Minister André Mendonça, of the Federal Supreme Court (FSC), ordered the Rio de Janeiro State Lottery (Loterj) to implement measures within five days. The objective is to prevent accredited companies from accepting online bets outside the state.
Non-compliance could result in a daily fine of R$500,000 for Loterj and R$50,000 for the entity’s president.
At the beginning of January, Mendonça had already suspended a rule in the Loterj notice that exempted the use of geolocation in betting. The rule allowed the bettor’s declaration to be sufficient to consider that the bet was made within the territory of Rio de Janeiro.
Decision reinforces territorial limits on the operations of companies accredited with Loterj
Minister Mendonça stated that the rule violated Federal Law 13,756/2018, which regulates sports betting and limits the companies’ operations to the states where they were accredited. He called the practice a “legal fiction”, claiming that it weakens oversight and makes it difficult to control lottery activities.
Loterj, in response, presented practical difficulties in implementing geolocation and requested a longer period to comply with the decision, suggesting 120 days. Furthermore, the entity requested additional guidance to enable compliance with the injunction.
In his response, Mendonça highlighted that the original determination was clear in requiring georeferencing to ensure that bets respect territorial limits. In other words, he reinforced that the Judiciary does not have an advisory role to guide technical issues, delegating this responsibility to the market.
“The Judiciary (and the Federal Supreme Court) is not a consultative body”, stated the minister. He also warned that non-compliance with federal legislation could lead to the suspension or even definitive cessation of gaming exploitation.
Fines and the future of state betting
The FSC‘s decision puts pressure on Loterj to comply with the territoriality requirement. Therefore, for the growth of online platforms, the use of geolocation is essential to respect state and federal legislation.
Therefore, the case highlights the challenges states face in adapting to a growing market while respecting federal laws. Therefore, the sector, which generates billions, needs clear rules to operate safely.
See the decision in full below:
