The Supreme Federal Court has upheld a preliminary restriction preventing operation outside of Rio.

Brazil.- The Supreme Federal Court (STF) has confirmed that gambling operators licensed by the Rio de Janeiro state lottery Loterj cannot offer online gambling, sports betting or lottery outside of the state. The court has upheld a preliminary injunction issued by Justice André Mendonça in October, which would appear to bring an end to the matter as Loterj has now lost two appeals.

In 2023, Rio preempted the regulation of online gambling in Brazil at the federal level by granting its own five-year licences. However, the national government lodged Civil Action No. 3,696 arguing that state licences have no standing in the rest of Brazil.

When the federal regulated online gambling framework began in January, Loterj-licensed operators were ordered not to take bets outside of Rio and were given five days to apply geolocation blocks to prevent operations in other states. Loterj claimed that this was too little time, and it continues to argue that it has the right to issue licences covering the whole federal territory.

However, Loterj says that on February 13 it complied with the Supreme Court’s order and suspended online gambling and lottery services available outside of the state of Rio de Janeiro. Justice André Mendonça had warned that Loterj could face a daily fine of R$500,000 and a fine of R$50,000 per day for its president, Hazenclever Lopes Cançado if it failed to comply.

Meanwhile, the Brazilian federal gambling regulator, the SPA, has been ordered to issue seven more provisional licences for the country’s newly regulated online gambling market. The companies had taken legal action after the SPA failed to process their applications in time for the market launch.

By the time regulatory framework for online gambling in Brazil came into effect on January 1, the SPA had approved 71 of the 144 licence applications that it had received by an August deadline that guaranteed a decision by launch. However, some companies had still not received a response.