Te latest state to give sports betting and other types of lotteries the green light is the state of Tocantins. In February Governor Wanderlei Barbosa, officially authorized the operations of the Tocantins State Lottery (Lototins). Te project involves planning, installing, operating, and maintaining state lottery units across all 139 municipalities in the state, aiming to increase financial revenue while generating new jobs and promoting social projects, particularly in the sports sector.
rumblings that the issue could well end up in the Supreme Court. Dario Durigan, Executive Secretary of the Ministry of Finance, proposed the creation of a new Working Group within the council to discuss state regulations for sports betting arguing that collaboration among federal entities was vital to maintain the integrity of sports betting and safeguard state revenues. “Te establishment of a fragmented regulatory environment could lead to harmful competition among states,’ he warned. Ten as predicted in October 2024 the case reached the STF
when the Attorney General of the Union (AGU) filed a lawsuit in the STF aiming to prohibit Loterj from authorizing online sports betting at a national level. Te action claimed that, in practice, Loterj was accrediting companies to operate the service nationally, which has harmful consequences for federal agreements and free competition. Furthermore, this national activity goes against the regulations of the Ministry of Finance and infringes upon the Union’s authority to operate lottery services throughout the national territory. Te suit mentioned that states like Paraná and Maranhão required the use of geolocation mechanisms for conducting lottery services. Te request also included an immediate cessation of the
activity by companies accredited by Loterj outside the territorial limits of the State of Rio de Janeiro and mandated the use of electronic geolocation mechanisms. A technical note from the Prize and Betting Secretariat of the
Ministry of Finance, included in the case, clarified that the national operations of those licenses granted by Loterj function as an incentive for predatory competition among states, akin to a fiscal war. Te action also requested a preliminary injunction to immediately halt the exploitation of this activity outside the state of Rio de Janeiro. To drive its point home even further the AGU also argued that Loterj had lax rules concerning the prevention of money laundering and the financing of terrorist actions. In January the Minister of the STF André Mendonça
Brazil: Te Challenges
prohibited Loterj from operating lottery and online gaming activities outside the state of Rio and from licensing companies to operate in other locations. According to the minister, allowing bets outside its state borders negatively impacted the jurisdiction of the Union and other states. Loterj appealed but this was denied later that same month.
Mendonça, determined that Loterj comply, within five days. Te minister further determined the payment of a daily fine of R$500 thousand to Loterj and R$50 thousand to the president of the lottery if they failed to comply with the decision. Te pressure finally yielded results and in February Loterj announced that it would stop bets made by licensed operators outside its state borders, following a new regulation (Loterj/GP No. 658) published in the state’s official gazette. Te ordinance reinstates the “use of electronic geolocation mechanisms . . . in order to ensure that the bets are made exclusively within the territorial limits of the State of Rio de Janeiro.” Te ordinance also mandates the immediate cessation of
operations by accredited companies that fail to implement effective measures for compliance. Companies must demonstrate adherence to these requirements promptly, or risk suspension of their licences and penalties.
PROBLEMS IN OTHER STATES Rio de Janeiro is not the only state to encounter problems with the launch of its sports betting and lottery offerings. Other states have experienced considerable obstacles in getting their own sanctioned projects off the ground. In August 2022, the State Department of Finance of Mato Grosso do Sul began credentialing legal entities to operate lottery products under the State Lottery of Mato Grosso do Sul - Lotesul. Tis process was divided into four batches covering different
types of games, allowing one operator per 2 million residents, including foreign applicants. Te government planned to establish a Superintendency of Lottery for oversight, with a revenue allocation of at least 12 per cent for royalties and 5 per cent for fixed quota sports betting. A study projected R$ 9.8
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