Another twist in Loterj/federal government battle as trial suspended

The ongoing legal conflict in Brazil involving the Rio de Janeiro State Lottery (Loterj) and the federal government has recently taken a significant turn, as the Supreme Federal Court (STF) has temporarily suspended the trial that seeks to solidify a ban on Loterj’s operations across the nation.

The protracted dispute over the operational scope of the Rio de Janeiro lottery operator, Loterj, initially appeared to favor the federal government. In early January, STF Minister André Mendonça issued a preliminary ruling prohibiting the state-regulated lottery from operating beyond the borders of Rio de Janeiro.

Following the STF’s dismissal of Loterj’s appeals, Mendonça’s preliminary injunction was scheduled for a vote in a virtual session of the STF plenary, set for February 14 to 21. However, during the proceedings, the trial began with three votes leaning toward upholding Mendonça’s ruling. Nonetheless, Minister Dias Toffoli requested a review on February 18, resulting in a preliminary suspension of the trial.

This suspension means that Mendonça’s injunction remains in effect, thereby restricting Loterj licensees from operating outside of Rio de Janeiro. Furthermore, geolocation tracking measures will be implemented to ensure compliance, allowing them to cater only to local bets. Minister Toffoli has a 90-day window from February 18 to bring the case back to the court.

Loterj: Facing Significant Challenges

Steps toward resolving the ongoing conflict between Loterj and the federal government moved forward on February 13, when Loterj issued an ordinance to suspend its nationwide operations. This ordinance was published in the Rio de Janeiro Official Gazette and reinstated geolocation tracking measures for its licensed entities.

Signed by Loterj President Hazenclever Lopes Cançado, the ordinance will remain in effect for the duration of Mendonça’s preliminary decision, illustrating Loterj’s willingness to comply with the current legal framework.

Loterj’s position is increasingly precarious, facing substantial opposition from the Brazilian Institute of Responsible Gaming (IBJR). The IBJR has sought to participate in the STF proceedings against the state lottery as an “amicus curiae,” arguing that its expertise would provide valuable insights into the case.

Among the IBJR’s contributions is its assertion that the necessary technology for effective geolocation tracking is indeed readily accessible and can easily meet the specifications outlined by Mendonça’s ruling. This claim underlines the importance of technological compliance in the evolving landscape of the gambling industry, particularly as regulators prioritize responsible gaming measures and consumer protection.

As the legal battle continues, the outcome will not only shape the future of Loterj but may also influence broader regulatory frameworks for gambling in Brazil, prompting stakeholders to closely monitor developments within this ongoing situation.