On this Friday (24), Supreme Federal Court (STF) Minister André Mendonça rejected the new appeal from Loterj against the suspension of sports betting services outside the state of Rio de Janeiro. He gave a 5-day deadline for the lottery to comply with the judicial decision that restricts operations. In case of non-compliance, the organization and its president, Hazenclever Lopes Cançado, will have to pay a daily fine of R$ 500,000 and R$ 50,000, respectively.
Mendonça also denied Loterj's request for the opening of diligence and supplementation of the decision with additional guidelines. The lottery had requested that guidelines on the scaling of deadlines and institutional collaboration to facilitate compliance with the decision be included.
Loterj appealed again to the Supreme after the denial of the first appeal by the minister. The lottery claims there was an omission in the previous decisions by Mendonça and stated it was having difficulties in complying with the decision that ordered the use of electronic geolocation mechanisms.
This Friday, Mendonça stated that the issues raised had already been addressed in the initial decision and in the previous declaration of embargo response. Thus, the requests from the lottery did not alter the legal conclusion about the case.
The minister is the rapporteur of the original civil action (ACO) 3696, filed by the federal government against Loterj. The Attorney General's Office (AGU) argues to the Court that the lottery invades federal competence by exploring lottery service nationwide. On January 2, Mendonça accepted the Union's request, in a precautionary decision, and restricted Loterj's operations outside Rio de Janeiro.
Union x Loterj
In April 2023, Loterj launched a notice for the accreditation, lasting up to five years, of lottery operators that operate in fixed quota online sports betting. The notice provided that the interested companies should have a geolocation service, to attest that the bets were being made within the territory of Rio de Janeiro.
In July of the same year, the state autarchy presented a rectification to the notice, excluding the requirement of location monitoring, understanding that “players/bettors access the platforms of the accredited companies and, even if they are not physically in Rio de Janeiro, accept (affirm they agree) that their bets are considered made in the state, since they use a platform accredited by Loterj”.
However, in October 2024, the AGU filed in the STF the ACO with a request for a precautionary measure, alleging that the rectification of the notice violated the state competence of Loterj and the regulation of sports betting. In the action, the federal government argues that Rio de Janeiro has accredited companies to explore lottery services nationwide, invading the competence of the Ministry of Finance to regulate betting operators.
“Loterj has accredited companies to explore the public service of lotteries nationwide, with harmful consequences to the federal pact and free competition, to the detriment not only of the Union but also of other States interested in offering public lottery services”, it argues.
In response, Loterj argued that the rectification does not aim to regulate betting operators nationwide and that the AGU's interpretation “does not have the power to characterize national exploitation by Loterj, which does not exist”.
According to the state autarchy of Rio de Janeiro, the Union intends to suspend a condition that, at the time of the notice, was in accordance with the legislation in force. Loterj argues that the AGU's action is based on an “offense to a law that did not even exist when the notice and its rectification were published".
In the decision of January 2, Minister André Mendonça states that, as a central political entity, the competence to explore public services with national character or extension is exclusive to the Union.
He cites as an example the passenger transport system: “In the case of interstate and international transport, the ownership and competence to explore this public service, as even already stated by this Court, is of the Union. Municipalities are responsible for providing local public transport service. States have the competence to explore the service of interurban passenger transport, respecting their territorial limits”, he considers.
At the time, the magistrate granted a preliminary injunction to suspend the rectification to the accreditation notice of Loterj. Furthermore, he determined that, within five days, the autarchy cease the exploration of operator activities outside the territorial limits of the State of Rio de Janeiro.
Source: Jota
