Rio governor defends video lottery and regulation of betting at terminals.
The government of the State of Rio de Janeiro defended, this Wednesday (July 29), the constitutionality of the decree that regulates the operation of physical lottery betting terminals in the state, including the so-called video lottery terminals. Acting Governor Ricardo Couto de Castro signed Official Letter No. 91/2026-GG and sent it to Judge Gizelda Leitão Teixeira, of the Special Body of the Court of Justice of Rio de Janeiro, in response to a lawsuit questioning the legality of the normative act.
The statement complies with the deadline set by the Court for the Executive Branch to provide information in the Unconstitutionality Representation No. 3009435-34.2026.8.19.0000, filed by the Attorney General of the State of Rio de Janeiro. The action challenges State Decree No. 49.804, issued on August 18, 2025, which establishes the technical and operational requirements for the operation of lottery products through physical equipment, such as Video Lottery Terminals , kiosks, betting terminals, and Smart POS , in the state of Rio de Janeiro.
The contested decree
The regulation challenged by the Public Prosecutor's Office imposes a series of requirements for companies accredited by the Rio de Janeiro State Lottery (LOTERJ) to operate these machines. Among the main obligations are biometric facial authentication combined with a second verification factor for access to the machines; mandatory integration into a betting system based on the Know Your Customer (KYC) model; and the exclusive processing of financial transactions via Pix linked to the bettor's CPF (Brazilian taxpayer ID).
The decree also expressly prohibits the presence, in authorized establishments, of slot machines, parallel lottery machines, and any terminals with locally installed random number generators that are not approved by LOTERJ. All advertising of lottery products is subject to responsibility guidelines that prohibit appeals to vulnerable audiences.
Before commencing operations, accredited companies must submit their equipment to a Proof of Concept (PoC); in addition to presenting certifications issued by internationally recognized bodies, such as the GLI-11 to GLI-33 standards and the ISO 27001, 27701, 9001 and 37001 standards. Logs of all interactions with the terminals must be recorded in an auditable system, with consolidated monthly submission to LOTERJ and real-time access to the agency's control panel.
The government's defense
The legal strategy of the Rio de Janeiro state government relies directly on a precedent set by the Supreme Federal Court. The acting governor argues that the decree does not create any new type of gambling or betting, but merely regulates technical and operational aspects of activities already authorized by federal law, especially Law No. 13.756/2018.
The central point of the argument is the distinction between the legislative competence of the Union and the material competence of the states. The official document cites the joint judgment of ADPFs No. 492 and No. 493 and ADI No. 4.986, in which the Supreme Federal Court established the following thesis: “The exclusive competence of the Union to legislate on consortium and lottery systems (Article 22, item XX, of the Federal Constitution of 88) does not preclude the material competence of the States to operate lottery activities, nor the regulatory competence of such operation. For this reason, Binding Precedent 2 does not address the material competence of the States to institute lotteries within federal boundaries, even if such implementation is expressed through state, district, or municipal decrees or laws.”
Based on this precedent, the government argues that the Union has exclusive competence to define, by law, the lottery modalities permitted in the legal system; while the regulation of how these modalities are operated locally belongs to the state sphere. The issuance of Decree No. 49.804/2025 would therefore be a legitimate exercise of the regulatory power of the State of Rio de Janeiro.
The arguments of the MPRJ (Rio de Janeiro State Public Prosecutor's Office)
The Attorney General bases the representation on two lines of attack. The first points to a violation of the principles of legal reserve, separation of powers, and the Democratic Rule of Law, invoking articles of the Federal Constitution and the Constitution of the State of Rio de Janeiro. The second argues that the decree would have encroached upon the exclusive competence of the Union to legislate on consortium and lottery systems, as provided for in Article 22, XX, of the Federal Constitution.
The government counters this second line of argument by distinguishing between "legislating on lotteries," a federal prerogative, and "regulating the operational exploitation of state lotteries," a competence that, according to the Supreme Federal Court (STF), belongs to the states. The official document concludes that the unconstitutionality pointed out by the Public Prosecutor's Office of Rio de Janeiro (MPRJ) "manifestly does not occur in the present case," since the decree did not institute any new modality.
Judge Gizelda Leitão Teixeira, rapporteur for the case in the Special Panel of the TJRJ (Rio de Janeiro State Court of Justice), will now receive the information provided by the Executive Branch to proceed with the analysis of the representation. The decision of the Special Panel may determine whether the regulatory framework for physical betting terminals in Rio de Janeiro remains in effect or is suspended, with a direct impact on the operational structure of LOTERJ (Rio de Janeiro State Lottery) and accredited companies that have already started or plan to start activities in the state.
Petition from Governor Ricardo Couto
