With the rectification made to its public announcement, the Rio de Janeiro State Lottery (Loterj) established a regulation for betting in the state, as reported by Yogonet, where it left a loophole allowing companies to operate at the state level but accepting customers from all over Brazil.

This measure ended up being a nationwide regulation, thus causing the reaction of the Federal Government, which challenged the resolution and could take the case to court. The regulation allows companies in the sector to accept clients from outside Rio de Janeiro, with the only requirement that the bettor accepts that the bet was placed within the borders of the State.

Hazenclever Cançado, president of Loterj

Also, the conditions established in Rio de Janeiro provide other benefits to betting operators. First, the license to operate in the State is BRL 5 million ($1,016,935), compared to the BRL 30 million ($ 6,101,610) required by the Federal Government. In addition, taxes are also lower, at 5% of gross gaming revenues; the Federal Government’s Provisional Measure, on the other hand, establishes a tax of 18% on GGR.

The correction made by Loterj was made last July 26, just one day after the national government sent to Congress the Provisional Measure from which it seeks to regulate sports betting throughout Brazil.

The Provisional Measure, currently in Congress, must be voted on within 120 days of its enactment, otherwise, a bill will have to be submitted within that period. This would mean that everything would go back to zero, delaying the long-awaited definitive regulation of gambling.

For its part, appealing to Law 6.259/1944, which establishes that “the federal lottery will have free circulation throughout the country’s territory while state lotteries will be restricted to the limits of the respective State”,  Caixa, which operates the sector at the federal level, sent a challenge to Loterj, alleging that the change in the regulation could cause damage to the federal lottery market.