Supreme Court blocks Rio lottery from offering online gambling outside state

The Federal Supreme Court (STF) has formed a majority to endorse the precautionary measure by Minister André Mendonça, which prohibited the State Lottery of Rio de Janeiro (Loterj) and the state of Rio de Janeiro from exploring lottery activities and electronic games outside its state territory and from licensing companies to operate in other locations.

In a judgment conducted in a virtual plenary session that began on the 14th and concludes this Friday (21st) the ministers accepted the position of the Attorney General’s Office (AGU), arguing that by credentialing companies to operate nationally, Loterj undermines the federal pact and free competition, disregards the rules set by the Ministry of Finance, and encroaches on the Union’s authority by exploring lottery services throughout the national territory. The civil action (Ação Cívil Originária – ACO) 3696, with a request for a preliminary injunction, was filed by the AGU on October 11, 2024.

In the injunction granted on January 2, 2025, in addition to prohibiting Loterj from exploring lotteries outside the state of Rio de Janeiro, Minister André Mendonça also decided to suspend the effectiveness of the amendment to the licensing notice No. 1/2023, which softened the territorial oversight mechanisms for the exploration of lotteries in the form of fixed-odds sports betting.

The agency was required to demand that the operators licensed by it utilize electronic geolocation mechanisms to ensure that bets are truly made only from Rio de Janeiro. This system must guarantee that bets originate solely from the state of Rio de Janeiro and block bets from other regions.

In the vote submitted to the virtual plenary to confirm the injunction, Mendonça recalled that, as a central political entity, it is the Union’s responsibility to explore public services of national—and even international—scope. “States are responsible for exploring public services with state-level scope or interest,” he noted.

The rapporteur cited law No. 14.790 of 2023, which states that “the commercialization and advertising of lotteries by States or the Federal District carried out in physical, electronic, or virtual means will be restricted to individuals physically located within their jurisdictions or those domiciled within their territorial limits.”

The minister also pointed out that the amendment referenced in Credentialing Notice No. 01 of 2023, stating that “the declaration and consent of the bettor will always be considered as making the online bets within the territory of the State of Rio de Janeiro,” creates a kind of “fiction about the expanded territorial limits of the State of Rio de Janeiro.” Therefore, according to the rapporteur, by doing this, the State of Rio de Janeiro has encroached on the authority of other states and, more importantly, undermines the Union’s competence, as noted in the decision that granted the injunction.

Loterj has already announced that it would prevent bets made by licensed operators outside its state borders. The announcement was published in the state’s official gazette. The ordinance reinstates the “use of electronic geolocation mechanisms . . . in order to ensure that the bets are made exclusively within the territorial limits of the State of Rio de Janeiro.”

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​The Federal Supreme Court (STF) has formed a majority to endorse the precautionary measure by Minister André Mendonça, which prohibited the State Lottery of Rio de Janeiro (Loterj) and the state of Rio de Janeiro from exploring lottery activities and electronic games outside its state territory and from licensing companies to operate in other locations….
The post Supreme Court blocks Rio lottery from offering online gambling outside state appeared first on G3 Newswire.