Rio Prosecutor: VLTs for Online Betting Unconstitutional?
The Attorney General of Justice of Rio de Janeiro, Antonio José Campos Moreira, filed a representation of unconstitutionality before the Special Body of the State Court of Justice against State Decree 49.804/25, which authorizes the installation of physical equipment and terminals for electronic betting in commercial establishments throughout the state.
The norm signed by the Rio de Janeiro government allows the use of devices such as video lottery terminals, totems, and smart POS in stores, sports bars, and other commercial points, with the argument of regulating federal laws 13.756/2018 and 14.790/2023. For the Public Prosecutor's Office, this decree exceeds federal limits and creates a lottery modality not provided for by national legislation.
The legal argument
The core of the action lies in the interpretation of Law 14.790/2023. The MPRJ argues that the federal norm does not contemplate the commercialization of fixed-odds betting in a virtual environment through physical equipment installed in businesses. This restriction, according to the body, turns the state decree into an undue innovation within the Brazilian legal system, since the federal regime exclusively regulates digital operation.
The representation also highlights a problem of competence. For the Public Prosecutor's Office, consortium systems, draws, and lottery activities are matters exclusive to the Union, which means that no decree of the state Executive Power can regulate the issue without invading this constitutional attribution. The consequence, according to the action, is the usurpation of federal legislative power through regulatory means.
Risk of a parallel market
The proposal has a direct impact on operations. If the court grants the request, the equipment installed in sports bars and businesses in Rio de Janeiro will have to be taken offline. The discussion also scrutinizes the Loterj model, the Rio de Janeiro regulatory body, which has been promoting an aggressive scheme of licenses and authorizations different from the federal framework of the SPA.
The case is part of a broader tension between the Union and the states over who controls which portion of the regulated market. While the SPA strengthens its authority over the national online segment, several states have experimented with regulations that expand the scope of gambling in their territories. The MPRJ's action is the most resounding legal response of the last month to this expansion.
The outcome in the Rio de Janeiro Court of Justice could set a precedent for other states that have advanced with similar schemes and forces platforms with a retail presence in Rio to urgently review their legal exposure. The discussion replicates concerns that also affect Colombia, Argentina, and Peru, where subnational governments are vying with national regulation to capture part of the industry's tax base.
Tags: Brazil, Rio de Janeiro, Brazil gambling regulation, Brazil Public Prosecution Service, Brazil VLT