According to them, the ADIs raise legitimate concerns, but they should be directed to the National Congress, which would be responsible for expanding the protection of vulnerable people against betting.
The ADIs claim that the Betting Law, sanctioned in December of last year, violates the fundamental principles of human dignity and the social values ??of work and free enterprise, in addition to the right to health and the State's duty to regulate the economic order.
The first, ADI 7.721, was initiated by the National Confederation of Commerce (CNC). In the initial petition, the entity highlights the indebtedness of families due to betting and, as a consequence of reduced income circulation, the loss suffered by the retail sector, estimated at R$ 117 billion (US$ 21.45bn) per year.
Meanwhile, ADI 7.723 was presented by the Solidariedade Party. The party raises concerns about the risky behavior associated with compulsive gambling and the damage to social programs, citing a study by the Central Bank that found Bolsa Família beneficiaries spent R$ 3 billion (US$ 550m) on bets in August alone.
The rapporteur for both cases, Minister Luiz Fux, has scheduled a public hearing on the topic for November 11.
Constitutional provision
For Paulo Peixoto, a Constitutional Law professor at Damásio Educacional, the concern over the spread of betting houses is valid due to the social and economic harm they cause.
However, from a technical legal perspective, he argues that the Betting Law does not suffer from unconstitutionality since the Federal Constitution guarantees the free exercise of any economic activity, except in cases provided by law, and grants the Union the authority to legislate on lotteries, which resemble online betting.
“Moreover, the law itself provides for responsibility, integrity, and transparency in these practices, including protections for consumers, children and adolescents, the General Data Protection Law, and public health.”
Constitutional scholar Vera Chemin points out that the exploitation of fixed-odds betting, also known as Bets,' was permitted by Law 13.756/2018, and not by the Betting Law, which only regulated gaps in the previous law.
“In this sense, the law under discussion fulfills its purpose by outlining all the requirements to be met by betting companies,” the lawyer states.
“One cannot simply assume that the entire law is unconstitutional, especially since it contains mechanisms that allow for the control and oversight of the activities of operating companies, as well as the prevention of money laundering and, consequently, criminal organizations.”
STF jurisprudence
Fernanda Meirelles, head of TMT practice at FAS Advogados, shares a similar view: “Even if these actions are upheld, the practical effect would be the repeal of the regulation established by Law 14.790/2023, while the betting activity would remain legalized. This would leave Brazil and consumers in a more vulnerable position, returning to a scenario of lack of regulation.”
The lawyer believes that the exploitation of betting has already been analyzed by the Supreme Court in the joint ruling of ADI 4.986 and the Allegations of Violation of Fundamental Precepts (ADPFs) 492 and 493. On that occasion, the court ruled that the Union has exclusive authority to legislate on lotteries, but states can exploit them.
Relevant ADIs
For Lúcia Helena Polleti Bettini, a partner at the law firm Tortoro Madureira & Ragazzi Advogados, the ADIs (Direct Actions of Unconstitutionality) are still relevant, even though there is no unconstitutionality in the fact that the Union regulates the matter.
"We must always consider the supremacy of the Constitution and its unity, the harmonization between laws. Thus, a law that initially seems necessary to remove betting from illegality cannot affect other dimensions of human life, reaching the point of violating the Constitution in its fundamental precepts."
In other words, even if legalization is not unconstitutional in itself, the occurrence of betting must still comply with the parameters of the Constitution, requiring restrictions and the adoption of educational public policies.
"We need to take a systemic approach so that we do not just resort to prohibition. We will not solve the problems by declaring unconstitutionality. We must create means to ensure that these games take place responsibly and without affecting vulnerable groups, thus achieving this dynamic desire for the Constitution."
Eduardo Bruzzi, a partner at BBL Advogados, states that a constitutional debate is warranted regarding a certain lack of equality between betting operators in relation to the federal government's licensing process.
"Those interested who applied for authorization to the Ministry of Finance by the 30th of last month are allowed to continue operating provisionally until the license is granted. On the other hand, those who submit their application after October 1st can only begin or resume operations after the license has been granted."
Regulation and oversight
Paulo Peixoto and Fernanda Meirelles agree that regulation has greater potential to curb the harmful effects of betting than the lack of rules, a situation that persisted since bets were legalized during Michel Temer's administration (MDB) in 2018—without changes during Jair Bolsonaro's government (PL)—until the Betting Law was sanctioned by Luiz Inácio Lula da Silva (PT).
"Once regulated, it is the public authority's duty to ensure the safety of bettors, adopting strict measures for the registration and supervision of bets, including advertising, to prevent abusive practices, and to use part of the revenue for public policies supporting education and health," says the professor.
"Contrary to what is claimed in these actions, it is not regulation that drives the increase in betting, but rather the already high volume of bets made by Brazilians, which required the creation of rules for the sector. The structured and rigorous regulation, like Brazil's, not only provides security for bettors but also imposes clear responsibilities on the platforms—exactly what the ADIs claim to seek," says the lawyer.
Protection of vulnerable groups
Vera Chemin states that, although the Betting Law is constitutional, the legislation on the subject lacks greater protection for vulnerable groups, such as the elderly and low-income families.
According to the constitutionalist, this discussion should not be solely based on moral convictions and must focus on the Legislative, which has the constitutional authority to amend the laws, with the institutional support of the bodies that make up the Ministry of Finance, both at the federal and state levels.
"From the moment the National Congress remains inactive, the issue addressed in the ADIs filed with the Supreme Court (STF) will unfortunately further increase the conflicts between a political power that has the duty and constitutional competence to respond to the demands of its electorate, and a technical, apolitical power that must practice self-restraint, despite the obligation to respond to the ADIs filed," she explains.
Change in tone
Since last week, when the billion-dollar spending by Bolsa Família beneficiaries on bets came to light, 32 bills have been submitted to the House of Representatives to toughen access to betting houses, restrict advertising in this market, and combat ludopathy (pathological gambling addiction).
The Lula government is also planning a package of measures, which is expected to include the prohibition of using the Bolsa Família card for gambling. The Ministry of Finance, which regulates the sector through the Secretariat for Prizes and Betting, created in January, announced that around two thousand illegal betting websites will be taken down.
Last year, betting regulation began with Provisional Measure 1.182/23, surrounded by government expectations due to the potential for annual revenue collection from the sector estimated at between R$ 6 billion (US$ 1.1bn) and R$ 12 billion (US$ 2.2bn).
Along with the Provisional Measure, Bill 3.626/23 was submitted to the House, which approved it in a symbolic vote. The approved version included other online games, such as casinos, not just sports betting. The Senate also symbolically approved the proposal, without individual vote counts, but with modifications, sending the text back to the House.
The core text of the bill that led to the Betting Law was ultimately approved by the House with 292 votes in favor and 114 against. At that time, part of the opposition and the evangelical caucus expressed opposition to the regulation.
Discussion at the STF
Lúcia Bettini and Eduardo Bruzzi argue that giving priority to the Legislative does not exclude the participation of the Supreme Court in the discussion.
“It is certain that the STF will need to give its opinion on the potential unconstitutionality of Law No. 14.790/2023, especially now that the Union’s legal disputes with state lotteries are fully underway, causing legal uncertainty for the newly regulated Brazilian sports betting market,” says the lawyer.
“Minister Fux was right to call a public hearing. All interested parties must indeed be heard to create mechanisms for finding a solution to reduce the negative impacts on people's lives,” says Lúcia.
Source: Consultor Jurídico
