The STF agreement published this Wednesday (15) is a historical document for the State and Federal District Lotteries. This refers to the materialization of the judgment of ADPF 492 (RJ), ADPF 493 (ABLE) and ADI 4986 (MT), in which the competence of the aforementioned federative entities was rescued to operate the lottery and, consequently, a decentralization in political organization and distribution of power in the Lottery market.
The judgment of the lawsuit that has been pending before the Court since 2017, declared the provisions of Art. 1, “caput” and § 1 art. 32 of DL 204/67, which set the “exclusive public service of the Union” to the exploration of lottery activities and the creation of new lotteries.
The thesis we defend in the STF, was that, according to the 1988 Federal Constitution, states have the prerogative to explore material competences that are not exclusive to the Union; this normative tonic, also known as “residual competence”, see art. 25, paragraph 1 of the Constitution, is the essence of the federative form of the Brazilian state, and it is indispensable for the promotion of the decentralization of power, as well as its independent and harmonious exercise by all entities submitted to the Federal Constitution of the Republic.
In accepting our arguments and legal foundations, the reporting Minister untied an important distinction, which is worth remembering: legislative competence and material competence are not to be confused. So that, although it is recognized as private to the Union, to legislate on draws and consortia - as pacified by the Súmula Vinculante no. 2 -, this does not exclude the administrative competence of the states and the Federal District, within the scope of their residual competence.
The rapporteur's vote fixed his reasons for deciding (ratio decidendi) that the states and the DF are authorized to explore all the lottery modalities already provided for in federal legislation; this Supreme Court ruling gives legal certainty to the initiatives of federated entities and, consequently, to contracts with the private sector (in the case of indirect exploitation).
As a result of this judgment, a relevant issue has been debated regarding the possibility of municipalities taking advantage of the possibility of also exploring lottery modalities. Regarding differing opinions, our position is that this would not be possible. When the vote of the reporting minister affirms that “federal law cannot impose a restriction on the exploitation of public services on any federal entity other than those already provided for in the constitutional text”, this passage must be read carefully and within its context. The reference to federatives is restricted to the states and the Federal District, excluding the municipalities, since the latter have their competences expressly provided for in the Federal Constitution, without taking advantage of the same logic that assists the states and the Federal District through the system of art. 25, §1º.
The competence of the federated entities, without including the municipalities, is not new in today's legislation or in the 1988 Constitution. It is seen that both the Penal Contraventions Law of 1941, in its art. 51, and Decree Law 6259/44, art. 1st and following, contemplate only the states for the exercise of the public Lottery service.
The same dynamics of competence distribution was already present in the Federal Constitution of 1946 in art. 18. § 1 and in the 1967 Federal Constitution in art. 13, paragraph 1, as well as in the current Federal Constitution in art. 25, § 1, where it is stated that "powers are reserved to states that are not prohibited by this constitution". This part of the Constitution cannot be interpreted extensively to the municipalities, as "competences are reserved to the states."
As the rapporteur well defined it: there was a legislative tradition in Brazil to recognize the exploitation of lotteries by the states, and Decree-Law no. 204/67 was an exception to this constant; a normative “island” that, in truth, was out of step with the historical evolution of the matter in the country.
In addition, if the 1988 constituent wanted to establish the same normative and systematic focus on the municipalities that it conferred on the states (residual competence), it would have done so expressly.
In this sense, it is necessary to diverge from the imprecision of the vote of Minister Alexandre de Moraes. The vote, despite affirming its adherence to the vote of the rapporteur, it disagrees with the fundamentals of this by implying that the municipalities would have the same powers attributed to states - competences that, however, are not provided for in the Federal Constitution.
The interpretation of this judgment must consider the ratio decidendi fixed at the end of the vote of Minister Gilmar Mendes, where he expressed the following premise: “[iii.] The Union's private competence to legislate [...] does not preclude material competence States to explore lottery activities or the regulatory competence of that exploration.”. Where “states” are read at this point of the vote, it is also permitted to read “Distrito Federal” under art. 32, § 1 of the Federal Constitution - which cannot be said in relation to the Municipalities. Therefore, any initiative to create a municipal lottery seems to be a daring legal adventure.
We must be guided by the reasons for deciding announced in the conducting vote of the rapporteur, not least because all other ministers followed the respective vote, whose judgment does not even have an appeal with a devolutive effect, being provided for only possible embargoes of declaration.
In addition, regarding the issue of municipalities, this matter has already been the subject of a recent review by the Supreme Court, in the judgment of ADPF 337 / STF, without ignoring the fact that the basis of that decision was based on the notorious, now invalid DL 204/67.
The practical importance of this judgment is the decentralization of power, which had been unconstitutionally extracted from the states since 1967. With the resumption of this traditional prerogative of the states, through lotteries it is possible to promote extremely important direct revenues and, therefore, to promote fundamental rights at the state level, especially of a social nature, in addition to other secondary benefits such as product supply control, sport integrity, fiscal control over the allocation of resources and protection against ludopathy.
It is up to the states and entrepreneurs who wish to invest in this sector, the responsibility for the next initiatives so that the economic and social potential of this new market is used in the most efficient, republican and citizen way in the pursuit of the social purposes of lotteries.
Roberto Carvalho Brasil Fernandes
Alexandre Amaral Filho
Rafael Biasi
Specialized lawyers from Brasil Fernandes Advogados Associados law firm
Exclusive for Games Magazine Brasil
