Brazilian Court Backs Loterj’s Gambling Authority
### Key Points at a Glance
– A Brazilian court has affirmed the authority of Loterj, the lottery regulator of Rio de Janeiro.
– Loterj-licensed operators are exempt from the new nationwide licensing requirements.
– The decision strengthens the role of state-level regulation in Brazil and promotes the independence of individual states.
###
The Court’s Decision: Loterj Retains Control
The Federal Regional Court of the 1st Region in Brazil has ruled that Loterj, the lottery authority of Rio de Janeiro, will maintain sole oversight of sports betting and online gambling within the state. An appeal by Brazil’s Attorney General’s Office (AGU), which sought to impose a nationwide accreditation requirement on Loterj-licensed operators, was dismissed. As a result, operators holding a Loterj license can operate without interference from federal regulations.
###
Nationwide Licensing Requirements Suspended
Previously, Brazil’s Ministry of Finance issued a regulation mandating all betting operators to apply for a nationwide license by September 30, 2024. The goal was to centralize control over advertising and unregulated platforms. However, the court’s decision exempts Loterj-licensed operators from this requirement, provided they comply with the regulations of the state of Rio de Janeiro.
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The ruling is based on a landmark 2020 Supreme Federal Court decision that declared nationwide monopolies on lottery regulation unconstitutional. This decision allowed individual states to establish their own regulatory frameworks, as Loterj has done under Federal Law No. 13,756/2018.
###
Conditions for Loterj Licenses
In April 2023, Loterj implemented its own licensing system. Operators are required to pay a one-time fee of 5 million BRL (approximately 830,000 USD) and remit 5% of their revenue for up to five years. Additionally, operators must meet tax obligations. The court emphasized that the nationwide regulations violated Law No. 13,756/2018, which protects existing legal frameworks.
###
Impact on the Gambling Industry
The decision has been hailed by industry representatives as a victory for state-level regulation. It strengthens Loterj’s position and enables the regulator to continue its operations in Rio de Janeiro. At the same time, Loterj is working to establish itself on a national level and challenge federal restrictions such as GPS-based betting limits and bans on interstate activities.
This development highlights the growing importance of state-regulated betting markets in Brazil. Regional authorities are gaining influence as the federal gambling policy continues to evolve.
###
Our Assessment
The Brazilian court’s decision is a significant step in bolstering state-level regulation in the gambling sector. It demonstrates that regional authorities like Loterj are capable of operating independently and effectively. For operators, this translates to greater legal certainty at the state level. However, it remains to be seen how tensions between state-level and federal regulations in Brazil will unfold. This dynamic could shape the country’s entire gambling market in the long term.
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