By Marcello M. Corrêa
Lawyer and Master in Political Science in Universidade Federal Fluminense
Last week, SUSEP, a federal agency responsible for executing public policies related to insurance companies in Brazil, issued CIRCULAR n. 569 of 05/02/2018. This expedient outlined a new operational paradigm for capitalization companies in Brazil.
Among the novelties and adjustments to market practices, we highlight: a) the possibility of "instantaneous awards" (article 5, VIII) and; b) subscription of titles in electronic site (article 55, §2º). In short, if in the past such titles were veiled competitors of instant lotteries (state and federal), they are now direct competitors of them and with due legal recognition.
Hence the parallel with another article published here in Games Magazine Brazil. In that article we present the regulatory risk related to Decree n. 9,327 / 18, which dealt with LOTEX (Federal Union "exclusive" lottery). We maintain that the decree has no legal basis and, therefore, could not attribute regulatory powers to the Secretariat for Fiscal, Energy and Lottery Follow-up (SEFEL) - successor to the Secretariat for Economic Monitoring (SEAE). It became evident that the rule inscribed in art. 14 of the aforementioned decree is fragile, since it was not authorized by the National Congress. In other words, it is not enough for a decree to say that a certain organ is the regulating agent of a certain activity, since to be a regulator it is imperative that the law assign three fundamental competences: a) to edit norms; b) apply standards; and c) suppress infractions.
Now and at the other end of the trench of the Federal Government, we have SUSEP, whose foundations of its competencies are found in Decree-Laws 73/66 (see articles 32 and 36) and 261/67 (articles 1 and 3). In other words, the law (since both Decree-Laws were approved by the 1988 Constitution as ordinary laws) attributed to the CNSP (National Council of Private Insurance) and SUSEP those three basic competencies and, therefore, that circular expresses a robust regulation of the capitalization sector.
In fact, such direct competition translates into a true "friendly fire" within the Federal Government by draining out the sense of exclusive proclaimed for SEFEL. Added to the scenario are the disputes in the Constitutional Court, originated in the acts of the Ministry of Finance, when it sought to establish a monopoly not provided for in the Constitution for the lottery market and, in this sense, called on state lotteries to suspend its operations (whose practical result are ADPFs 455, 492 and 493, is ultimately consolidated by the request of amicus curiae of the National College of State Attorneys General and the Federal District, signed by 14 Attorneys General).
In practical terms, the SUSEP circular made it clear that there is no monopoly for investors, especially international ones. At the same time, SEFEL / MF was able to consolidate 14 states that, once successful in the Constitutional Court, could exploit their lotteries - much larger than the state lotteries now in operation. In addition, we maintain our opinion: from the legal and political point of view, the LOTEX concession process is risky for the investor.
SUSEP's "friendly fire" only made more evident what was perceived in every LOTEX process, especially considering the value of the desired concession, of only 0.015182073% of the Federal Budget for 2018 (R$ 542 million for 15 years of contract). A fragile regulatory framework and the fight with the states, all this is resulting in great political strain on the Ministry of Finance, which is why a course correction would be healthy for all involved.
Source: GMB
