Brazil Supreme Court Restricts Loterj to State Borders

Imagine a state lottery trying to operate nationwide, only to be stopped by the highest court. Brazil’s Supreme Court has ruled that Loterj cannot issue gambling licenses outside Rio de Janeiro. Learn how this decision impacts Brazil’s gambling industry and ensures fair competition. Read on to understand the implications of this landmark ruling and what it means for operators.

Brazil Supreme Court Shuts Down Loterj’s National Licensing Ambitions

Key Points:

1. Brazil’s Supreme Court confirms Loterj cannot license operators outside Rio de Janeiro.
2. The ruling upholds federal regulations and protects fair competition in the gambling market.
3. Loterj has suspended all online gambling services offered beyond its state borders.

Brazil’s Supreme Federal Court (STF) has delivered a decisive blow to the Rio de Janeiro State Lottery (Loterj). The court confirmed that Loterj cannot issue gambling licenses outside its state borders. This ruling upholds a preliminary injunction by STF Justice André Mendonça, who argued that Loterj’s nationwide expansion violates federal regulations.

The decision was supported by a majority of seven STF Justices. It effectively prohibits Loterj from licensing lottery and electronic gaming activities beyond Rio de Janeiro. The ruling aligns with the Attorney General’s Office (AGU), which challenged Loterj’s authority to license companies for nationwide betting services.

The AGU filed the case on 11 October 2024, arguing that Loterj’s actions undermined Brazil’s federative structure. They also claimed it disrupted fair competition and infringed on the federal government’s exclusive authority over lotteries. With the Supreme Court’s decision, Loterj licensees are now restricted to offering bets exclusively within Rio de Janeiro.

To ensure compliance, geolocation tracking will be required for all Loterj licensees. Earlier this month, Loterj officially complied with the Supreme Court’s decision. They suspended all online gambling and lottery services offered outside Rio de Janeiro. This move marks a significant shift in Brazil’s gambling landscape, reinforcing the importance of federal oversight.

In a separate development, Brazil’s federal gambling regulator, the Secretariat of Prizes and Betting (SPA), held a virtual public hearing. The hearing aimed to shape its 2025-2026 regulatory agenda. Open for consultation until 27 March, the session gathered over 200 participants. They raised concerns about responsible gambling and illegal betting.

SPA secretary Regis Dudena emphasized that feedback will help refine regulatory priorities. A final report is set for release on 4 April. Dudena noted that participants’ suggestions aligned with the SPA’s goals. He highlighted the need for B2B certification in Brazil’s regulated market.

Last month, the SPA notified 22 banking and payment institutions for providing financial services to illegal betting websites. This action underscores the regulator’s commitment to curbing illegal gambling activities. It also highlights the challenges of enforcing compliance in a rapidly evolving market.

The Supreme Court’s ruling on Loterj and the SPA’s regulatory efforts reflect Brazil’s commitment to a fair and transparent gambling industry. By upholding federal regulations, the court has set a precedent for state-level operators. This decision ensures that the federal government retains control over nationwide gambling activities.

The Brazil Supreme Court’s ruling against Loterj marks a pivotal moment for the country’s gambling industry. By restricting Loterj to state borders, the court has reinforced federal authority and ensured fair competition. Meanwhile, the SPA’s efforts to refine regulations and combat illegal betting demonstrate a proactive approach to industry oversight. Together, these developments pave the way for a more regulated and transparent gambling market in Brazil.

Operators and stakeholders must adapt to these changes, ensuring compliance with federal regulations while contributing to a responsible and sustainable industry.