The Federal Regional Court of the 2nd Region (Rio de Janeiro and Espírito Santo) granted an injunction to Kambi, the largest sports betting platform in the world, allowing it to operate without sanctions under a state decree that regulates the market.
The decision of the 27th Federal Court of Justice in the capital Rio de Janeiro was made in a writ of mandamus filed by Kambi and will remain in force until a decision is made on the merits of the case by the Union.
Union wins dispute against State of Rio in the betting sector
The company turned to judicial authorities after the Rio de Janeiro state gambling regulatory agency, Loterj, initiated administrative proceedings against the company.
But Kambi questions Provincial Decree No. 48,806, promulgated on November 21, 2023, which establishes the conditions for the study of lottery formats.
The platform states in its petition that the state government asked Anatel to block the gaming site due to this regulation.
Loterj is prohibited from carrying out due diligence in the administrative process until further analysis
According to the decision of federal judge Geraldine Pinto Vital de Castro, Loterj is prohibited from carrying out any action in the administrative process and the process must be suspended until further analysis by the court.
The reason is that the Constitution of the Republic states that “it is the exclusive competence of the Union to legislate on union and lottery systems”. Therefore, the judge highlighted that the regulation of this activity is currently established by Federal Law No. 14,790, of 2023.
The judges recalled that, in May 2024, the Ministry of Finance’s Secretariat for Prizes and Bets regulated the provisions of the law through regulations that establish standards for business activity in this area in Brazil. So, the deadline for sports platforms to comply with the rules is December 31st of this year.
“Currently, federal regulations require that the authorization of commercial use of lotteries through betting involves the following categories: legal qualification, financial and labor regularity, suitability, economic-financial qualification and technical qualification,” wrote judge Geraldine De Castro.
Therefore, taking this into consideration, she understood that Decree 48,806/2023 “exceeds the limits of the State’s competences and violates the Federal Agreement by seeking to regulate this market and impose sanctions”.
