Brazil state lotteries challenge SPA use of bet.br as legal status

Analome, The National Association of Municipal and State Lotteries for Brazil,  has outlined its frustrations at the determinations of Ordinance SPA/MF 566 authorised  by the Secretariat of Prizes and Betting (SPA) from the Ministry of Finance.

The ordinance establishes that only those platforms that use the “.bet.br” domain can be considered as an authorised operator in the betting sector. Analome views this rule as a clear violation of the legal integrity and “free enterprise, endangering the activities of the municipal and state lotteries using other domains”.

The Association mentions that the ordinance do not reflect the current market structure since most state and municipal lotteries exist under different domains. It notes that this restriction poses legal risks to responsible exporters, disadvantages companies that comply with the state and municipal rules and violates the constitutional provisions on free competition and consumer protection.

Analome believes that the measure is against Article 5, Section II of the Federal Constitution, which provides that no one should be permitted to act or refrain from acting without a legal reason.

Camilo Roma de Brito, the president of Analome, shared his concern on the ordinance, saying: “This restriction will not prevent criminal activities. Rather, it creates legal uncertainty and exposes those who are currently operating within the confines of the state and municipal laws.”

Analome is contemplating seeking a writ of mandamus to safeguard state and municipal lottery operators. Brito pointed out that the ordinance is an attempt to create a monopoly in the betting market. He also noted that technical conversation is crucial for the formulation of a proper and efficient regulatory system.

In January, the Rio de Janeiro State Lottery (Loterj) asked for the “.bet.br” domain to be assigned to all the regulated entities in Brazil, not only those holding a federal license but also those with a state lottery license. Loterj‘s application was made after the company engaged NIC.br in meetings and official communication.

The Rio de Janeiro government explained that Brazil’s betting industry has been unregulated since 2018, which has led to the proliferation of illegal operators. According to Loterj, this means that requiring all authorised operators to use the “.bet.br” domain would help consumers know that the company is operating legally in Brazil.

A Rio judgement further deemed that due to the current regulatory void, anyone can operate as a betting agent in Brazil without facing any consequences. Loterj laments that this violates constitutional provisions on free enterprise and free competition, compromises consumer protection under the Civil Framework for the Internet and the Consumer Protection Code, and runs counter to Law no. 12,965/2014, the Civil Framework for the Internet, and Resolution which enshrines network neutrality and a democratic governance of the Internet.

Analome and Loterj consider the ordinance as a threat to fair competition and legal compliance in the betting market. Analome is ready to seek legal remedies while Loterj continues to urge for a proper regulatory framework that would enable all the regulated operators to use the “.bet.br” domain.