Currently, only five bookmakers are licensed in Rio: Apostou RJ, BestBet, MajorSports, Rio Jogos and PixBet, which together, as of last month, had paid out more than R$2.3 billion in prizes to bettors, according to the Loterj.

The Attorney General's Office of the Union (AGU) on Monday appealed the injunction of the Federal Regional Court of the First Region (TRF1), which ordered the blocking of more than 100 online bookmakers in Rio, arguing that the companies needed authorisation from the Rio de Janeiro State Lottery (Loterj) to operate locally. In the document, the AGU argues that the regulation of the gambling market falls under the competence of the federal government.

In 2023, Loterj published an accreditation notice, which established a set of rules for online gambling operators to operate in the state, upon payment of a R$5 million subsidy, plus 5% per month of the Gross Gambling Revenue (IBG), the turnover minus the prizes paid to players.

The amount is much lower than the R$30 million subsidy set by the Ministry of Finance, which is working to regulate the market. The tax levied on the GGR will also be higher by federal standards, at 12%.

While other states are following suit and creating internal rules for companies in the market, Rio is the only one that accredits platforms to operate in other parts of the country.

This leaves room for companies to opt for local regulation and pay a lower fee, rather than requesting authorisation from the Secretariat of Prizes and Gambling (SPB), which is linked to the Ministry of Finance.

Under the government's plan, online gambling operators will be able to continue operating until 31 December, the deadline for applying for authorisation and demonstrating compliance with the requirements set by laws and ordinances. The regulated market will come into effect on 1 January 2025.

Loterj said that the regularised operation contributes to public revenues. According to Loterj, for every R$1 collected by the State in taxes, about R$8 is collected by the Federal Government. "We hope that the Ministry of Finance will define as soon as possible the rules of operation in the country so that the states and the Union can act cohesively in favour of responsible gaming in the country," he concluded in a statement.

What gambling sites and industry bodies are saying

André Gelfi, director-president of the Brazilian Institute of Responsible Gambling (IBJR), says the episode challenges the authority of the federal government and fosters legal uncertainty. For him, the case harms a sector that is consolidating and has the prospect of collecting more than one billion reais in operator licenses alone.
"This decision weakens the sector and threatens the effectiveness of the framework consolidated by the law created last year and by the recent ordinances of the Ministry of Finance, which determine that all operators have until the end of this year to obtain their operating licences.

"Preventing hundreds of companies from operating in RJ creates a case of unfair competition that has only eroded the gambling market in Brazil, driving away serious companies wishing to invest in the country. The institute has no legal standing to appeal the TRF1 decision, but we encourage our members to do so if they wish.

In a statement, the National Association of Gaming and Lotteries (ANJL), which represents sites such as PagBet and BetNacional, argued that Anatel's notification leaves millions of players without access to more than a hundred gambling platforms overnight. It also said the measure violates basic legal principles, such as the right to a full defence and the right to an adversarial trial. According to the organisation, the sites are being blocked without the companies having been heard, either in court proceedings or by Anatel. 

For Magno José Santos, president of the Brazilian Legal Gambling Institute, which represents physical gambling but follows the movements of the online sports betting market, the impasse between the states and the federal government will have to be resolved: "This dispute, which is taking place at the federal and state level, creates great legal uncertainty. Entrepreneurs who want to invest in Brazil and apply for a licence are insecure because of the lack of definition of what the states and the federal government can do".