STF Should Resume the Trial of State Lotteries

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STF should resume the discussion on the case of state lotteries
Photo: O Estadão

Brazilian states and the gaming industry are waiting for them to have legal certainty based on a definitive resolution of the Supreme Federal Court (STF) after years with injunctions supported by a decree still in the 60s on state lotteries.

This Wednesday, 30, the STF may return to the case. Reporting by Gilmar Mendes, the Direct Action of Unconstitutionality (ADI) n. 4,986 and the Fundamental Precepts of Non-Compliance (ADPF) n. 492 and 493 ponder on federal monopoly in lotteries.

Since the lottery sector is still managed by Decree-Law no. 204 of 1967, which determines that the exploitation of the games is exclusive of the Union without possibility of concession and carried out by Caixa Econômica Federal.

With regard to state lotteries, it is established that the situation be preserved at the time, without the launch of new categories and imposing that the existing modalities cannot expand their emissions. In other words, the law predates the 1988 Federal Constitution

State lottery case

Today, 15 states are allowed to explore this lottery sector. However, 11 states and the Federal District are unable to take advantage of this same apparatus.

This is because, in the period of publication of the Decree, the state lotteries that were already operating can continue. Except that the states that did not have properly formed modalities, are not able to exploit this activity until today.

The STF judgment can define the autonomy of Brazilian states to take advantage of these categories, aiming to manage and adjust to the current context and ending the Union’s monopoly.

For this reason, this decision is relevant to the states, especially in a period of readjustment of revenues and expenses in the face of investments made to deal with the new coronavirus pandemic.

It is worth mentioning that the collection of lottery draws serves to finance the area of ​​social security, that is, health, social security and social assistance. For this reason, state lotteries tend to represent a powerful collection mechanism for state governments.

Currently, these state lotteries deal with a number of court orders and inquiries that do not provide legal certainty for their operation and expansion. Since games are eventually banned from trading or their draws are suspended.

The need for a new regulatory framework for gambling in Brazil

Thus, the STF decision can provide states with legislative interpretation so that they can continue operating state lotteries or start and expand services.

In addition, it is essential to promote a new regulatory framework for games in the country in order to progress and achieve primary investments for the Union and States.

The interest of national and international investors is evident in exploring business opportunities in the gaming sector in Brazil, as long as they have legal certainty and adequate inspection and control mechanisms.

In this way, the definition of the judgment referring to state lotteries can also represent a starting point for reviewing several outdated concepts.

After all, it does not make sense for large investments, especially international ones, to be made based on business sustained in injunctions and, therefore, viability goes directly through the STF this Wednesday.