Rio gambling licensees told to stop taking bets nationally after Supreme Court decision

The state lottery operator has lost its right to issue gambling licences.

Brazil.- Just days after regulated online gambling launched in Brazil at the federal level, operators licensed by Loterj, Rio de Janeiro’s state lottery, have been told to stop taking bets outside of the state. Federal Supreme Court minister André Mendonca has issued a preliminary junction against Loterj in a long-running dispute with the federal government over the right to issue nationwide licences.

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 lodged Civil Action No. 3,696 in an attempt to block the move. The Supreme Court decision means that from 7 January, Loterj-licensed operators will no longer be able to take bets throughout Brazil. They will have to use geolocation tracking to ensure they only accept bets within Rio de Janeiro.

The preliminary injunction must still face a vote at a virtual plenary session between 14 and 21 February, after which Loterj will be able to appeal against the decision.

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.