Brazil’s federally regulated online gaming and sports betting market may have launched at the dawn of the new year, however, regulatory disputes in the region continue to rumble on.

Last week, André Mendonça, Minister of the Federal Supreme Court (STF), granted a preliminary injunction suspending operators licensed by the State Lottery of Rio de Janeiro (LOTERJ) from operating outside of the state’s territorial limits.

This is the latest decision in the ongoing dispute between the federal government and LOTERJ over the reach of the state regulator’s licensed brands.

Speaking on the latest episode of iGaming Daily, Isadora Marcante, SBC’s Relationship Manager for Brazil, outlined the reaction of the industry to the news.

She said: “Operators that have got the federal licence are quite happy with this, especially when you have to pay 30m Brazilian Reals [£3.9m] and a GGR [tax] of 12% while some other [Loterj-licensed] companies paid just 5m BRL [£650,500] and are paying just 5% of GGR [as tax].

“The main problem is for the state-licensed operators by Loterj because what will happen when the Supreme Court decides in favour of the federal government? Will they lose all the money they paid to Loterj? And how will Loterj be affected by this economically speaking?”

Mendonça’s decision impacts 25 companies, including major sponsors of Brazilian football teams, such as Pixbet and Esportes da Sorte, partners of Flamengo and Corinthians, respectively.

Ricardo Assis, Editor of SBC Noticias Brasil, noted that if the STF succeeds in revoking national licences from Loterj, the operator’s sponsorship of the teams could be limited to Rio de Janeiro.

“Maybe the company will rip up the contract,” he speculated. “We have to wait and see because it’s major. Corinthians received around 110m BRL [£14.3m] and Flamego 105m BRL [£13.6m] which is a lot of money to just sponsor in one state of the country.”

Following the decision by Mendonça, Loterj has appealed the block and it will now be voted on by the Plenary of the Supreme Court next month.

Reflecting on the regulatory upheaval that has marred the opening of the Brazilian market, Isadora was scathing of the country’s legislators.

She said: “Personally, I would say it makes us look like a joke because we change the rules all the time. 

“It shows to the world that we don’t know what we are doing and we are learning as we go instead of having a board of competent people regulating such an important market that requires a lot of responsibility because it is a market that we know has its own problems.

“Some people are confident with the federal government and some other people are [saying], what are we doing here?”