“Considering that lottery activities are public services, it is credible to say that federal legislation cannot restrict the ownership of a public service to this or that federative entity in the absence of an express constitutional response,” justified the municipal government in the bill approved by the Chamber. The reasoning comes from a 2020 Federal Supreme Court (STF) ruling that judged a lawsuit filed by the Brazilian Association of State Lotteries (ABLE). As interpreted by the authorities, the judgment would give legal shelter to the creation of Lopoa.
In the action, the entity questioned the constitutionality of a decree-law issued by the Military Dictatorship in 1967 to regulate the sector. The court agreed with the ABLE and considered that the rule was not approved by the 1988 Constitution. In practice, the decision allowed the creation of state lotteries and abolished the exclusivity of the Union in the exploitation of the activity. With this, in the understanding exposed by the government of Mayor Sebastião Melo in the justification of the project, the release granted to the States would also extend to the Municipalities.
Lawyer Roberto Brasil Fernandes, who represented ABLE in the lawsuit filed in the STF, however, disagrees with the interpretation and states that none of the legal provisions used by the ministers in their votes meet this thesis. “What is up is to seek a part of the State and Union lottery collection to meet their demands, and not institute a lottery of their own. The right that municipalities have to participate in resources does not give them the right to exploit this servisse,” says the lawyer, who is a partner at Brasil Fernandes Advogados, specializing in Lottery Law.
“Pure adventure”
Before Porto Alegre, the municipalities of Poá and Guarulhos, in the state of São Paulo, approved throughout 2021 the creation of municipal lotteries based on the same interpretation now used by Melo. “If city halls understand this, they should open this debate in the STF because today there is no decision that contemplates them. It is legitimate for municipalities to question, but what they have does not provide legal certainty. It's pure adventure,” criticizes Brasil Fernandes.
According to the lawyer, municipalities run the risk of taking on unwanted liabilities. In an eventual judgment of the superior court for the unconstitutionality of the municipal lotteries, the decision would render these laws null since their sanction – which could lead to the responsibility of operators and public managers for the illegal lottery exploitation.
One of the goals of the Melo government when seeking funds in the exploitation of lotteries is to reduce the cost of bus tickets and prevent an increase in price. Today, other municipalities in Rio Grande do Sul, such as Caxias do Sul, are also considering creating municipal lotteries to finance public transport. According to the authorities, fares are burdened by exemptions, the drop in the number of passengers and the increase in fuel costs, values that add to the fact that the City does not receive state or federal contributions to cover these losses.
“Although collective public transport is a public policy of the State, enshrined in the Federal Constitution, there is no cooperation and collaboration of the federal and state governments in solving the problems pointed out, mainly for the forecast and increase of revenues that subsidize the fare,” justified the government in the proposal that creates Lopoa.
The City Hall's proposal is for Lopoa to explore the lottery modalities authorized by the Ministry of Economy. In other words, if implemented, the Municipality will be able to promote games such as those already carried out by the federal lottery, such as numerical predictions (Mega-Sena) or specific (Timemania), in addition to draws and sports betting. The plan is for the service to be operated by the municipal authorities itself or in partnership with the private sector, through a concession, permission or an accredited organization.
Contacted by local media Matinal, the city hall of Poá, one of the first to approve the creation of a municipal lottery in the country, still in August 2021, stated that the service implementation model in the city “is being processed by the competent departments so that the bidding process is opened, however, no date has yet been set.”
Luck in the process
Initially proposed in June last year by the government leader in the Porto Alegre Legislature, councilor Cláudio Janta (SD), the project was adopted by the City Hall after the parliamentarian signed an opinion with the Housing, Transport and Urbanization Committee of the Chamber recommended to the Executive the creation of Lopoa.
The initial idea was for the lottery to finance various services, such as health, education, security, urban mobility and social assistance, but the proposal was replaced by a new project made by the Municipality, focused only on financing public transport. The Executive's proposal was approved to go to the plenary after undergoing a legal analysis reported by Janta himself in the Chamber's Constitution and Justice Commission, which is also chaired by the councilor.
The opinion issued by the Legislative Prosecutor's Office pointed to uncertainty as to the legality of the project, but did not obstruct it. “Although there remains some doubt about the material competence of the Municipalities to institute public lottery service, one cannot speak of a manifest unconstitutionality that prevents, at least in this initial phase, the processing of the proposal in question,” states the document, which supported Janta’s report for the process of the project.
Asked about the legality of the approved project, the City Hall forwarded the doubts to the Attorney General's Office (PGM), which stated that it will uphold the legality of the municipal lottery in the event of judicialization. “The decision of the STF authorizes the federative entities (to the lottery operation). In this case, it was the State, but there is no decision excluding the municipalities,” explained the PGM.
In November 2021, the Brazilian Association of Lottery Contests, Draws and Similarities (Abracos) expressed opposition to the creation of municipal lotteries. According to lawyer Roberto Brasil Fernandes, through his office, the entity made a representation to the Attorney General's Office (AGU) for a Direct Action of Unconstitutionality (ADI) to be filed against municipal lotteries.
Source: Matinal
