Brazil court restricts Paraíba state lottery’s digital sales outside the state, citing STF precedent

A federal court in Paraíba has blocked LOTEP from selling tickets outside the state through digital channels, in a ruling that could matter far beyond Paraíba. For high-risk operators and payment providers, the point is simple: if the territorial rule is shaky, the payment flow built on top of it gets shaky too.

1. On Monday, 28/7, the 2nd Federal Court of Paraíba granted a preliminary injunction in case 0035005-37.2026.4.05.8200, limiting the online expansion of the Loteria do Estado da Paraíba (LOTEP) beyond Paraíba’s borders. The decision was issued by substitute federal judge Leonardo Henrique de Figueiredo Tavares.
2. The injunction partially granted a request by Via Capitalização S/A, a capitalization company supervised by SUSEP (Superintendência de Seguros Privados). Via Capitalização argued that LOTEP was operating digitally outside Paraíba without effective geographic controls, and submitted evidence of an IP address in Porto Alegre (RS) tied to the purchase of a product sold under the state lottery brand.
3. The dispute centers on Law No. 14.195/2025, which amended Law No. 12.703/2023 to say that online ticket sales would be considered “effected within the territory of the State of Paraíba” even when the bettor was in another state. Via Capitalização said this created a legal fiction of territoriality, shifting the rule from where the bettor is located to who is selling the product.
4. The judge agreed that the state rule may conflict with Article 35-A of Federal Law No. 13.756/2018, which limits the sale of state lotteries to people physically located within the limits of their respective jurisdictions or domiciled in that territory. By redefining that criterion, the state law would, in substance, intrude into lottery-system regulation, which Article 22, item XX, of the Federal Constitution reserves to the Union. The decision also cites Vinculating Precedent No. 2.
5. The court followed the Federal Supreme Court’s earlier ruling in ACO 3.696/RJ, the Loterj case, reported by Justice André Mendonça and endorsed by the full bench in January 2025. In that case, the STF suspended an amendment to a tender notice that removed geolocation mechanisms, holding that it created the same “legal fiction” of territoriality and clashed with federal competence over the sector.

The practical takeaway for PSPs is not just about state lotteries. Whenever a product depends on a territorial carve-out, the payment stack usually needs the same enforcement logic: geolocation, jurisdiction checks, and a settlement setup that does not pretend Brazil is one uniform licensing zone when the law says otherwise.