The Supreme Court of Brazil states that Rio de Janeiro must follow orders and suspend businesses that have yet to adopt geolocation restrictions on their online gambling services
The judgement was upheld by Supreme Court Justice André Mendonça who issued a ‘preliminary injunction’ that prohibits Rio’s state lottery, Loterj, from issuing licenses that can operate alongside the federal Bets framework.
Mendonça’s decision was grounded in the legislative texts that federal rule takes prevalence over state power when it comes to national gambling, with states having the authority and responsibility to limit such operations within their territorial limits.
Following the injunction, Loterj was ordered to incorporate geolocation tools and restrictions into its licenses within a five-day period.
The decision was then immediately appealed by Loterj, which explained that it found the ruling unfair due to the short notice given for compliance assurance, and the negative impact it would have on a total of 25 licensed operators, including Serie A Brasileiro sponsors like PixBet and Esportes da Sorte.
After the STF denied the initial appeal, Loterj filed a second one in which it argued that there were technical and financial difficulties in the way of the expeditious implementation of the geofence tools. The state lottery asked for the deadline to be extended to 180 days.
However, the appeal was once again rejected by the court on Friday (Jan 24), with Mendonça stating that other state lotteries like the one of Paraná (LOTTOPAR) successfully managed to incorporate the geolocation system in the period they were given initially.
He added: “According to the federal entity, other states, such as Paraná, acting through LOTTOPAR, implemented the georeferencing mechanism, thus making it possible to comply with the mandates provided in the preliminary decision.”
Loterj was again given five days to comply with the ruling, and suspend every license holder that does not have a geolocation system in place.
Otherwise the court cautioned that the lottery is facing daily fines of BRL 500,000 (£68k), and a BRL 50k (£6.9k) penalty for its president Hazenclever Lopes Cançado.
The case will be further looked at a preliminary meeting in mid-February.