As previously reported, on that historic afternoon of September 30, 2020, with the Presidency of Minister Fux and with a leading vote by Minister Gilmar Mendes, the Brazilian Constitutional Court unanimously confirmed the need for equal treatment between the Union and the other entities of the Federation, in relation to the ability to explore public lottery services, provided that the contours outlined by federal laws are respected.
In summary retrospect, the State of Rio de Janeiro and the Brazilian Association of State Lotteries (ABLE), in October 2017, joined the STF aiming at the declaration of non-receipt of devices of Decree-Law no. 204/67 by the 1988 Political Charter. The Decree-Law contained provisions that prevented some States from fully exploiting their lotteries and others that could not even do such exploration. In summary, these situations are not supported by the Brazilian Constitution, as was very well outlined in the votes of the Ministers of the Supreme Court.
So, in the past 30 days, we received some consultations, participated in teleconferences and faced with some reflections that, in turn, will be highlighted in this article, whose purpose is to stimulate the debate between public and private agents.
The first is the construction of the regulatory framework for state lotteries. That Court ensured a right of symmetry, let us see an excerpt of the vote of Min. Gilmar Mendes: “(...) This is because art. 22, XX, of the Constitution confers private competence of the Union only to legislate on the matter. Since the expected competence is only formal, this provision cannot be extended to also generate exclusive material competence for the federative entity, which is not included in the tax list provided for in art. 21 of the Constitution.” In simpler lines, what is treated in federal law as a public lottery service, it will be up to the other entities to deepen the respective exploitation models.
Hence the same Minister concludes: “(...) Such state rules, whether laws or decrees, would only offend the Federal Constitution if they instituted discipline or lottery modality not foreseen by the Union itself, given that, in this case, the state legislation would depart from its materializing character of the public service of which the State (or municipality, or Federal District) is the holder, which is incompatible with art. 22, XX, of CF / 88.”
In effect, those federated entities that wish to explore lottery services, will have to draw a parallel with the lottery modalities (or games that receive bets) present in federal legislation, and may even use the decree as an internal normative source under certain conditions. Continuing and taking an extreme example, states (and municipalities) cannot explore bingos - they do not have this autonomy, as federal law does not have such a provision. For the same reason: they also cannot operate slot machines (which is different from ticket vending machines). It may even seem childish to give these examples, but, oddly enough, we were asked about such topics.
Another reflection is on the exploration model. It is worth checking whether the model will be directly exploited (by contracting services) or by concession. For each macro model, so to speak, the applicable legal regime is different (Law No. 8,666 / 93 and Law No. 8,987 / 95). The choice of regime directly influences the contracting model, object, duration and, mainly, the economic-financial model of the exploration.
Let's illustrate a little. Supposing that the concession regime is the preferred model, mainly because it allows more investments due to the terms for the amortization of capital, this regime talks about the modality of the fare (articles 6 and 11 of Law 8.987 / 95), at the same time that talk about the value of the grant (art. 15, II of the same law). Once again getting to the point: there is a correlation between the fare (the lottery will be the ticket price) and the grant price, because the higher the grant value, the greater the impact on the price composition of the ticket offered to the public. And, considering that the concessions are public contracts with long-term validity, the modeling of the event will be crucial to establish a sustainable economic relationship between the granting authority and the concessionaire (economics of the contract).
Still talking about concession in the lottery sector and for the sake of illustration, let's make it clear, a question arose about the possibility of investment funds participating in the competitions and, consequently, obtaining concession contracts. This is a very radical idea, isn't it? To begin, it is salutary that the Public Administration seeks to select the best proposal among qualified legal persons, that is, with some history of achievements in the concession sector. An investment fund, from the start, would not have such quality. It can enter the capital of companies or lend them resources, but it cannot act directly as a public service concessionaire, as its nature is an investment vehicle - for this simple approach, it does not seem to be a viable option in many ways.
Another reflection is about the knowledge of the market and its real appetite. There are few studies on the Brazilian gambler - his consumption habits in relation to betting. Everyone knows that Brazil is a huge market, but what exactly is its size? And which games will be attractive? And the regional aspects? These studies are relevant, do you agree?
Not wanting to go on too long, we still have the following theme: the culture of Brazilian Public Administration. This issue alone deserves a treatise, it is worth noting. Knowing the Administration's modus operandi is essential to be successful in hiring in focus. Brazil has a notary tradition, so to speak, and this means little or no incentive to public agents with regard to the use of composition and conflict resolution techniques in the course of the contractual relationship. So knowing the rules is not enough, but it is necessary to understand what are the mechanisms of incentives and cooperation possible between public and private agents in the course of a contract.
In view of these reflections, the message we would like to leave is: cautions are still necessary in this new horizon, both for the legal and regulatory improvement, as well as for attracting the investments sought by the Public Power.
MARCELLO M. CORRÊA
Lawyer and Master in Political Science, former legal director of Lojerj, with over 20 years of experience with the public sector and author of articles on Administrative and Economic Law.
