Government of Paraíba regulates exploitation of the lottery service for private initiative

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Photo: Rizemberg Felipe/Jornal da Paraíba/Arquivo

Governor João Azevêdo signed State Decree No. 41,037, which refers to the regulation of the Paraíba State Lottery (Lotep). The government is based on the decision of the Federal Supreme Court (STF) that granted the states conditions to explore lottery services, ending the Union’s exclusivity.

The State Decree is based on the Supreme Court’s resolution of September last year, published in a judgment on December 15, which considered the Fundamental Precept Non-Compliance Arrangements (ADPFs) 492 and 493 to be valid, and unanimously determined that the Federal Government does not have a monopoly on lotteries.

Thus, the lottery is a public service provision and can be exploited by state governments, as long as they respect federal government regulations.

According to the Decree, Lotep will be responsible for: “planning, coordinating, authorizing, accrediting, licensing, directing, executing, distributing and controlling activities related to the exploitation of lottery and similar games, including electronic and physical and digital gaming, in compliance with the legislation federal law on the matter; promote and implement game plans, programs and projects aimed at exploring the lottery market and the like; articulate with similar institutions from other units of the federation, with a view to combining efforts and achieving common goals; carry out prize draws, ratify the results; proceed with the payment of prizes, related to the sweepstakes of creation and full execution; promote the issuance and distribution of lottery tickets; supervise activities related to the exploitation of lottery and similar games; disciplining by ordinance the exploration of lottery activities; and develop other related activities ”.

Paraíba lottery revenue

In addition, the regulations provide as sources of revenue for the Paraíba lottery: “the result obtained from the sale of lottery tickets; budget allocations consigned in their favor; resources from the signing of contracts, accreditations, licenses, covenants and agreements; revenue from the sale of movable and immovable property that is not part of its assets; provision of administrative services resulting from the transfer of ownership in contracts, signed by sale, succession or others; provision of administrative services resulting from the mandatory annual renewal of contracts; the provision of digital service by multiplatform and streaming applications; provision of the service of analysis of draw plans submitted by companies / interested parties; provision of the service for carrying out separate draws; registration of promotional campaigns; provision of the service for conducting sweepstakes which are the subject of campaigns; use of the LOTEP brand by third parties, with an emphasis on the credibility of the state agency; other occasional incomes, including those resulting from the provision of services ”.

State lotteries

The decree also prevents the realization of any lottery service in Paraíba without the due authorization of Lotep, except for the modalities already explored by the Federal Government.

The public activity that completes the exploration of the lottery sector, for this purpose includes: “traditional or conventional lottery; instant lottery; lottery system online and in real time; special lottery (permanent or occasional); mixed lottery; numerical prognosis lottery; and fixed odds betting ”.

According to the determination of the STF, the exploitation of lotteries is characterized as a public service and the federal legislation cannot place any state: “restriction to the exploitation of public services beyond that already provided for in the constitutional text (article 175)”.

Therefore, the Supreme Court confirmed that the Union’s competence to legislate in lottery and consortium systems does not represent an obstacle for states to also create and manage their own lotteries. However, the Federal Government is the only one that can establish the lottery modalities that are to be explored by the states.