, this is a mechanism for the State to exceed its territorial competence. By doing so, the State of Rio de Janeiro invades the competence of other States (and Federal District) and, mainly, undermines the competence of the Union", said the minister, in the decision.
The regulated market throughout Brazil came into effect this Wednesday (1), after the companies authorized by the SPA paid the concession fee of R$ 30 million and met all the technical requirements demanded by the federal government. In Rio de Janeiro, the concession fee is R$ 5 million, while the variable grant is 5% over the GGR, against 12% charged by the Union.
Source: GMB
