MAR 26 DE NOVIEMBRE DE 2024 - 21:24hs.
Anna Florence Anastasia, associate lawyer at GVM

A busy year is expected in Brazil’s area of lotteries and sports betting

It is a fact that lottery modalities have been a constant issue, either in the media or in the National Congress. However, before analyzing the year 2022 in the scope of legislation, implementation and operation of lotteries, it is important to recall the judgment of the Arguments of Non-Compliance with Fundamental Precepts (ADPFs) no. 492 and 493, as well as the Direct Action of Unconstitutionality (ADI) no. 4,986, by the Supreme Court (STF) in 2020.

This is because much of the movement in 2022 occurred due to the judgment of the above actions, which considered possible the exploitation of the lottery service by the Member States, and not only by the Federal Union.

At the time, the understanding that the private competence of the Union, contained in Article 22 of the Federal Constitution, refers only to legislative competence, so that states were allowed to explore the service, provided that they are in the manner of federal law.

That said, from 2021 and, above all, in 2022, a range of opportunities were envisaged for the public administration and, due to the specificity of the service, to any private partners, due to the natural movement of delegation of the implementation and operation of lotteries within the states.

After the decision of the Supreme Court, several states moved to begin the exploitation of lotteries, even using Procedures for Expression of Interest, an instrument that allows the Public Administration a technical and legal dialogue with the private individual who has the expertise in the object of the service to be delegated. Espírito Santo, Pernambuco, São Paulo and Maranhão benefited from this procedure, and the last two even launched notices for bidding for lottery services, taking into account the premises pointed out by several companies in the sector.

The state of Santa Catarina, following the movement, had already legislated on the creation of the state lottery and issued a decree of regulation for its implementation and exploitation. However, surprisingly, it was reported in November that the public administration of this state had given up on exploiting lottery services, according to the press due to the great demand of companies interested in operating the service, which generated distrust and great concern to the public power of Santa Catarina.

Despite this specific case, what is perceived is a natural movement for the exploitation of lottery services, due to the opportunity to increase state revenues. The choice to delegation such a service is also understandable: in this scenario the public administration does not have to invest values and still relies on the experience of the operator.

And it was in the face of this movement that the Federal Union decided, through Ordinance No. 3,346, of April 13, 2022, to implement a new lottery product of numerical prognoses, the "+Milionária". It can be seen that the evolution of the lottery scenario at the state level also generates an increase in competition and competitiveness of the business, which is why the public administration, whether federal or state, should be directly concerned with innovation and the provision of an adequate and efficient service.

On the other hand, municipalities have forced an understanding that invariably violates Article 24 of the Federal Constitution. This is because, due to a brief mention to the municipalities when the adpfs no. 492 and 493 voted, together with ADI no. 4,986, there was doubt as to the possibility of creating municipal lotteries.

In this case, it is understood that it is impossibility, mainly due to the constitutional provisions as to the competence of federal entities, since there is, in the list of powers of the municipalities, contained in Article 30 of the Federal Constitution, no mention of the exploitation of lotteries. The states, in turn, in addition to the favorable and specific judgment regarding the possibility of exploitation of this service, have the provisions of Article 25, §1, of the Major Charter, which deals with residual competence: the powers that are not sealed to them are reserved to the states.

Nevertheless, the companies that operate this service have a strong presence in the country, being a common practice that they sponsor large teams of the elite of Brazilian football, despite not having in Brazil any office or branch, and hosting their electronic sites abroad. In this sense, Brazil lost in 2022, since it stopped collecting values for social security and other sensitive areas, in addition to failing to tax such companies, which would be extremely favorable, both for the public administration and for the collectivity.

Still on the subject, it is important to remember that in August this year the National Consumer Secretariat (Senacon), subordinate to the Ministry of Justice, determined to TV Globo, CBF and the football teams of the first division of the Brazilian Championship to present the advertising contracts signed with sports betting companies. At the time, it was argued that the concern was the fact that the activity could be exploited without mechanisms of control, supervision or accountability.

In addition, the Ministry of Economy activated the Federal Police and the Attorney General's Office (PGR), in order to investigate an alleged irregular exploitation of sports betting in the country.

However, the problem would be easily solved if the aforementioned regulation of Law No. 13,756/2018 had occurred, not only to end legal uncertainty that permeates the activity, but also to provide the relevant government with fundraising.

In any case, surely the year 2023 will be busy in the context of lotteries and sports betting. This is because, in addition to the movement of state public administrations, Brazilians have already been consolidating as users of this service, which confirms the need for consistent action by the Union, states and even private partners.

Anna Florence
Specialist in Administrative Law and associate lawyer at GVM Advogados

Source: Conjur