MPRJ Challenges Video Lottery Terminals Approved by LOTERJ
Brazil.- 23 July 2026 www.zonadeazar.com The Public Prosecutor’s Office of Rio de Janeiro has filed a constitutional challenge against the decree authorising Video Lottery Terminals in the state. The case could expose the government to compensation claims estimated at up to R$1 billion.
The legal action challenges State Decree No. 49,804/2025, issued on 18 August 2025 to regulate the operation of Video Lottery Terminals —VLTs— under the supervision of the Rio de Janeiro State Lottery.
The proceedings are before the Special Body of the Rio de Janeiro Court of Justice and are being handled by Judge Gizelda Leitão Teixeira. The state governor is named as the defendant, while the State Attorney General’s Office is participating as an interested party.
Public Prosecutor’s Three Main Arguments
The Public Prosecutor’s Office argues that the decree created obligations and restrictions without support from specific state legislation, exceeding the regulatory powers of the executive branch.
It also claims that the state may have encroached upon federal jurisdiction by authorising physical terminals for an activity which, according to its interpretation, falls under the fixed-odds betting framework established by Federal Law No. 14,790/2023.
Its third argument concerns the protection of minors, elderly people and those experiencing gambling-related harm. Prosecutors warned about the risks associated with installing terminals in widely accessible establishments and questioned LOTERJ’s access to certain federal control systems.
LOTERJ, however, maintains that the terminals may operate only inside premises dedicated exclusively to this activity.
LOTERJ Says VLTs Offer Instant Lottery Products
LOTERJ’s technical defence argues that the terminals do not operate as fixed-odds betting products or slot machines, but as a technological channel for selling electronic instant lottery tickets.
Under this interpretation, prizes, ticket quantities and player returns are determined in advance within a finite series of authorised tickets. The terminal does not generate the outcome when the player participates; it selects and reveals one of those tickets.
Brazil’s Secretariat of Prizes and Betting has also stated in a technical document that terminals may be considered a means of delivering lottery products previously created under federal law, provided that all required controls are met.
Biometrics, KYC and Pix Transactions
The decree requires multifactor authentication, facial recognition and proof of life. Player registration must use identification procedures and controls designed to prevent access by minors and combat money laundering.
All financial transactions must be conducted through Pix and linked to the player’s CPF tax identification number. Equipment, games and central systems must also obtain technical certification.
According to BNLData, companies must satisfy 1,026 requirements and complete an in-person proof of concept covering their software and hardware before receiving a licence. There are currently 31 LOTERJ-licensed companies, each subject to a fixed R$5 million authorisation payment.
Potential Impact of Up to R$1 Billion
If the court declares the decree unconstitutional, licensed companies could seek reimbursement of authorisation payments, investments, lost profits and other damages.
An expert consulted by BNLData estimated that potential compensation could reach R$1 billion. This remains an estimate and does not represent a liability recognised by a court.
The legal action does not include a request for a preliminary injunction, meaning the decree remains fully in force. The State Attorney General’s Office has until 29 July 2026 to submit its response.
Edited by: @_fonta
