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IBJR criticises Loterj over sports betting licenses

By - 1 April 2024

The Brazilian Institute of Responsible Gaming (IBJR) has issued a statement outlining its stance regarding the regarding the recent conflict involving the Ministry of Finance and the lottery of the state of Rio de Janeiro (Loterj).

The IBJR has criticised the actions of Loterj in a statement saying that: “Requiring bettors to declare that their bet is placed in the State of Rio de Janeiro, regardless of their domicile or actual location, makes no logical or legal sense.”

In addition it criticised the agency for adopting grant license fees that are significantly different from those established by the Federal Government as it generates tension over  the beginnings “of a possible ‘fiscal war’ between the federative entities – which, consequently, increases levels of legal uncertainty to the detriment of the entire sector.”

The IBJR argues that while “the States have material competence to explore lottery activities and regulate such exploration, it is evident that state legislative/regulatory activity must adhere to the national guidelines established by the Union (and, consequently, cannot contradict them).”

According to The IBJR the actions taken by LOTERJ “create disorder, raise unnecessary doubts, and harm the regulation process of the fixed-odds betting industry in Brazil.” Not only that but they “jeopardize the effectiveness of the legal framework consolidated by Federal Law No. 14,790/23 and bring legal uncertainty to the market, creating a negative environment for businesses and for the planning of operators who wish to apply, according to the law, for authorization to operate regularly in the Brazilian territory.”

The statement comes after The Ministry of Finance informed Loterj that it should not allow sports betting accredited at a state level to accept players from all over Brazil. According to local media Loterj has been given fifteen days to respond. If no adjustment is made to state legislation then the Ministry could take judicial or administrative action.

However Loterj responded that the online products it sells do not exceed territorial limits according to rules already laid out by Brazil’s Supreme Court (STF) as the bettor must agree to declare that “the bet is placed, for all purposes, in the State of Rio de Janeiro.” The state authority confirmed that it had received the letter from the Ministry of Finance and that the document “will be analyzed and responded to.” It also pointed out that Loterj is “not subordinate to the Ministry of Finance.”

Loterj  has authorized four online betting platforms to operate across Brazil, Apostau.com, Bestbet, Marjosports, and PixBet, sparking controversy within the Ministry of Finance. Four more licences are being processed: 1xBet, Lema, Laguna and Caesars Sportbook/Big Brazil.

Crucially Rio de Janeiro has not imposed any geographical restrictions on these licensed sites, enabling them to operate nationwide. In addition the state is offering lower licensing fees and tax rates for operators wishing to operate in the state. In February it was revealed that The Federal Government feared a potential clash among different states as they seek to attract bettors and generate revenue for state coffers.

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