The government is in a legal dispute with four states to try to eliminate what it considers a risk to foreign investors entering the lottery market. For the Federal Government, the exploitation of lotteries by Minas Gerais, Rio de Janeiro, Ceará and Paraíba is illegal.
But state governments disagree with a 1967 decree-law, which established the Union's monopoly on exploitation, and still seek the right to offer and expand the services provided in court.
The Ministry of Economy tries to prevent the operating lottery companies from continuing to operate and called the Attorney General's Office (AGU) for this task. Sought, the AGU reported that "it has been adopting all the judicial measures to maintain the effects of the current legislation on the subject."
At least three cases are under discussion at the Federal Supreme Court (STF). According to the press office of the STF, the actions have already been released for judgment by the rapporteur, Minister Gilmar Mendes. However, so far, they have not been guided by the Presidency, and there is no provision for inclusion in the agenda.
The discussion gains more relevance at a time when the government seeks to open the lottery market. In an interview with local media Valor last month, Waldir Eustáquio Marques Júnior, undersecretary of Prizes and Raffles of the Ministry of Economy, stated that the existence of state lotteries was one of the factors that removed the interest of some companies in Lotex, granted to the private sector at the end of last year.
Now, the government wants to publish by March a decree to regulate sports betting by fixed quota, not yet offered in the country. The idea is to attract large international companies to the sector.
The impasse between government and states began in the 1960s. Before the 1988 Constitution, the 1944 decree-law created the lottery service and determined that the Union (Brazil is a Presidential Federated Republic composed of the Union, States, Federal District, and municipalities) and states could exploit the products. Then, in 1967, another decree-law partially revoked the previous one and established that the exploitation of games constitutes an "exclusive public service of the Union."
The decree further determined that the creation of state lotteries would no longer be permitted. With respect to the acquired right, the new legislation made it possible for the lotteries created before publication to remain in operation. According to the Ministry of Economy, 16 states operated before the decree - among them, the four that still work. After publication, eight others created or tried to create lotteries.
The economic team argues that, in addition to the 1967 decree, the Constitution establishes that it is up to the Union to legislate on consortium and draws systems and that a binding summary of the STF, of 2007, ratified that “the State or District law or normative act is that provides for consortium systems and sweepstakes is unconstitutional."
"Based on administrative acts established in the last four years showing the illegality of these operations, the vast majority of state lotteries have been closed due to unconstitutionality (most of them) or by an act of the state executive", says the Ministry of Economy, in a note. The exceptions were Minas Gerais, Ceará, Paraíba, Rio de Janeiro and Piauí.
In 2017, Piauí ended the exploration of lotteries as a result of an administrative proceeding initiated by the former Sefel of the Ministry of Finance - current Secretariat for Evaluation, Planning, Energy and Lottery (Secap) of the Ministry of Economy. In the case of Minas Gerais, there was a decision against the state lottery, but last year, a judicial act paralyzed the referred process. In the case of Ceará, Paraíba and Rio de Janeiro, there is still discussion in the judicial sphere.
The legislation causes various interpretations and the processes are questioned by the Brazilian Association of State Lotteries (Able). The president of Able, Roberto Rabello, said that the entity proposes that all states can create, if they wanted, their lotteries. "There must be legislation that is valid for everyone," he stressed. He also criticizes the fact that existing state lotteries have restrictions on the creation of new products. "We fight for isonomy," he stressed.
Author of one of the processes in progress at the STF, the association states that the legal actions and administrative processes of the Union violate "fundamental precepts of the federative principle and of equality between the federal entities" and that it is essential to "check pre-constitutional rules that generate legal uncertainty for States."
The argument cites the cases of Rio de Janeiro and Minas Gerais, which have been operating for more than 75 years. Loterj, from Rio de Janeiro, collected R$ 183 million (US$ 42.7m) last year with the Raspa Loterj family products, Rio de Prizes and Triple Chance, of which R$ 82.9 million (US$ 19.4m) were allocated to the awards. Of the net profit, 70% goes to projects and social actions.
Source: Valor Econômico
