Brazil Supreme Court orders suspension of Rio operators that don’t use geolocation

Brazil Supreme Court orders suspension of Rio operators that don’t use geolocation

Rio-licensed online gambling operators can no longer take bets in the rest of Brazil.

Brazil.- The Supreme Court of Brazil has ordered the Rio de Janeiro state lottery Loterj to suspend any of its online gambling licensees who have not yet implemented geolocation. The move comes after a preliminary injunction ordered Loterj-licensed operators to stop taking bets outside of Rio.

In 2023, Rio preempted the regulation of online gambling in Brazil at the federal level by granting its own five-year licences. However, the national government has lodged Civil Action No. 3,696 arguing that the state licences have no standing in the rest of Brazil. From January 7, Loterj-licensed operators have been ordered not to take bets outside of Rio.

The preliminary injunction must still face a vote at a virtual plenary session in February, after which Loterj can appeal against the decision. In the meantime, Loterj has been ordered to suspend operators that do not impose geolocation.

Loterj appealed against the decision, initially on the grounds of the short notice and then on the basis of technical and financial difficulties. However, its request for the deadline to be extended to 180 days was rejected, with the court arguing that other states including Paraná had implemented geolocation in the given time. The regulator says the move would affect 25 licensed operators, including PixBet and Esportes da Sorte. It could face fines if it fails to uphold the order.

Brazil’s national regulated online gambling market launched on January 1 overseen by the new federal regulator SPA. The SPA granted 71 online gambling licences and gave final approval to 68 ahead of the launch, but some operators already licensed by Loterj didn’t see the need to apply for SPA licences, which cost 30m reales (€4.7m) compared to just 5m for a Loterj licence. The tax rate is higher on federal licences too, at 12 per cent of GGR compared to 5 per cent.

Meanwhile, Plínio Lemos Jorge, president of the Brazilian gaming and lottery industry association, ANJL, has raised concerns that newly licensed operators could end up leaving the fledgling regulated market if more isn’t done to control illegal gambling in Brazil.

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