Stake to challenge Brazil court ruling lifting betting injunction

Udo Seckelmann, a partner at Bichara e Motta Advogados, told iGaming Business that Stake intends to keep fighting after a Brazilian court struck down an injunction that had briefly shielded the operator from a betting ban. The suspension was ordered by Judge Luis Antonio Johonsom di Salvo, who heads the Federal Regional Court of the 3rd Region (TRF-3), and it took effect a day after the injunction was granted, so Stake is once again barred from the market. Seckelmann said the firm is weighing two possible strategies and has not disclosed the grounds on which Stake plans to challenge the suspension.

The preliminary injunction had allowed Stake to continue operations until 25 October, after President Luiz Inácio Lula da Silva prohibited licensed betting in late September. The Attorney General's Office (AGU) requested the suspension, contending that the earlier ruling handed Stake an edge over rival operators that other licensees did not enjoy. Seckelmann said the AGU appealed to the president of the tribunal, whom he described as tending to favour the federal government, and that the decision raised general principles rather than arguments, calling it political.

Seckelmann said Stake's argument rests on the investment operators made to meet entry requirements for the licensed market, including a BRL30 million ($6 million) licence fee, a financial reserve of at least BRL5 million and, for international companies such as Stake, a headquarters in Brazil. He said the reversal undermines the legal certainty operators relied on when entering the market, and that the government prohibited the activity before the licence, valid for five years, reached its two-year point.

Seckelmann said the federal government's reasoning for the provisional measure was not grounded in studies and statistics showing the regulated market caused addiction and debt problems, and that illegal gambling was the source of the issues. He said a positive decision for Stake in the coming days could extend to other operators, adding that the firm is aware of its responsibility for the wider industry.

According to a partial survey conducted by the National Association of Games and Lotteries, over 3,500 workers have already been laid off by Brazil's betting sector since Lula issued the provisional measure. Seckelmann said Stake told the court its operation was frozen, that it had to terminate contracts and dismiss staff, and that prolonged proceedings would cause irreversible losses.

Separately, two of Brazil's main gambling trade bodies have filed a motion with the Supreme Federal Court (STF) seeking to overturn the ban on the basis that it is unconstitutional. Seckelmann said a ruling on that challenge is only likely after the second round of elections, scheduled for 25 October, which he said was central to Stake's argument that a preliminary injunction was needed while the STF considers the dispute.