MIÉ 27 DE NOVIEMBRE DE 2024 - 22:41hs.
Pericles Laudier de Faria Lima, GDA Consortium attorney

Legality of municipal lotteries in Brazil

Pericles Laudier de Faria Lima, a lawyer for the GDA Consortium specializing in lottery products and policies, composed of the Portuguese company GetLucky, the American firm Apus Payments and the Bulgarian Decart, writes a column in the Jornal Diário de Pernambuco on the constitutional possibility of Brazilian municipalities having jurisdiction for the exploitation of lottery activities in their territories. In 2021, GDA sent the Aracaju City Hall ideas for the creation of a municipal lottery in the Sergipe capital.

In recent months, there has been some controversy around the theme of municipal lotteries, with many Bills being processed in several municipalities of the nation, with the objective of creating their respective lottery services, in order to promote fundraising to be used in policies local public.

All this movement has been due to the judgment of ADPFs 492 and 493, by the Federal Supreme Court, whose ruling was published just over a year ago.

Well, there is a duality of positions about the legal/constitutional possibility of municipalities to hold competence for the exercise and exploitation of lottery activities in their territories, which has generated a scenario of certain doubt and insecurity in the specialized environment.

However, it is easy to perceive the demotivation of the controversy in question, due to the simple fact of the clarity of the judgment of the aforementioned constitutional actions and the absence of private and/or exclusive competence in favor of the Union and States entities, in the Federal Constitution, in relation to the lottery subject, which remained more than pontificated by the STF.

In this sense, it is noteworthy that the vote of the rapporteur of ADPFs 492 and 493, Minister Gilmar Mendes, on several occasions brings emphatic positions in this sense and in a very categorical way points to pages 45 of the aforementioned judgment:

“So, in summary, it seems to me right to infer that state (or municipal) legislation that institutes lotteries in their territories only convey material competence that was granted to them by the Constitution.

Such state norms, whether laws or decrees, would only offend the Federal Constitution if they instituted a discipline or type of lottery not provided for by the Union itself, given that, in this case, the state legislation would depart from its materializing character of the public service of which the State (or municipality, or Federal District) is the holder, which is incompatible with art. 22, XX, of CF/88.

It is permissible to conclude, therefore, that the Union's competence to legislate exclusively on consortium and sweepstakes systems, including lotteries, does not preclude the material competence for the exploitation of these activities by state or municipal entities." (no emphasis in the original)

Thus, the express position of the rapporteur can be clearly seen by the material competence of the municipalities in the institution and development of their lottery services, such as the Union, States and Federal District. In a continuous act in the aforementioned paradigmatic judgment, Minister Alexandre de Morais (second to vote), expressly and clearly points out such competence of municipal entities, otherwise let's see:

“In other words, here, Mr President, who has the power, the real power to regulate, to establish the entire lottery system is the Union, which is a private competence. By establishing this, it is not just the Union who can exploit it. States and municipalities can, as long as they strictly observe federal regulations. This is what makes sense, in my view, when we interpret, in different ways, how legislative competences, on the one hand, and administrative competences, on the other hand, should be carried out. We could not restrict or allow, because that would be extremely dangerous, that the Union, in the exercise of its private legislative competences, could begin to restrict the administrative competences of other federative entities.” (emphasis ours)

In this sense, it is imperative to note that all the other justices of the Supreme Court followed the entirety of the rapporteur's vote and did not differ in any way from the vote of the second to vote, min. Alexandre de Morais. Thus, the validation of all the terms of the rapporteur's vote is evident, by the unanimity of the members of the Federal Supreme Court, who understood in the sense of not receiving the 1st and 32, caput and § 1, of Decree Law 204/67 and its consequent effects: the material competence for regulation and exploitation of lottery modalities by states and municipalities, such as the Union.

In addition, not even by the most extensive interpretation can it be affirmed that there is a constitutional commandment that makes it impossible for municipalities to explore lotteries, after the judgment of ADPs 492 and 493, since there is no provision in the entire body of the Major Law in this sense, being private of the Union only the legal innovation on this matter, as exhaustively pontificated by the Supreme Court, not only in the aforementioned ADPFs, but in other diverse judgments of constitutional actions, which served as a jurisprudential basis for the result of the judgment in question.

In view of all that has been explained, it is clear that “carrying out a new federative war” in this area, this time between states and municipalities, in addition to being innocuous, will only weaken both classes of federated entities before the institutions, which will hinder the development of their lottery activities, after so many years of struggle to obtain legal certainty to do so.

The GDA Consortium, specialized in lottery products and policies, made up of the Portuguese company GetLucky, the American firm Apus Payments and the Bulgarian Decart, sent ideas for the creation of a municipal lottery in the Sergipe capital to the City of Aracaju.


Pericles Laudier de Faria Lima
Lawyer and Legal Adviser of the GDA Consortium