LOTERJ drops lawsuit against betting operators and ANATEL

On August 07, 2024, the Rio de Janeiro State Lottery (“LOTERJ”) filed a preliminary injunction against the Brazilian Telecommunications Agency (“ANATEL”^[1]), requesting that ANATEL order connection providers to block or suspend the operation of hundreds of betting operators listed by LOTERJ in the lawsuit under discussion.

The betting operators subject to the blockade are those that allegedly have not applied for a state license, under the provisions of Rio Janeiro State Decree No. 48,806/2023^[2].

LOTERJ’s preliminary injunction was rejected at the trial court level, and was partially reversed on appeal to advance the effects of the appeal in^[3] an interlocutory appeal, in order to “authorize ANATEL to verify the operational legitimacy of the companies involved in the complaint (…), against LOTERJ and, otherwise, to take the appropriate measures, within the limits of the State of Rio de Janeiro, to determine that the fixed-odds betting lotteries be suspended”.

Considering that several betting operators had filed motions for clarification and internal appeals against this decision – as did the Brazilian Office of the Attorney General (“AGU”) –, on August 12, 2024, the reporting officer vacated the preliminary injunction filed by LOTERJ on the grounds that betting operators must adjust their operations by December 31, 2024^[4].

On August 20, 2024, shortly after the decision, LOTERJ submitted a statement dropping the primary lawsuit filed against ANATEL.

On August 22, 2024, the 13th Federal Civil Court of the SJDF analyzed LOTERJ’s motion and  discontinued the lawsuit due to LOTERJ’s lack of legitimacy on appeal. This is because the complaint was executed by its president, who is prevented from exercising the law while serving as LOTERJ’S president – despite being a lawyer registered with the Brazilian Bar Association (“OAB”). Thus, under the terms of the decision, the motion for discontinuance could not even have been considered.

In light of this decision, LOTERJ can still file an appeal.  In addition, the interlocutory appeal filed, as mentioned previously, is pending judgment. However, considering that the primary lawsuit has been discontinued, the interlocutory appeal will likely be dismissed. 

Given this landscape, the question of authority to regulate/authorize betting operators, for the time being, will not be examined by the TRF. To this effect, we await the judgment of individual claims that were proposed by several betting operators.

Demarest’s Dispute Resolution team is monitoring this topic and remains available to provide any clarifications as may be necessary.

[1] Case Records No. 1024381-35.2024.4.01.3400, currently being processed by the 13th Federal Civil Court of the Judicial Section of the Federal District (“SJDF”). 

[2] The decree establishes the “conditions to be complied with by those interested in operating the lottery modalities provided for and authorized in the current legislation”.

[3] Case Records No. 1015703-46.2024.4.01.0000, currently being processed by the 11th Panel of the 3rd Section of the Federal Regional Court (“TRF”) of the 1st Region, as reported by Pablo Zuniga Dourado.

[4] In compliance with Article 24 of SPA/MF Ordinance No. 827, of May 21, 2024.