Among the main points of the aforementioned decision, the following can be mentioned:
a) The operation of lotteries has a public service legal nature (article 175, caput, of CF/88), given the existence of an express legal provision;
b) 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 Constitution, as they directly collide with article 25, §1 of CF/88, by emptying the subsidiary constitutional competence of the member states for the provision of public services;
c) The exclusive competence of the Union to legislate on systems of consortia and drawings (article 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;
d) 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 held by the member state, so that only the Union can define the modalities of lottery activities subject to exploitation by the states.
The judgment in question became a milestone for the gaming market in Brazil, not only to ensure the legitimacy of the state lotteries existing at the time (Rio de Janeiro, Paraíba, Minas Gerais and Ceará), but also to exponentialize the Brazilian market for worldwide.
After the aforementioned decision, several movements began in states that until then had not shown interest in the exploitation of lottery products, or had decided to close their respective operations in recent years.
The fact is that we are currently experiencing a market revolution in which states are looking for the best ways to build their respective lotteries, increase their collection and attract reputable and competent operators.
Before we look into the possible forms of "construction" of this not-so-new model of state exploitation, it is necessary to understand what the modus operandi of existing contracts is like so far.
Currently, most existing state lotteries operate few products, mostly multiple chances (passive prognosis) and/or instant products (scratch cards). The contracts signed are for the provision of services, with a term of five years of operation.
Potential forms of contracting
By analyzing the aforementioned scenario, the existing movements and the possible forms of applicable contracting, it is possible to arrive at three apparently viable formats: 1) accreditation; 2) service provision contracts; 3) public concessions.
1) The state lottery allows market players to be accredited for a certain period of time, to explore one or more lottery products. Pros: Faster and potentially cheaper process, as it may not be necessary to spend the initial grant amount; Cons: high competitive rate, since different players can explore the same modalities.
2) The state lottery publishes a bidding notice for a service provision contract that aims to explore one or more types of lottery products. Pros: the winner of the bid will be able to explore the market for a fixed period of time and with low competitive rates; Cons: obligation to adapt to the proposed bidding model and possibility of predatory financial proposals.
3) The state lottery publishes a notice of competition for a public concession that aims to explore one or more types of lottery products. Pros: the winner of the bid will be able to explore the market for a long period of time, enabling financial adaptations and greater market innovations; Cons: obligation to adapt to the proposed bidding model and potential competition with large corporations.
However, it is necessary to emphasize that there is a budgetary challenge for the structuring of a public bidding procedure, especially for states that do not have state lotteries established, nor do they have the know-how to implement them.
Aiming to remedy the deficiency in question and impact the public coffers as little as possible, some states are opting for the procedure of expression of interest (PMI). Through this model, the state allows private sector players to present studies related to the lottery market.
Some states have already started their respective PMI processes, such as Maranhão, São Paulo, Distrito Federal and Minas Gerais. This demonstrates a tendency for other states to adopt the same modus operandi.
Thus, we can only wait for the next steps of the market players and closely monitor the impact of the models that will be adopted by states throughout Brazil.
João Rachid Motta
Head of Legal at MCE Intermediações e Negócios
Source: Revista Consultor Jurídico
