SPORTS BETTING
Controversy as Loterj authorises nationwide online betting platforms
By James - 25 March 2024
The Rio de Janeiro State Lottery – (Loterj) has authorized four online betting platforms to operate across Brazil, sparking controversy within the Ministry of Finance, which according to newspaper “Folha de S.Paulo” is reportedly considering legal action against the decision.
Crucially Rio de Janeiro has not imposed any geographical restrictions on these licensed sites, enabling them to operate nationwide. Since November last year, Loterj had been involved in a class action lawsuit regarding the criteria it established for allowing companies to operate in the state. Now The Paraná State Lottery (Lottopar) has filed a petition to be accepted as part of that same action in the State Court of Rio de Janeiro. Lottopar wants to halt Loterj’s bidding process alleging that Loterj is circumventing Brazil’s sports betting laws.
Loterj has granted four licenses: Apostau.com, Bestbet, Marjosports, and PixBet, while 1xBet, Lema, and Laguna are the process of obtaining licenses.
In the lawsuit, Lottopar pointed out that Article 35-A of Law 14,790, which regulates sports betting in Brazil, authorizes States and the Federal District to exploit, within their territories, only the lottery modalities provided for in federal legislation. “This provision, as can be seen, already incorporates the principle of territoriality,” says Lottopar.
However Loterj has defended its actions. “Loterj maintains dialogue with all spheres of the public and private sectors, as well as oversight bodies, valuing a federative and democratic environment,” said the Rio lottery in a statement.
In February local press reported that while the Federal Government has yet to finalize regulations for the online betting market, Rio de Janeiro and Paraná were attempting to take pre-emptive measures by adopting initiatives aimed at increasing revenue and attracting betting companies to their states.
According to Globo these measures include setting values for licensing fees and applying revenue percentages lower than those stipulated in federal legislation. The Ministry of Finance urged governors to wait for the final details of the federal law to be published as The Federal Government fears a potential clash among different states as they seek to attract bettors and generate revenue for state coffers.
In September 2020, the Supreme Court of Brazil (STF) ruled that the federal government’s lottery monopoly was unconstitutional, paving the way for states to develop state lotteries for each of Brazil’s 26 states and one federal district as long as they complied with federal regulations. Sports betting was categorized as “sports lotteries’ in 2018 via Law No. 13,756 which was signed by then President of Brazil, Michel Temer in 2018. It legalised sports betting on a federal level although regulations weren’t put in place over the industry until now. The STF decision meant that states could begin to roll out their own lottery products within their own state borders including sports betting.
