Rio de Janeiro VLTs face constitutional challenge as LOTERJ, five states and Finance Ministry back legality

The Rio de Janeiro Public Prosecutor’s Office has filed an unconstitutionality challenge against State Decree No. 49.804/25, which authorizes Video Lottery Terminals (VLTs) in the state. For high-risk operators and payment providers, the real issue is not the hardware itself but whether Rio has created a new betting category without a proper legal basis, which would affect both licensing stability and potential liabilities.

1. The case was filed by the state prosecutor general, Antonio José Campos Moreira, against the decree issued on 18 August 2025. It is now before the Special Body of the Rio de Janeiro Court of Justice (TJRJ), with Judge Gizelda Leitão Teixeira as rapporteur, and the governor as the defendant; the State Attorney General’s Office (PGE) appears as an interested party in the case accessed by BNLData.
2. The MPRJ’s argument rests on three points. First, it says the decree violates the legal reserve principle because it allegedly created obligations and restrictions without a specific state law. It also argues that the executive went beyond its regulatory powers by acting in an area that, in its view, should have been decided by the legislature. The prosecutor’s office even cites PL 442/1991, now PL 2234/22, which would legalize casinos, bingo and jogo do bicho and is still pending in the Senate, as evidence that the matter has not yet received mature legislative deliberation.
3. Second, the MPRJ claims the decree encroaches on federal competence. Its reading of Federal Law 14.790/2023 is that fixed-odds betting in online games is reserved exclusively to the virtual environment, with physical equipment barred for that purpose. On that basis, the prosecutor’s office says VLTs in bars, restaurants and grocery stores would amount to a lottery product not authorized by the Union.
4. Third, the MPRJ invokes insufficient protection of fundamental rights. Its concern is the spread of physical terminals in high-traffic venues and the exposure of children, teenagers, elderly people and compulsive gamblers to a high-risk product. The office also points to operational gaps: according to the filing, LOTERJ would not have access to Cadastro Único, which is needed to exclude Bolsa Família and BPC beneficiaries, nor to Siscoaf, the anti-money-laundering monitoring system.
5. That said, the dispute is not one-sided. Documentation from LOTERJ, a legal opinion from Brazil’s Ministry of Finance, and the practice of five other Brazilian states are all cited as support for the view that VLTs operate within the existing legal framework, rather than as the fixed-odds betting product the MPRJ says it is fighting. In other words, the fight is over classification: new betting modality, or just a physical distribution channel for something already regulated by federal law.

The financial angle is what makes this worth watching beyond Rio. An expert quoted by BNLData estimates that the state could face up to R$ 1 billion in damages if the operation is derailed, which is the kind of number that gets noticed quickly by any PSP, acquirer or banking partner looking at exposure to Brazilian gaming flows.