In the judgment of ADPF 493, in 2021, the Federal Supreme Court (STF) decided for the non-reception, by the 1988 Constitution, of articles 1 and 32 of Decree-Law nº 204/1967, which prohibited the institution of lotteries by the states and only those existing at the time the aforementioned decree-law was published were in effect. In practice, such devices established the Union’s “monopoly” on lottery services.

The theses that support this decision of the STF, according to the vote of Justice Gilmar Mendes, rapporteur of the case, are the following:

1) the exploitation of lotteries has the legal nature of a public service (article 175, caput, of CF/88), given the existence of an express legal provision;

2) articles 1 and 32 of Decree-Law no. 204/1967, by establishing the Union’s exclusivity over the provision of lottery services, were not accepted by the Federal Constitution of 1988, as they collide head-on with article 25, paragraph 1, of CF/88, by emptying the subsidiary constitutional competence of the Member States for the provision of public services that were not expressly reserved by the constitutional text for the exploitation of the Union (article 21 of CF/88);

3) the private competence 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 operate lottery activities nor the regulatory competence of this exploration. For this reason, Binding Precedent 2 does not deal with the material competence of the States to institute lotteries within federal boundaries, even if such materialization is expressed through state, district or municipal decrees or laws; and

4) on the other hand, the state laws establishing lotteries, whether via state law or by means of a decree, should simply make it possible to exercise 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 that can be exploited by the states.

In line with what was decided above, Federal Law No. 13,756, of 12.12.2018 should be interpreted. This diploma establishes the modalities of permitted lotteries, pursuant to article 14, paragraph 1, transcribed below:

“Article 14. The product of the total collection obtained through the capture of bets or the sale of lottery tickets, in physical or virtual means, will be destined in the manner provided for in this Chapter, subject to the provisions of Chapter V of this Law or in a specific law . §1 The following are considered lottery modalities: I – federal lottery (passive type): lottery in which the player acquires a ticket already numbered, in physical (printed) or virtual (electronic) media; II – lottery of numerical predictions: lottery in which the player tries to predict which numbers will be drawn in the contest; III – specific prognosis lottery: lottery instituted by Law No. 11,345, of September 14, 2006; IV – sports prediction lottery: lottery in which the player tries to predict the outcome of sporting events; and V – exclusive instant lottery (Lotex): lottery that immediately shows whether or not the player has won a prize.”

Although some of the aforementioned modalities are defined by federal legislation as exclusive to the Union (this is the case of the passive lottery described in item I of paragraph 1 of article 14, the specific prognosis lottery described in item III of paragraph 1 of article 14, and the fixed-quota lottery provided for in article 29 [1], all of Law 13,756/2018), the interpretation that the Union is authorized to reserve specific types of lotteries for itself, to the detriment of the States, does not seem correct.

This is so much the case that some states have authorized the holding of concessions including all types of lotteries admitted by federal legislation, even if some of these types are qualified, by that same legislation, as exclusive to the Union.

The state of São Paulo, for example, published Decree No. 66,524, of 23.02.2022, which authorizes the granting of the following types of lotteries (Article 1):

“I – fixed odds betting lottery; II – specific prognosis lottery; III – sports prediction lottery; IV – numeric prediction lottery; V – instant lottery; VI – passive lottery.”

In the same sense, the Federal District enacted Law No. 7,155, of 06.10.2022, which institutes the Federal District Lottery Public Service, consisting of “game or bet involving a draw, numerical prediction contest, specific prediction contest, sports predictions and instant lottery” (article 1, sole paragraph).

More succinctly, Law No. 11,236, of 01.18.2021, Espírito Santo establishes that this federative entity “shall explore, directly or indirectly, the same lottery modalities that have been legalized by the Union” (article 1, caput); and Law nº 5.720, of 23/9/2021, of Mato Grosso do Sul, establishes that the state will explore “directly or indirectly the same modalities of lottery activities defined by federal legislation” (article 1, caput, paragraph 1).

There is an important federative reason that justifies this position — although it was not included in the discussions of the STF in the scope of ADPF 493: if the states could not adopt the same lottery modalities as the Union, it would be very easy for the latter, by indirect means , unconstitutionally restrict the competence of the other federative entities to institute their own lottery services, reserving the most profitable modalities for themselves and allowing the states only those modalities that were not in their interest. In this case, restricting the exercise of powers by other federative entities (states and municipalities) is as serious and unconstitutional as simply prohibiting such powers.

The recognition that there is an autonomous competence (better said: symmetric) of the States in relation to the Union, also implies the recognition that such entities do not depend on the regulation of the Union to fully exercise their competence to exploit the public service of lotteries. As long as they do not create new modalities, different from those provided for in federal legislation, the states are free to, by law or decree, adopt “mere adaptive provisions for the provision of the public service of lotteries to the respective states, not overflowing, therefore, from the legislative discipline of the Union envisaged for itself”.

Thus, the fact that some of the regulations provided for in federal legislation — such as those described in articles 5, X, 14, §5, 21, §4, 23, 26, 28, 29 and 35 of Law No. 13,756/2018 — do not having been edited, does not prevent the States from fully exercising their competences related to the exploitation of public lottery services.

It should be noted that what is exclusive to the Union, with regard to lotteries, in line with what the STF decided, is formal-legislative competence, and not material-administrative competence. Indeed, Article 22, XX, of the Constitution establishes that it is the exclusive responsibility of the Union to “legislate” on “systems of consortia and raffles” (it is understood that lotteries are types of raffles). If the federal legislator decides to leave certain aspects of legislative discipline to be completed by regulations, it cannot be required that they bind the other federative entities or, in case of omission in their edition, that they prevent the latter from exercising their material powers of provision of lottery services.

The decision of Congress to assign to the Executive Power the edition of normative complementation related to the lottery service, in an interpretation that privileges the administrative autonomy of the States and municipalities — guaranteed, respectively, by articles 25 and 30 of the Constitution —, can only be applied to the Union ; it will mean, with regard to other federative entities, a real normative gap that can be filled by local legislation, if this proves to be essential for the exploitation of services and does not constitute innovation regarding the lottery modalities adopted by federal legislation.

Lottery services, in the system of the 1988 Constitution, can be exploited by all federated entities, constituting a non-tax source of revenue that should absolutely not be neglected.

[1] See: “Article 29. A lottery modality is created, in the form of an exclusive public service of the Union, called fixed-quota bets, whose commercial exploitation will take place throughout the national territory. §1º The lottery modality dealt with in the The caput of this article consists of a betting system related to real sports-themed events, in which it is defined, at the time of placing the bet, how much the bettor can win in case of a correct prediction. authorized or granted by the Ministry of Finance and will be operated exclusively in a competitive environment, with the possibility of being sold in any commercial distribution channels, physical and virtual. §3 The Ministry of Finance shall regulate within a period of up to two years, extendable for up to the same period, as from the date of publication of this Law, the provisions of this article”.