During the ministerial meeting with great repercussions last year, one of the issues discussed was the possibility of releasing the gaming sector and implementing integrated resorts in the country, as a way of promoting tourism and leveraging the Brazilian economy. Although discreetly, the Government's support for the advancement of legalization is a way of expanding the collection.
In the National Congress, the theme is old and there have been times when it was more or less debated - but always part of the agenda of some parliamentarians. Recently, Senator Angelo Coronel (PSD / BA) responsible for reporting the Bill for the exploitation of casinos in resorts showed interest in presenting his favorable opinion to the matter later this month. Along the same line as the Executive, it would be an alternative for the recovery of the economy.
We have already dealt with the advances in these two spheres in previous articles published in this column, such as the article “Gaming in Brazil: there is a safe way to legalize and mitigate the country's economic crisis” and “Sports lottery: the first step towards opening gaming in the Brazil".
Finally, in the Judiciary, among the various controversial issues that are on the agenda of judgments for the Supreme Federal Court (STF), there is an expectation that there will be an appreciation of the possibility of exploiting gaming in Brazilian territory.
Despite advances in relation to lotteries in the last year through a decision by our FTS (we also indicate an article in this column on the theme “State lotteries: the FTS and legal security for new businesses”), the possibility of exploiting gaming had not been debated by the Court and was considered to have general repercussions - that is, the decision will have direct effects in identical cases, which discuss the same subject.
Now, not recent, but formally indicated on the agenda of the Supreme Federal Court (STF), Extraordinary Appeal (RE) n. 966.177 / RS was included by the President of the STF, Minister Luiz Fux, for voting in the plenary session of last April 7th, which was postponed to the understanding of another matter under judgment by the Ministers.
The referred process, distributed in the STF in 2016 to Minister Luiz Fux for reporting, was recognized for the existence of general repercussions even in November 2016. Since then, several applications for admission as amicus curiae have been submitted, some of them rejected and others approved, such as the qualification of the Brazilian Legal Gaming Institute. The inclusion on the agenda was then carried out in September 2020, with the April 2021 plenary session scheduled.
The process analyzes the receipt by our Federal Constitution of the classification of the establishment and exploitation of games of chance as a criminal offense in Brazil, that is, whether the exploitation of the activity is illegal or not. This is an old Appeal that will have an impact on all other processes on the subject - depending on the outcome of the judgment, it may open the gaming market in Brazil, if the vote is for non-reception of the penal provision and, in this case, already which is not in force, cannot be applied, and the exploitation of the gaming would not be considered an illegal practice in Brazil.
Art. 50 of Decree-Law no. 3,688 / 1941 determines the penalty for establishing or operating gambling in a public place or accessible to the public for a fee. The paragraphs of the provision also indicate what is considered “gambling” and the definition of “publicly accessible place”. For gambling, we have: “§3º. (…) a) the game in which the gain and loss depend exclusively or mainly on luck; b) bets on horse racing outside the racecourse or where they are authorized; c) bets on any other sports competition.” Regarding paragraph c, the understanding has already been overcome and we have that the legislation has advanced to consider sports modalities such as games of skill and, even, the creation of sports betting lotteries (fixed quota) was determined.
STF's judgment only adheres to the caput of the article, which deals with the penal type of conduct of establishing and exploiting games of chance in Brazilian territory. Reading the article in its entirety demonstrates the reality of very old times, which no longer represents the scenario we currently experience, in 2021. We can see the difference in times and scenarios, for example, by the establishment of a fine in ‘contos de réis’ (Editor’s Note: The practical currency unit shifted from the real to the mil réis ("one thousand réis") and then to the conto de réis (one million réis, literally "one count of réis").
As we can see, the legislation that imposes typification as a criminal offense is older than our Federal Constitution. While the Brazilian Magna Carta was promulgated in 1988, the Decree-Law dates to 1941.
The leading case under review by the Supreme Court arose from a complaint by the Public Prosecutor's Office against a private individual for exploiting, on several and repeated occasions, slot machines - considered games of chance - in a place accessible to the public, for a fee. The Public Prosecutor's Office verified, at the time, a criminal offense (article 50, caput, of Decree-Law No. 3,688 / 1941) and continued crime (according to article 71 of the Penal Code).
In a judgment of the Criminal Appeals Panel of the Special Criminal Courts of the State of Rio Grande do Sul, the Court found that there was no criminal practice due to the fact that the private exploitation of gambling activities, in any of its modalities, as well as participation in the gambling as a bettor, lacks criminal illegality. In the ruling, it is emphasized that individual freedom cannot be violated, especially when the prohibition refers to religious or moral tradition - the main reason for the prohibition of gaming at the time of the Decree-Law of 1941.
In the piece of the Extraordinary Appeal to the STF, the Public Ministry of the State of Rio Grande do Sul claimed that individual freedom would not characterize a justification to prevent the action of the criminal legislator regarding the definition of gambling as a criminal offense. Thus, based on good customs, society's morality and protection at work, the activity would favor bad designs and motivate more serious crimes.
The STF, in turn, admitted the Extraordinary Appeal and, by a majority, considered the issue constitutional and recognized the general repercussion. In other words, the case will automatically serve for countless others already prosecuted by the courts, as well as a reference for others that will emerge.
Therefore, now, the STF will decide on the reception or not by the Federal Constitution of the legal provision that determines the exploitation of gambling as a criminal offense. In his vote, which admitted the Extraordinary Appeal, the rapporteur Minister Luiz Fux also stressed: “It is noteworthy that the topic in these proceedings includes an analysis of a relevant constitutional issue from an economic, political, social and legal point of view, surpassing interests subjective aspects of the case, to be considered by this Court. Depending on the constitutional admissibility of punishment for conduct in this topic, there will be a significant reflection on the libertatis status of the agents whose conduct is subsumed to it.”
As in the Legislative and Executive, we see that there is no consensus on the subject in the Judiciary - including in the Federal Supreme Court. Some Ministers have previously favored similar issues; however, we have also seen resistance from others, including taking into account the consequences of the liberalization of gambling for Public Administration. Thus, we have not identified unanimity in the positions, and it is difficult to trace an exact result for the STF judgment, but we have carefully analyzed it so that we do not have a scenario of greater legal uncertainty for future investors.
Constitutionally, it is up to the legislative branch to legislate on the matter and the executive branch to regulate. For this reason, the Judiciary will not appreciate cultural aspects or qualitative analysis of games of fortune (whether these are beneficial to society or not). The Supreme Court will abide by the reception of the article in relation to the Federal Constitution that is subsequent to the Decree-Law; the STF will, therefore, analyze the legal technique, having no competence to legislate on the subject.
Despite being included in the voting list, the appreciation of the process related to gaming was postponed and was left for another opportunity, still without a defined date, which can only be judged in the second half of 2021. In any case, we see it as an important agenda for overcoming constant questioning in the country and, therefore, we believe that the topic may return to the agenda.
We are aware of other similar processes, in all instances, that seek to apply the Penal Contravention Law when exploiting gaming in Brazilian territory. In the same vein, we see that there is no consensus in the decision of the Courts on the subject.
Therefore, the Supreme Court judgment will be very important and could set a course for gaming activities in Brazil.
Marcos Joaquim Gonçalves Alves
Lawyer, founding partner of M.J. Alves e Burle Advogados e Consultores
Bárbara Teles
Lawyer, partner at M.J. Alves e Burle Advogados e Consultores
