Brazil vs. Rio de Janeiro in iGaming licensing

Attorney General's Office Files Action Against Loterj in Brazilian Supreme Court

The Attorney General's Office (AGU) has filed a lawsuit with the Brazilian Supreme Federal Court (STF) seeking to prevent the Loteria do Estado do Rio de Janeiro (Loterj) from allowing licensed online sports betting companies to operate nationwide. AGU has requested an injunction to immediately suspend such activities outside Rio de Janeiro.

Issues with Loterj's Betting System

The AGU argues that Loterj's regulations fail to restrict online betting to Rio de Janeiro. It highlights significant flaws, such as the absence of an effective geolocation system, which allows Loterj to expand its operations beyond state borders. This practice threatens the federal pact, the Ministry of Finance's guidelines, and national competitiveness.

The AGU also points out that other states, like Paraná and Maranhão, impose geolocation requirements for lottery operations, ensuring equity among states.

Threat to National Competitiveness

The AGU warns that Loterj's national reach creates a risk of predatory competition among states, potentially leading to a regulatory "tax war." This would undermine cybersecurity, financial integrity, and anti-money laundering efforts.

Moreover, the AGU states that Loterj has not established the necessary regulations to comply with the Anti-Money Laundering Law. The Financial Activities Control Council (Coaf) has raised concerns that Loterj's territorial model could make each state a gambling hub, increasing the risk of financial crimes.

Loterj's Response

On October 13, Loterj filed a preliminary objection against AGU's action, arguing that the AGU has failed to provide sufficient proof of its claims.