Thus, a single company may operate lotteries in different states and advertise these services anywhere.
Also known as the Sports Betting Law, the regulation was sanctioned on the penultimate day of 2023. The case under review concerns only modalities such as number lotteries, numbered ticket lotteries, and instant lotteries. Fixed-odds betting, known as ‘Bets,’ is being challenged in a separate case.
The lawsuit regarding lotteries was filed last year by the governors of São Paulo, Rio de Janeiro, Minas Gerais, Paraná, Mato Grosso do Sul, Acre, and the Federal District. Still in 2024, the Attorney General of the Republic, Paulo Gonet, defended the validity of the contested provisions.
The minister Luiz Fux considered that there is no reasonable justification for prohibiting the granting of lottery services to the same economic group in more than one state. Fux emphasized that this is not provided for in Article 175 of the Constitution, which addresses concessions or permissions for the provision of public services.
He agreed that companies with the technical capacity to provide more efficient services would be forced to compete for concessions in more populous and profitable states. This would harm smaller states, which would lose potential revenue and be forced to sign contracts with companies that are “tendentially less qualified.”
The impact would be felt by consumers: without the “more economically capable” companies, these states are likely to face higher costs, for example. In other words, the regulation does not guarantee consumer protection.
According to the magistrate, the prohibition of providing lottery services in more than one state weakens the revenue potential of the federated entities in favor of the Union, since the full operation of state lotteries could reduce the revenue of the Federal Lottery.
Fux also considered that there is no valid justification for preventing states from adopting “advertising strategies that make the most sense to them, according to their business planning.” After all, the law already prohibits a state from offering lottery services to people located in another state’s territory.
The minister further pointed out that it may make sense for a state to promote marketing actions in events held in other states, provided that the broadcast reaches the audience located within its territory. This is the case, for example, with marketing campaigns in sporting events or even athlete and tournament sponsorship systems, widely publicized in the media.
“It does not seem reasonable, for example, that the lottery service of a given state cannot sponsor an athlete or a professional football team that will compete in another state or even abroad,” he explained.
“Nor does it seem reasonable that a state lottery cannot, for instance, carry out a marketing campaign during a Brazilian national football team match abroad, just because the event physically takes place outside the territorial limits of the granting state.”
Although they followed the rapporteur, the other ministers made minor reservations to stress that the Legislature may still limit the states’ authority to organize the provision of their respective public services, in order to protect the economic order and foster a healthy competitive environment.
Source: Conjur
