The legality of online sports betting in Brazil has generated new discussions. The Attorney General’s Office (PGR) spoke to the Federal Supreme Court (STF) about an action by the Attorney General’s Office (AGU). This action seeks to prohibit the Rio de Janeiro State Lottery (Loterj) from authorizing online bookmakers across the country.
The PGR’s statement, which reinforces the request made by the AGU, was presented this Friday (25) at the request of the action’s rapporteur, minister Edson Fachin.
Lack of transparency in the Loterj system
In this scenario, AGU filed the Original Civil Action (ACO 3696) with the STF. The action demands an injunction to prevent bets accredited only by Loterj from operating outside the state of Rio de Janeiro.
According to the AGU, current legislation limits the exploration of betting activities to regional operations. In other words, the Union alone has control over lottery services across the country.
AGU argues that Loterj allows bettors to declare that their bets are made in Rio de Janeiro. However, there is a lack of a reliable geolocation system that proves the origin of these bets.
Therefore, what happens, in practice, is that this release allows companies to operate at a national level. The AGU statement also cites specific examples.
States such as Paraná and Maranhão require geolocation mechanisms to be implemented before authorizing the operation of lottery services.
Thus, this requirement is an attempt to ensure that the rules of competition remain fair and equitable between the federal states.
Impacts of relaxing betting rules
The PGR aligns itself with the AGU in stating that easing these territorial restrictions could lead to a federative imbalance. A technical note from the Secretariat of Prizes and Bets (SPA) of the Ministry of Treasury states that Loterj’s criteria represent a “perverse incentive to predatory competition”.
This perspective suggests that, by allowing national action, Loterj would be creating an environment similar to a ‘fiscal war’ between states.
Additionally, the PGR highlights that Loterj’s actions could generate negative repercussions on inter-state relations, compromising the harmony of the lottery system in Brazil.
Minister Fachin will assess the impact of this decision by carefully analyzing the AGU’s injunction request. The resolution could redefine how the Union and states will regulate and monitor these activities.
