The initiative of Joaquim Gomes municipality is part of a growing movement. Since the end of 2023, more than 70 Brazilian cities have approved similar laws in search of new revenue sources to fund local public services such as health and education. Despite this trend, the federal government — through the Secretariat of Prizes and Betting (SPA) — is attempting to block such initiatives.
The public session for receiving proposals and bids is scheduled for November 27 at 9:30 AM. The bidding will take place electronically via the BNC system. The concession period will be 20 years, renewable for an equal term.
Municipal authorities estimated initial revenue at around R$ 245,000 (US$46,300) However, they emphasized that the final contract value will depend on the winning bid, as the main criterion for awarding the contract is the highest percentage offered as variable concession payment.
Minimum transfer and evaluation criteria
According to the city government, the percentage of gross lottery revenue transferred to the municipality cannot be less than 5%, as specified in the bidding notice. The bidder offering the highest percentage above this minimum will be the provisional winner.
Unlike other bidding processes, this one will not require proof of previous experience (technical capability certificates), minimum share capital, or initial investment on the part of the winning company.
Proof of Concept replaces experience certificates
Due to the “technological complexity and innovation involved in the project,” the company’s technical capability will be assessed through an Operational Proof of Concept (PoC), the Joaquim Gomes administration noted.
“The provisional winner will have five days to present and demonstrate the requirements and functionalities of the proposed lottery solution, replacing the traditional requirement for certificates of prior experience,” the notice explains.
The full bidding document, with details on each game modality, is available in the annexes and can be accessed on the official BNC Compras website and on the PNCP portal.
Dispute with the federal government
Despite municipal advances, the Federal Government — through the Secretariat of Prizes and Betting (SPA) of the Ministry of Finance — considers the practice irregular.
The controversy stems from the interpretation of Federal Law No. 14.790/2023, which regulates fixed-odds betting (‘bets’) and states that only the Union, states, and the Federal District may offer such services — without mentioning municipalities.
City governments, on the other hand, argue that the absence of a prohibition in the law, combined with previous Supreme Court (STF) decisions that ended the federal monopoly on lotteries, creates a legal opening for municipal authority.
Risks and next steps
According to specialists, the proliferation of municipal lotteries could pose risks to the betting market and to bettors, including:
- Reduced consumer protection: Federal law requires betting companies to pay a R$ 30 million (US$5.5m) license fee and follow strict compliance rules. Under municipal laws, these requirements are weaker, which could reduce consumer safeguards.
- More difficult and costly oversight: If every municipality creates its own lottery, the federal government would need to oversee services potentially offered in more than 5,000 cities — not just the 181 websites authorized today. This would significantly increase enforcement costs.
Source: GMB / g1
