The Brazilian Institute of Responsible Gaming (IBJR) has requested to join the Supreme Federal Court (STF) case against the Rio de Janeiro State Lottery (Loterj), claiming it is possible for Loterj licensees to implement geolocation tracking.
The dispute between Loterj and the federal government continues to rumble on following STF minister André Mendonça’s preliminary decision to ban Loterj licensees from operating throughout Brazil.
Loterj licensees are prohibited from accepting bets beyond Rio de Janeiro state borders. Geolocation tracking was brought in to ensure brands were adhering to the restrictions.
Whereas a federal betting licence costs BRL30 million (£3.9 million/€4.7 million/$4.8 million) for five years, Loterj authorisation for the same period is just BRL5 million. Additionally, the tax rate for federal licensees is 12% of gross gaming revenue (GGR), significantly higher than the 5% charged under a Loterj licence.
Loterj has since seen a number of appeals turned down, citing the presence of “defects, omissions, obscurities and material errors” in the ruling. It went on to claim the technology was not available to implement geolocation tracking.
However, the IBJR has asked to join the STF case as “amicus curiae”, translated from Latin as “friend of the court”, believing it has relevant information to offer the process.
The IBJR says Loterj licensees do in fact have access to geolocation tracking technology. The state regulator’s request for an 180-day extension to the initial five-day deadline to bring in the technology is unnecessary, it claims.
The STF has warned failure to comply will result in Loterj being fined BRL500,000 a day as long as the breaches continue.
Loterj president warns of “unfair competition”
The Loterj president Hazenclever Lopes Cançado has previously warned the STF’s ban throws the stability of the newly regulated Brazil online betting market into doubt.
“Legal uncertainty in Brazilian betting exposes legal weaknesses, unfair competition and bureaucracy that hinders the market and harms the economy,” Cançado wrote in an article for Migalhas.
“Unfair competition in the betting market in Brazil haunts entrepreneurship, weakens the national economy and has the support not only of informal [illegal] operators, but of the public administration itself, which systematically fosters legal uncertainty and, thus, encourages clandestinity.”
Loterj claims its licensees have paid over BRL100 million in taxes to the federal government, with these contributions risked by the STF’s ruling, while also warning the potential for companies based in tax havens to benefit.
Cançado explained: “The union itself, using creationism and its own wickedness, with the endorsement of the judiciary, provides a truly hostile environment for legalised bets, especially because it makes the rules stricter for those within the country, while countless players based in tax havens and in China, immune to Brazilian law, continue to operate without submitting to the same competitive conditions, operating freely in the country without collecting federal, state and municipal taxes, even representing tax evasion.”
