The Supreme Federal Court (STF), when jointly judging ADPFs 492 and 493 and ADI 4986, established the understanding that, although the Union has exclusive authority to legislate on lottery services, the States have material authority to operate them.
In light of this new paradigm, the federative entities began to regulate the operation of the public fixed-odds betting service, whether through direct management or through delegation to the private sector, which expanded the regulatory space and encouraged the diversification of models, driving a competitive dynamic between them.
It was within this context that, in October 2024, the municipality of Bodó, in Rio Grande do Norte, published an accreditation notice for fixed-odds betting operators. Inspired by the pioneering experience of Loterj, Bodó adopted a licensing model marked by simplicity and accessibility.
With a concession fee of only R$5,000 (US$865) – substantially lower than the R$5 million (US$865,000) required by Loterj and the R$30 million (US$5.2m) established by the Secretariat of Prizes and Betting (SPA) of the Ministry of Finance –, the municipality consolidated itself as an economically attractive alternative compared to the federal model.
In addition to the accessible conditions, Bodó replicated Loterj's strategy by allowing the sale of bets beyond its borders, enabling operations throughout the national territory, which sparked great interest in part of the market, resulting in the accreditation of 38 companies to date.
This strategy has reignited the heated debate on the limits of the material jurisdiction of federative entities in the exploration of fixed-odds betting, placing the small municipality of Bodó at the epicenter of discussions on the regulatory future of the sector in the country.
It is important to highlight that this debate recently acquired new contours when the STF, upon examining the conflict between Loterj and SPA, issued a preliminary decision in Original Civil Action No. 3,696, in which it recognized that the permission granted by Loterj for its companies to operate nationwide constituted an extrapolation of its material jurisdiction, invading the sphere of attributions of the Union and violating the principles of free competition and federative balance.
Although the effects of this decision are restricted to the parties involved (inter partes) in the dispute, an environment of evident legal uncertainty has materialized for similar initiatives, such as that of Bodó. With the recent notification issued by SPA and the municipality's prompt response in reaffirming the constitutionality of its actions, a scenario is approaching in which the federal regulator not only questions in court the validity of the model adopted by Bodó, but also blocks the websites of accredited operators within its municipal scope.
Given this scenario, companies accredited in Bodó find themselves in a situation of legal uncertainty, since they may be forced to cease their national operations in the near future, compromising their position in the sector.
The current situation, marked by the apparent imminence of new federative conflicts, points to the need for pacification of the legal understanding by the STF, consolidating the probable thesis that federative entities can only explore bets within their respective geographic limits, through the use of technological mechanisms, such as geoblocking, in order to prevent bets from being made outside their territorial jurisdictions.
For operators and investors, this is a time for strategic caution and increased attention to the STF's moves, which should shape the future of the betting market in the country. This confrontation certainly promises to impact the sector and define the rules of jurisdiction between federative entities in the coming years.
Udo Seckelmann
Lawyer and head of the betting and crypto department at Bichara e Motta Advogados, professor at CBF Academy and master in international sports law from the Instituto Superior de Derecho y Economía, in Madrid (Spain). He writes for Poder360 monthly on Wednesdays.
Pedro Heitor de Araújo
Law student at PUC-RJ and has worked in the crypto & gambling areas at Bichara e Motta Advogados since 2022. As an analyst, researcher and enthusiast, he is dedicated to the legal dynamics related to the regulation of crypto assets, DeFi (decentralized finance), betting and games. He took courses in DeFi and non-fungible tokens (NFTs) at the University of Nicosia (Cyprus).
