The Supreme Federal Court (STF) Justice André Mendonça has reaffirmed that the Lottery of Rio de Janeiro (Loterj) must adhere to the court’s ruling requiring the suspension of gambling operators that have failed to adopt geolocation measures restricting their customers to Rio de Janeiro.
The latest decision solidifies earlier directives and underscores the federal government’s commitment to ensuring compliance with state and national regulations.
Loterj faces significant penalties for non-compliance, with the company subject to a daily fine of R$500,000 (€80,470), and its president personally liable for an additional daily fine of R$50,000 if they fail to meet the five-day deadline stipulated by the court. The Attorney General’s Office (AGU), which initiated the legal proceedings, has emphasized the importance of enforcing the court’s decisions, citing Loterj’s repeated attempts to delay implementation.
This development follows months of legal disputes between Loterj and the federal government concerning the company’s licensing practices. Loterj had been accused of licensing gambling operators to offer services on a national scale, a practice deemed outside its jurisdiction. Justice Mendonça reiterated that while states hold the authority to regulate lottery activities, this power is limited to their territorial boundaries and remains subject to federal regulations established by the Union.
In his statement, Justice Mendonça clarified: “States have the authority to operate lottery activities and to regulate such operations exclusively within their territorial limits. And, in exercising these material and regulatory powers, States are subject to the normative discipline that may be established by the Union in the exercise of its exclusive powers.”
The dispute dates back to a ruling on January 2, 2025, in which the STF barred Loterj from licensing operators to provide gambling services nationally. The court also mandated the implementation of geolocation systems to enforce compliance.
The AGU highlighted successful geofencing mechanisms adopted by other state lotteries as evidence of the feasibility of Loterj meeting these requirements.
Recent developments have added urgency to the matter. On January 26, the Attorney General of Paraná State presented a report to the STF indicating Loterj’s ongoing failure to comply with the court’s injunction. Paraná’s Attorney General proposed increasing financial penalties to accelerate compliance, suggesting a $50,000 daily fine in addition to existing sanctions.
The case has drawn significant attention in Brazil’s gambling and regulatory sectors, serving as a key test of the balance between state and federal powers. As the January 27 deadline for compliance approaches, industry observers and government officials alike are closely monitoring Loterj’s response.
