The states won, in the Federal Supreme Court (STF), in the Allegation of Noncompliance with a Fundamental Precept (ADPF), distributed under N° 493, in which I was a lawyer together with colleagues João Carlos Dalmagro Junior and Alexandre Amaral Filho, the right to create its own lottery and explore the lottery modalities that are established by Federal Law.
The Lottery should be understood as an institution whose objective is to collect non-tax revenues to finance social security (art. 195, III, of the 1988 Constitution) and other relevant social demands, according to the needs of each State or of the Federal District. It is because of this dynamic, as I maintain in my book ‘Lottery Law in Brazil: concepts and legal aspects’, that, in the Lottery, the player always wins, either with the prize or with the certainty that the value of his bet, when administered by the Government, will have a relevant social destiny.
I also observed, throughout the studies that supported the chapters of the aforementioned book, that, in the Lottery, there is always the relevant public interest. In games of chance, such as Casinos and Bingos, the business is an economic activity in which the main objective is profit, even if it assumes the social responsibilities inherent to all business activities. This objective is what distinguishes Lottery in Brazil and elsewhere in the world.
Lotteries have been in the Brazilian scenario since at least 1844, when the Lotteries of the Empire and the Provincials were created (Imperial Decree of Dom Pedro II, N° 357/1844), a situation that persisted after the Proclamation of the Republic. However, in 1967, Decree-Law N° 204 was edited, an act that limited the activities of State Lotteries, intending to create a monopoly in favor of the Union.
As the Federal Constitution of 1988 guaranteed certain powers to federated entities and did not provide for the Union monopoly over Lotteries (except for legislative powers), these constituted an important source of revenue, in addition to improving control over the market, especially the which is available on the Internet, and offering products responsibly (for example, the responsible gambling program at Caixa Econômica Federal). What is clear is that if the Lottery is a source of benefit for the Union, it will also be for the States and the Federal District.
Therefore, the federated entities and the Federal District are doing nothing more than executing an action they won in the STF. As it is a public service, as understood by the STF in the judgment of ADPF 492 and 493, the Federal Constitution (1988) guides that it be performed by means of a concession or permission (art. 175). State Governments have the autonomy to choose (art. 25, § 1, CF/1988) the best model for the exploitation of lottery modalities in their territories.
The option of granting a single lot for the exploitation of lottery modalities is not new. The State of Minas Gerais made this choice, whose concessionaire is Intralot. Rio de Janeiro also adopted, in 2021, a single-lot contracting model. In the international scenario, the lottery operation by the private sector in a single lot also applies, as is the case in Portugal, where Santa Casa de Misericórdia has the monopoly of operating lottery modalities in that country.
The choice of operating model for lottery activities, whether with a single operator or with several operators, must be guided by the best solution for the public administration and the best results for the State (legality, impersonality, morality, publicity and efficiency), so that, in certain states, concessions by lottery modality or territory, as well as multiple permissions or even authorizations, as provided for sports betting in Law N° 13.756/2018, may be the best alternative.
From the operational point of view, the delegation to a single operator presents lower costs to the regulation and inspection structure of the services, which facilitates the control of the State, in addition to providing greater scale in the joint exploration of the modalities, lower operational cost, lower cost of marketing, greater ease and attractiveness for capturing points of sale and controlling the prices of products. In addition, increased competition from multiple operators can lead to an unwanted cream skimming effect.
I remind you that one of the purposes of the State is the efficiency of the service, which consists of collection and control, with well-defined rules for the market, since the sale of lottery products and related activities must be developed under risk and investment from the concessionaire.
States are facing an opportunity that most countries have been experiencing for many years – in some places, for centuries – and the best results, from the economic, social, security and public health point of view, are verified in the state-regulated markets.
The decision for a single lot, so that only one company assumes responsibilities and risks, meeting the expectations of the states, ensures benefits to the consumer public.
Roberto Brasil Fernandes
Partner and founder of the Brasil Fernandes Advogados office. Trained in International Business and an effective member of the IAB and the special commission on gaming law of the OAB Federal. Author of the book ‘Law of Lotteries in Brazil - Legal Concepts and Aspects’
