The format defined by Loterj (Rio de Janeiro Lottery) has caused discomfort in states and in the Lula (PT) government. The Ministry of Finance informed Folha that it is evaluating measures to be adopted, but so far nothing concrete has been done.
The department headed by Fernando Haddad commands the process of federal regulation of the betting market. This is an effort observed since last year amid the government's attempt to obtain revenue in a billion-dollar market.
In the middle of last year, the government issued a provisional measure that was later converted into law, with the general guidelines for the accreditation of betting houses and taxation rules.
The offer of sports betting sites has been available in Brazil since 2018, after a law approved by the Michel Temer (MDB) government. From then on, betting advertisements began to dominate open TV, especially during football games. Social media was flooded with announcements.
The government of Jair Bolsonaro (PL) had four years to regulate the market but did not do so. Thus, the number of betting houses aimed at the Brazilian public exploded without clear rules of operation and supervision.
A 2020 decision by the STF (Supreme Federal Court) gave impetus to the operation of state lotteries, which are also advancing in the online betting format. Rio, which has had a lottery since 1975, and Paraná are the most advanced in this type of accreditation. States like Paraíba and Maranhão are also ahead of schedule.
In 2020, the STF consolidated the understanding that states and municipalities can explore lotteries, based on two actions that questioned the Union's exclusivity in this service. The actions did not deal exclusively with online betting, but with modalities regulated by the federal government — thus, exploitation by states can occur as long as the limits placed by federal legislation are observed, which, since 2018, accepts online betting.
As it deals with the rights of federated entities, the territoriality of the activities is highlighted in the vote of the rapporteur in the STF, Minister Gilmar Mendes, whose position was followed by the court. "It seems correct to me to infer that state (or municipal) legislation that establishes lotteries in their territories only convey material competence that was granted to them by the Constitution", says the vote.
The five companies accredited in Paraná only operate in the state's territory and maintain georeferencing locks for users. But this does not happen with the houses in Rio.
Today, the companies Apostau.com, Bestbet, Marjosports and Pixbet are accredited. Three others are currently undergoing accreditation: 1XBet, Lema and Laguna. The state has a deadline for new accreditations, which ends at the end of this month.
To be accredited in Rio, companies pay a grant of R$5 million (US$ 1m), in addition to percentages on bets. In the federal process, this value is R$30 million (US$ 6m).
"Loterj maintains dialogue with all spheres of the public and private sector, in addition to control bodies, valuing a federative and democratic environment," said, in a statement, the Rio lottery. The body is headed by lawyer Hazenclever Lopes Cançado, with history of work with politicians from Bill, the party of Rio governor Claudio Castro and also of former president Bolsonaro.
In the notice that accredited the companies, Rio predicted that bets must only inform that betting operations are carried out in the state, without any geolocation lock for bettors. The elimination of the territorial restriction was carried out by amending the notice.
The notice was released in April 2023 and the rectification took place on July 26 last year. One day after the federal government issued the provisional measure that was later converted into law.
Rio ignored questions about this and other points, including from Caixa Econômica Federal. "This rectification [which eliminated the principle of territoriality] implies legal uncertainty and violates the applicable legislation, which restricts the possibility of operating state lotteries to the territory of the respective State," argued Caixa, in a request for objection.
In its denial against the measure, Loterj argued that it prioritized the revenue potential. "The State, in the figure of Loterj, when rectifying the Notice, observes the constitutional principle of efficiency (art. 37), which, in this case, is important to obtain the greatest revenue for the treasury," defended Loterj at the time. The government predicted annual revenue of R$213 million (US$ 42.6m) from online sports betting.
To Folha, Caixa stated that the exploration of games must observe the territory. "The bank is committed to complying with the regulatory standards established for the sector and to guaranteeing the legality and safety of betting activities carried out in the country," says the note. Caixa also expressed prior interest to the Ministry of Finance in authorization to operate sports betting.
Rio's position is seen as having the potential to destabilize the market in the process of regulation, causing judicialization and fiscal war, according to people who participate in the process within the government and also linked to companies seeking to become accredited. In recent months, the Ministry of Finance received representatives from nine states who complained about the release that Rio allowed.
The president of the Brazilian Institute of Responsible Gaming, André Gelfi, says that the situation generates apprehension among companies, but, after the approval of the law, this became something secondary in the sector.
"The law stipulates that the autonomy of the states is statewide. If there is some practice that does not comply with the law, everyone draws their own conclusions. I cannot detail the implications, but it is something that violates federal law."
"If the states and the Union don't get their act together, the situation will end up going to the Supreme Court again," says lawyer Caio de Souza Loureiro, who works in this area at Tozzini Freire Advogados.
Politicians from the center have been putting pressure on the Ministry of Finance to have some control over the betting house accreditation processes. The pressure led by the president of the Chamber Artur Lira (PL-AL) and the Minister of Sports, André Fufuca (PP-MA), was crucial for the dismissal of José Francisco Manssur from Finance.
He was tipped to take over the new Betting secretariat created within the ministry. The secretariat does not yet have a head.
Lira was contacted and, through his advisor, reported that he had no knowledge of the matter. The Ministry of Sports indicated that there was no pressure regarding positions and regulations.
According to the department's executive secretary, Antonio Vogel, the ministry must work together with the Treasury in authorizing companies, will not have resources from lotteries other than through the Budget and will be responsible, above all, for sports integrity actions to mitigate cases of manipulation of results.
The new legislation deals with so-called fixed odds bets, in which it is known how much it is possible to win with a bet (based on the results of a football game, for example). During the bill's processing in the Chamber, deputies included, in addition to sports betting, online games that include casinos and other games of chance in a virtual environment. It is estimated that up to 80% of the sector's turnover comes from this type of activity.
The full regulation should be finalized this semester. During this period, companies based outside the country continue to offer online betting in Brazil.
Source: Folha
