Brazil's Supreme Court ruling forces Loterj to halt nationwide betting operations

The State Lottery of Rio de Janeiro (Loterj) has issued an ordinance suspending all betting operations beyond the state’s borders following a Supreme Court ruling by Justice André Mendonça. The new directive, published in the State Official Gazette on February 13, reinstates geolocation tracking to ensure betting activities remain within Rio de Janeiro.

Loterj had been attempting to overturn Mendonça’s decision since January, but multiple appeals were denied, leading to the enforcement of daily fines of R$500,000 (US$87,000) for non-compliance. Loterj President Hazenclever Lopes Cançado also faces a personal fine of R$50,000 (US$8,700) per day if the order is not followed.

The Supreme Court’s ruling stemmed from a lawsuit by the Attorney General’s Office (AGU), which argued that Loterj’s licensing model undermined federal oversight and posed risks to responsible gaming and financial stability. The newly issued ordinance (Loterj/GP No. 658) mandates that all licensed operators immediately cease operations outside Rio de Janeiro or risk suspension.

Operators must prove compliance with geolocation tracking measures to continue their activities, as failure to do so could lead to additional penalties. Before the Supreme Court’s intervention, Loterj licensees could operate nationwide with significantly lower fees and tax rates compared to federally licensed operators.

Legal experts had warned that Loterj’s model carried risks due to its uncertain legal standing, making it a risky alternative to federal accreditation. The Brazilian Institute of Responsible Gaming (IBJR) has expressed concerns over Loterj’s approach and recently sought to join the Supreme Court case as an “amicus curiae.”

The Supreme Court is set to conduct a virtual trial on the matter until February 21, which could determine whether Loterj regains the ability to expand its licensing model.