The Federal Supreme Court (STF) has decided that states can explore lotteries, expanding models and competition in the sector. Bodó (RN) adopted a simple and inexpensive licensing for national bets, but faces legal uncertainty after a decision against Loterj, which had its operations limited to RJ. In an article for Poder360, Udo Seckelmann and Pedro Heitor de Araújo, from Bichara e Mota Lawyers, say that the moment calls for caution and attention to the STF's movements.
The Federal Supreme Court (STF), when jointly judging ADPFs 492 and 493 and ADI 4986, established the understanding that, although the Union has exclusive competence to legislate on lottery services, the States have material competence to explore them.
In light of this new paradigm, the federative entities began to regulate the public service of fixed quota bets, either through direct management or by delegation to the private sector, which expanded the regulatory space and fostered the diversification of models, driving a competitive dynamic among them.
It was in this context that, in October 2024, the municipality of Bodó, in Rio Grande do Norte, published a notice of accreditation for operators of fixed quota bets. Inspired by the pioneering experience of Loterj, Bodó adopted a licensing model marked by simplicity and accessibility.
With a grant fee of only R$ 5,000 – substantially lower than the R$ 5 million required by Loterj and the R$ 30 million established by the Secretariat of Prizes and Bets of the Ministry of Finance –, the municipality established itself as an economically attractive alternative compared to the federal model.
Besides the accessible conditions, Bodó replicated Loterj's strategy by allowing the commercialization of bets beyond its borders, enabling operation throughout the national territory, which aroused great interest in part of the market, materializing with the accreditation of 38 companies so far.
This strategy reignited the heated debate about the limits of the material competence of the federative entities in the exploration of fixed quota bets, placing the small municipality of Bodó at the epicenter of discussions about the future regulatory framework of the sector in the country.
It is important to highlight that this debate recently acquired new contours when the STF, when examining the conflict between Loterj and SPA, issued a preliminary decision in Civil Action No. 3.696, in which it recognized that the permission granted by Loterj for its companies to operate nationally constituted an extrapolation of its material competence, invading the sphere of attributions of the Union and affronting the principles of free competition and federative balance.
Although the effects of this decision are restricted to the parties involved (inter partes) in the litigation, an environment of evident legal insecurity for similar initiatives, such as that of Bodó, has materialized. With the recent notification issued by SPA and the prompt response of the municipality to reaffirm the constitutionality of its action, a scenario approaches in which the federal regulator not only questions judicially the validity of the model adopted by Bodó, but also blocks the websites of the operators accredited in its municipal scope.
In this panorama, the companies accredited in Bodó find themselves in a situation of legal insecurity, as they may be forced to interrupt their national operations in the near future, compromising their positioning in the sector.
The current scenario, marked by the apparent imminence of new federative conflicts, points to the need for pacification of the legal understanding by the STF, consolidating the probable thesis that the federative entities can only explore bets within their respective geographical limits, using technological mechanisms, such as geoblocking, to prevent bets from being made outside their jurisdictions.
For operators and investors, the moment is one of strategic caution and heightened attention to the movements of the STF, which will shape the future of the betting market in the country. Certainly, this confrontation promises to impact the sector and define the rules of competence among the federative entities in the coming years.
Udo Seckelmann
Lawyer and head of the betting and crypto department at Bichara e Motta Lawyers, professor at CBF Academy and master in international sports law by the Instituto Superior de Derecho y Economía, in Madrid (Spain). Writes for Poder360 monthly on Wednesdays.
Pedro Heitor de Araújo
Law student at PUC-RJ and has been working in the areas of crypto & gambling at Bichara e Motta Lawyers since 2022. As an analyst, researcher, and enthusiast, he is dedicated to the legal dynamics related to the regulation of crypto assets, DeFi (decentralized finances), bets, and games. He has taken courses in DeFi and non-fungible tokens (NFTs) at the University of Nicosia (Cyprus).
