Dispute Between Ministry of Finance and LOTERJ Sparks Tension in Brazil's Gambling Sector

Additionally, LOTERJ is applying different tax values and rates than those established by the Federal Government, raising concerns about a possible "tax war" between states and increasing legal uncertainty in the sector.

The Brazilian Institute of Responsible Gaming (IBJR) has become aware that LOTERJ has sent letters to companies requesting the immediate cessation of operations for platforms allegedly operating irregularly in Rio de Janeiro without a license granted by LOTERJ. Non-compliance with these requests has led to the opening of sanctioning administrative proceedings, contested by the IBJR.

While states have the competence to exploit lotteries as a public service, legislation on the subject remains exclusively under federal jurisdiction. Therefore, the IBJR reminds that Federal Law establishes that the Ministry of Finance will establish conditions and deadlines for companies to adapt to the provisions of the law.

LOTERJ's actions generate disorder and unnecessary doubts, harm the regulation process of the betting industry in Brazil, and create legal uncertainty in the market. The IBJR deems LOTERJ's stance of allowing fixed-odd betting operators licensed by them to offer services to consumers anywhere other than Rio de Janeiro as illegal. Furthermore, the IBJR supports the Ministry of Finance's demand to address LOTERJ's questionable activity, as this could hinder the authorization process for betting operators at the federal level and undermine the progress made in the National Congress and the Federal Government for the regulation of this significant sector of the economy.