The judgment of ADPFs 492 and 493 by the Supreme Federal Court, held on September 30, 2020 under the report of Minister Gilmar Mendes, recognized the absence of a federal monopoly for the exploitation of lottery services in Brazil and, consequently, declared Articles 1 and 2 32 of Decree-Law 204/1967 unconstitutional.
The practical impacts of this decision are already beginning to be seen. For example, in the judgment of ADI 3050, whereby the same STF recognized the constitutionality of State Law 10,959 / 1997 and State Decree 40,593 / 2001, both from the State of Rio Grande do Sul. The case dealt with the creation of the Loteria do State of Rio Grande do Sul and its betting modalities, instituting two modalities: “Bingo Tradicional Gaúcho” and “Videoloteria”. The first deals with the “sale of cards for the draws of dozens held in special rooms, with the distribution of prorated prizes in cash or prizes for durable goods”; and the second was defined as “bets placed on individual electromechanical or electronic equipment, equipped with a video monitor, containing a random generator of numbers, symbols, figures, cards or letters, with the distribution of cash prizes.”
The judgments of these actions had not yet been published when this article was written, so we are based on the leading votes of the two decisions, made by Minister Gilmar Mendes, whose contents are similar.
The Union's private competence to legislate on consortium and sweepstakes systems (art. 22, item XX, of CF / 88) does not preclude the material competence of States to exploit lottery activities or the regulatory competence of that exploitation. For this reason, Súmula Vinculante 2 does not deal with the material competence of States to institute lotteries within federal boundaries, even if such materialization is expressed through state, district or municipal decrees or laws.
On the other hand, state laws that institute lotteries, whether via state law or by decree, must simply enable the exercise of its material competence as a public service institution authorized by the Member State, so that only the Union can define the modalities of lottery activities open to exploration by the States.
This aspect of the decision is very well explained in the following excerpt from the vote:
Thus, in short, it seems to me right to infer that the state (or municipal) laws that establish lotteries in their territories only convey material competence that was granted to them by the Constitution.
Such state norms, whether laws or decrees, would only offend the Federal Constitution if they instituted lottery discipline or modality not foreseen by the Union itself, given that, in this case, state law would depart from its materializing character of public service of which the State (or municipality, or Federal District) is the holder, this is incompatible with art. 22, XX, of CF / 88.
The guiding vote in the decision of ADPFs 492 and 493 assures that state (or municipal) lotteries "would only offend the Federal Constitution if they instituted discipline or lottery modality not foreseen by the Union itself." This conclusion, perfect in itself, makes room for the following questions:
Now, after the ADI 3050 trial, the question arises whether the law of other federal entities can create other modalities.
We will probably have to wait for the publication of the judgments of the inevitable embargoes of declaration in order to have greater clarity regarding (at least some) of these issues. Until then, we will certainly live in an environment of greater legal uncertainty, but also of intense market movements, with potentially 5,598 lotteries in operation in the country (1 federal lottery, 26 state lotteries, 1 from the Federal District and 5,570 municipal ones).
Luiz Felipe Maia and Flavio Augusto Picchi
FYMSA - Franco, Yoshiyasu, Maia e Silveira Advogados
