In response to new federal betting regulations, the Brazilian government implemented significant changes in September with the introduction of Normative Ordinance No 1,475. This ordinance allowed only operators who had already applied for a federal betting license and were actively operating to continue doing so until the official launch of the regulated market on January 1, 2025. The deadline for submitting license applications passed on September 30, prompting a wave of last-minute submissions from businesses hoping to remain compliant.
A total of 182 applications were submitted via Brazil’s Sigap betting management system by the deadline. However, one submission, from Tecnologia e Desenvolvimento Ltda, was entered after the deadline, leaving it potentially vulnerable to the upcoming regulations.
Concerns Raised by State Lottery-Licensed Brands
The new federal rules sparked concerns among operators licensed under state lotteries like Loterj, the Rio de Janeiro State Lottery. These brands worried about their ability to continue operating beyond the October 1 deadline without a federal license. Fortunately for them, a ruling from Brazil’s Supreme Federal Court (STF) on October 1 provided a crucial exemption, protecting Loterj operators from the consequences of missing the federal deadline.
Federal judge Antônio Cláudio Macedo da Silva criticized the federal regulations for conflicting with Loterj’s Accreditation Notice 001/2023. This notice, which permits accredited entities to operate public lottery services for up to five years, was deemed incompatible with the federal ordinances regarding the advertisement and banning of unlicensed betting websites.
Loterj Operators Exempt from Federal Regulations
According to the court’s injunction, Loterj license holders retain “broad and unrestricted rights” to continue offering fixed-odds online betting. This exemption applies as long as their bettors are in Rio de Janeiro. The court found that the federal ordinances extended beyond the scope of federal jurisdiction and interfered with the regulatory authority of Brazil’s states. In his ruling, Judge Macedo da Silva stated that the ordinances violate Law No 13,756/2018, which supports the legality of previous legal acts, thus protecting Loterj operators from federal restrictions.
This decision was largely influenced by a previous ruling in 2020 that declared the federal monopoly on lotteries unconstitutional. The ruling permitted individual states and federal districts to establish their own lotteries, subsequently allowing operators in states like Rio de Janeiro to run sports betting under state licenses.
Previous Court Decisions Shape the Current Landscape
The STF’s 2020 ruling had already set a precedent for state-run lotteries like Loterj, deeming the federal lottery monopoly unconstitutional. Sports betting, which falls under the broader category of lottery games in Federal Law No 13,756/2018, has since been allowed under Loterj state licenses. This gave operators within Rio de Janeiro and other regions like Paraná the ability to offer sports betting under local jurisdiction.
Local legal experts, including Eduardo Carvalhaes and Karen Coutinho from Lefosse, expressed confidence that state-licensed operators would remain unaffected by the new federal restrictions. They explained that operators authorized under state licenses, such as Loterj, should continue their operations unhindered, even as unlicensed betting sites face new federal limitations.
Federal Injunction Secures Loterj’s Rights
In the days leading up to October 1, Loterj filed a lawsuit in federal court to prevent the blocking or banning of sportsbooks authorized within Rio de Janeiro. This legal challenge, aimed at the Ministry of Finance’s Prizes and Betting Secretariat, sought to overturn federal Ordinances No 1,225, 1,231, and 1,475, which imposed strict rules on advertising and site operation for unlicensed operators.
Loterj argued that these ordinances interfered with its regulatory authority by blocking sportsbooks that had not applied for federal licenses. In its writ of mandamus, Loterj emphasized the legality and regularity of its licensees’ operations within Rio de Janeiro, asserting that the federal government lacked the authority to prevent these operators from advertising or continuing to offer services.
Judge Macedo da Silva sided with Loterj, issuing an injunction that suspended the effects of the federal ordinances within Rio de Janeiro. His ruling ensured that Loterj operators could continue offering fixed-odds betting online without the need for dual accreditation from the federal government.
The court’s decision also clarified that bettors must declare that all wagers are placed within the state of Rio de Janeiro for taxation and legal purposes. With this ruling, Loterj operators can continue advertising their services and sponsoring events across Brazil, free from the penalties imposed by federal regulations.
Source:
“Loterj gets injunction in defense of ‘Bets’ operating in Rio without requesting a federal license“, gamesbras.com, October 1, 2024.