Brazil’s online gambling market faces critical test in Supreme Court

Sankunni K December 24, 2024

SiGMA news

The impending launch of Brazil’s regulated online gambling market, scheduled for January 1, 2025, faces significant uncertainty as a series of legal challenges play out in the country’s Federal Supreme Court (STF). With five cases currently under review, the stakes for Law 14.790 and its related provisions are exceedingly high, as highlighted in a .

Major cases under review

Among the five cases, three aim to overturn the legislation entirely, potentially halting the federal licensing regime. In mid-November, the STF held a two-day public hearing on two of these cases, where stakeholders presented their arguments. Adding further weight to the issue, the Prosecutor General of the Republic (PGR), equivalent to Brazil’s Attorney General, filed a constitutional challenge during the hearings. While the presiding judge refrained from fully enjoining Law 14.790, immediate restrictions were imposed on gambling advertisements and measures were mandated to prevent welfare recipients from gambling.

Another pending case stems from May 2024, where seven Brazilian states, including São Paulo, challenged specific provisions of the law. Justice Luiz Fux, in October, suspended certain clauses that prohibited operators from acquiring multiple state-level licenses or advertising across state borders. The implications of these rulings could significantly impact the market structure, as state-level operations might circumvent federal oversight.

Perhaps the most contentious case involves Rio de Janeiro’s state lottery. Under a 2023 decree, the lottery authorised state-licensed operators to accept bets from players across Brazil and internationally, provided betting systems were located in Rio, and transactions occurred under players’ legal consent. The federal government’s October lawsuit before the STF argues this contravenes Law 14.790’s restrictions, posing a threat to the new federal regime.

The outcome of these legal disputes will shape the trajectory of Brazil’s online gambling sector. As Vixio notes, “The stakes in the Rio case are particularly high,” with the potential to undercut federal licensing by creating alternate, less costly licensing routes.