According to recent news, councilors from Guarulhos/SP and Porto Alegre/RS intend to establish their own Municipal Lotteries, through Bill No. 1.532/2021 and Bill No. 217/2021, respectively. It is in the nature of the mandate of parliamentarians to seek solutions to the demands in their municipalities, so that the exploration of lottery modalities can be a considerable attraction, both from an economic and social point of view.
However, establishing its own Municipal Lottery, it seems to us, is a legal adventure for municipal managers and a legal risk for potential investors. The intention of the municipalities to establish their own Lottery is not a pioneer. In fact, the STF has already manifested itself against this initiative, see Allegation of Non-compliance with Fundamental Precept 337, even though it adopted another basis at that time.
In any case, contemporary initiatives run the risk of attracting, in addition to possible defects of origin and prohibition provided for in Complementary Law No. 173 of 2020, the flagrant conflict in the face of the Constitution of the Republic/88.
It is worth remembering that the judgment of the Allegations of Non-compliance with Fundamental Precept No. 492 and 493 by the Federal Supreme Court, published in December 2020, ensured the competence of the Member States and the Federal District to explore the activity within their respective territories by recognizing the lack of exclusivity by the Union to establish Lotteries and explore the respective modalities.
However, the decision pacified in the Federal Supreme Court does not reach the municipalities. Therein lies the imprecision of the aforementioned bills. To concretely contribute to the instigating debate, it is essential to remember that the actions under discussion questioned provisions of Decree-Law 204, of February 27, 1967, a diploma that prohibited the creation of new state Lotteries, maintaining only the existing Lotteries to time and the limitation of their activities.
With the origin of the actions, the STF recognized subnational entities the right to make the activity viable, as long as they comply with the lottery modalities instituted by the Union, the only one competent to legislate innovatively on the subject.
The grounds of the judgment take into account, in particular, the exclusive legislative competence of the Union, provided for in art. 22, XX, CF/88, the residual competence of the Member States and the Federal District, of art. 25, § 1, CF/88, and the principle of equality among federated entities. In view of this, when exposing the ratio decidendi of his vote (that is, the preponderant reasons for the decision), Rel. Min. Gilmar Mendes concluded:
Articles 1 and 32 of Decree-Law 204/1967, by establishing the Union's exclusivity on the provision of lottery services, were not accepted by the Federal Constitution of 1988, as they directly collide with art. 25, § 1, of CF/88, by emptying the subsidiary constitutional competence of Member States for the provision of public services that were not expressly reserved by the constitutional text for exploitation by the Union (art. 21 of CF/88); [...]
On the other hand, the state legislation instituting lotteries, whether via state law or by decree, should simply enable the exercise of its material competence as a public service institution entitled by the Member State, so that only the Union can define the modalities of lottery activities subject to exploitation by the States.
Unlike what happens with states and the Federal District, municipalities do not have the so-called residual competence provided for in art. 25, § 1, of CF/88; the aforementioned technique of distribution of powers dates back to the origins of federalism and leaves it to the member states to deal with competences that have not been established as exclusive to the Union (art. 21 of CF/88) or Municipalities (art. 30 of CF/88).
The Constitution of the Republic, even when naming municipalities as federative entities in 1988 in an innovative way, did not adopt the same technique of division of powers that it intended for the States and the Federal District.
On the other hand, the declarations in the votes of the justices of the STF in the judgment of ADPFs 492 and 493 that refer to the competence of the municipalities are not unknown. However, the main reason for the non-receipt of the provisions of Decree-Law 204/67 is the collision that the aforementioned diploma promoted between the Union's exclusivity to explore lotteries, notably in art. 1 of the Decree-Law, norm of infra-constitutional origin, and the residual jurisdiction of the States provided for in art. 25, § 1, CF/88, rule of constitutional origin.
The problem, to the unsuspecting, lies in the excerpt of the judgment that refers thus:
“(iii) The exclusive competence of the Federal Government to legislate on systems of consortia and drawings (art. 22, item XX, of CF/88) does not preclude the material competence of the States to explore lottery activities nor the regulatory competence of such exploitation. For this reason, Binding Precedent 2 does not address the material competence of the States to establish lotteries within the federal beacons, even if such materialization has expression through state, district or municipal decrees or laws.” (We highlight).
The stretch, however, does not attribute to the municipalities to make the lottery viable. To them, pursuant to art. 30 of CF/88, it is given to legislate on matters of local interest, taxes within its competence, etc. That said, it is undeniable that they may regulate the location or time of service of lottery agents (i.e., the "materialization", location, of the activity), incidence of municipal tax on these activities or other matters circumscribed in the rules of art. 30 of the constitution, but never on the Lottery or Raffles, as provided for in the Binding Summary 02/STF.
A similar interaction between federative spheres of competence occurs with municipal legislation that limits the waiting time or deals with service with a password at bank and lottery agencies; in such regulations, jurisprudence understands that they are inserted in a matter of local interest, since they are not, properly speaking, about labor law or the functioning of financial institutions, matters of exclusive competence of the Union.
Within the normative framework presented, the only alternative for municipalities is to seek collaboration with the state in which they are located, or with the Union, to transfer part of the collection in their territory, in addition to charging the ISSQN (Tax on Services of Any Nature) about the Lottery business.
It is therefore concluded that, in addition to the fact that the grounds of the STF decision do not favor the issue, it is noted that the constitution itself does not honor the competence of municipalities to operate lotteries, since it does not attribute residual competence to them, as is the case with the States -member and Federal District.
Roberto Carvalho Brasil Fernandes
OAB/SC 20.080
Alexandre Amaral Filho
OAB/SC 37.828
Rafael Biasi
OAB/SC 58.767
