Loterj appeals court ruling to ban licensees operating across Brazil
The Rio de Janeiro State Lottery (Loterj) has formally appealed the Federal Supreme Court’s (STF) ruling prohibiting its licensed operators from accepting bets beyond the borders of Rio de Janeiro. The state regulator contends that this decision could severely hinder tax revenue and disrupt the burgeoning regulated betting landscape within Brazil.
On January 2, STF minister André Mendonca issued a preliminary ruling concerning Original Civil Action No. 3,696, a case initiated by the Attorney General’s Office (AGU) in October 2024. This legal action stems from ongoing tensions between Loterj and the federal government regarding the state lottery’s effort to extend its licensed operations across the entirety of Brazil.
Loterj asserts that its 2023 regulations—specifically Accreditation Notice 01/2023—were designed to facilitate nationwide public lottery services for its licensees. However, Mendonca’s decision has suspended critical provisions of this notice. It mandates that Loterj’s operators reintroduce geolocation tracking to ensure that bets are strictly confined to the state of Rio de Janeiro.
Following this ruling, Loterj was granted a mere five days to halt its national activities and implement geolocation measures.
Nevertheless, Mendonca’s ruling also allows Loterj to challenge the STF’s decision. Consequently, on January 3, Loterj filed an appeal aimed at suspending the order temporarily.
Potential Consequences of the STF Ruling
Loterj issued a press release on January 3, articulating the potentially damaging effects of Mendonca’s ruling on its licensed operators and the reintroduction of geolocation tracking. The regulator highlighted that suspending provisions outlined in Accreditation Notice 01/2023 could lead to millions in compensation claims, a notable reduction in tax revenues for the federal government, and the risk of destabilizing Brazil’s newly established regulated betting market, which commenced operations on January 1.
Additionally, Loterj placed considerable blame on the federal government for the ongoing legal strife. The regulator criticized the federal authorities for their failure to address increasing gambling activities expected in the latter half of 2025, despite rising public concerns regarding the flourishing black market within the nation.
Loterj maintains that the extensive delay from the National Congress’s initial approval of online betting legislation in November 2018 to the final ratification by the Chamber of Deputies in December 2023 has exacerbated the prevalence of illegal gambling sites, leading to documented adverse effects—issues highlighted in numerous prominent reports from Brazil’s Central Bank and Santander.
“Loterj argued that its efforts to regulate the sports betting sector arose as a necessary and justifiable response to the federal government’s inaction, which permitted the timeline outlined in Law 13.756/2018 (the federal gambling legislation) to expire without adequate federal regulation,” the statement read.
The Necessity of Contract Reevaluation
According to BNL Data, part of Loterj’s rejection of the ban relates to the necessity of modifying contracts with existing licensees. The enforcement of geolocation tracking presents a significant challenge, as some state-licensed enterprises may struggle to comply within the five-day timeframe mandated by the ruling.
In light of these complications, Loterj is advocating for the immediate suspension of Mendonca’s ruling, seeking to maintain its current agreements with licensed operators until a final resolution of AGU’s Original Civil Action No. 3,696 is reached.
This preliminary injunction is scheduled for review in the STF plenary session between February 14 and 21, where it will undergo a critical debate via a virtual assembly.
