Economist Alexandre Manoel and lawyer Roberto Brasil Fernandes analyze the current state of game regulation in Brazil in an article for Jota. In it, the authors point out the "unfounded" article of Law 14790/2023 that prevents a company from having a sports betting license in more than one federal entity. Another misunderstanding comes from cities seeking to create their lotteries. "The decision of the Supreme Federal Court only allowed states, and not municipalities, to explore these services."
The Lula 3 government has continued to regulate reforms made since 2016, such as those in the railway and betting games sectors, although it is intensifying state intervention in the economy, which creates obstacles to productivity gains. Other difficulties in this regulatory process stem from the lack of more actions by the Executive, as well as the Legislative and Judiciary, in order to realize the potential growth gains for the country.
In this article, we suggest actions by state Executives and the Judiciary, so that there is more effective regulation of the Brazilian betting games market, which moves approximately R$ 220 billion, or 2% of the GDP, according to estimates from the Family Budget Survey (IBGE, 2017).
Of this amount, sports betting and online games move about R$ 120 billion, with the Central Bank having already tracked half of it. It is not, by the way, entirely new money; we estimate that about 80% of this amount already existed, being transacted through illegal activities.
The high volume is striking and causes suspicion that there is a decrease in revenue in the same magnitude in other sectors due to specific reports of uncontrolled betting (cases of ludopathy). It is necessary to expedite the regulation of this sector, both to increase supervision and to implement responsible gaming, with a view to moderation, as advocated by the catechism of the Catholic Church (§ 2413).
In this sense, two recent legislative understandings have drawn attention for their potential to increase legal insecurity, making the market unviable or preventing companies and honest people from participating in it.
The first step back was sponsored by the federal Executive and approved by the National Congress. It is article 35-A, § 2°, Law 14.790/2023, which prevents a company from having a sports betting license in more than one state. This understanding is so unfounded that we even believe it violates the stone clause related to the federative form of state.
The second concerns the understanding of some mayors that municipalities can operate lotteries. In this case, there are also honorable exceptions, such as the mayor of Ribeirão Preto (SP), Duarte Nogueira (PSDB), who vetoed the bill that authorized the creation of a municipal public lottery service, recalling that the decision of the Supreme Federal Court (STF) allowed only states, and not municipalities, to explore these services.
The correct understanding of the mayor of Ribeirão Preto is based on the winning thesis that allowed states and the Federal District to operate lotteries, resulting from the actions judged by the STF, based on requests made by the Brazilian Association of State Lotteries (ABLE), author of ADPF 493, and by the state of Rio de Janeiro in ADPF 492. In addition, several states of the federation joined as amici curiae.
Defenders of municipal lotteries argue, on the other hand, that it is possible to identify evidence that municipalities were also contemplated based on the votes of some ministers, such as Gilmar Mendes and Alexandre de Moraes. However, it should be noted that such statements were only said in passing (obiter dictum).
Indeed, the discussion of the aforementioned ADPFs did not even touch on the municipal issue: of the 11 legal opinions attached to the initial of ADPF 493, plus the 5 presented in ADPF 492, none dealt with the issue of municipalities; of the amici curiae, none was a municipality or organization representing them.
The discussion went through the themes of federalism, equality among federal entities, the differentiation between legislative competence and material competence in the interpretation of Binding Precedent 2 and the institute of residual competence, pertaining to the states and DF, of art. 25, §1º, of the CRFB/88.
Furthermore, the concept of local interest and the preponderance of this interest, inherent in art. 30 of our Constitution, were not ventured by any of the procedural actors, nor by the ministers of the court. In other words, in the device of the decision, the STF did not provide anything about the extension of the judgment to the municipal entities.
It should also be noted that currently the STF "does not" adhere to the so-called theory of the transcendence of determining reasons, which holds that the binding effects of the decision would be related not only to the device, but also to part of the reasoning of the ministers' votes that influenced the conclusion of the judgment. In other words, according to the jurisprudence of the STF, one cannot extract from the judgment of ADPFs 492 and 493 something that is not clarified in the device.
It is worth remembering, moreover, the content of art. 32 of Decree-Law 204/67, which indicates what was the object of the norm at the time, restricted only to the issue involving state lotteries: "maintaining the current situation [...] the creation of state lotteries will not be allowed".
Therefore, there is no precedent from the STF favorable to the claim of municipalities that wish to establish their own lottery.
Finally, the hermeneutics of the current legal order teaches that only a complementary law issued by the National Congress can authorize a state to allow the municipalities within it to operate a lottery, by combining item XX and the sole paragraph of article 22 of our Constitution.
In view of the above, we alert that it is necessary for state Executives to position themselves (in relation to the claim of municipalities that want to operate lotteries) through the filing of a Direct Action of Unconstitutionality and that the STF decide, with the aim that the regulation of games with betting be effective in the Brazilian market, so that we are not taking one step forward to then take two steps back.
Alexandre Manoel
Chief Economist at AZ Quest and former Secretary in the Ministries of Economy/Finance (2018-2020)
Roberto Brasil Fernandes
Lawyer and author of the book "Law of Lotteries in Brazil"
The Senate Constitution and Justice Committee holds a deliberative meeting to analyze a single item: Bill (PL) 2.234/2022 that authorizes the operation of casinos, bingos, and the animal game in Brazil. At the meeting last Wednesday (12), Senator Irajá presented a new report. Given the disagreements on the matter, the president of the CCJ, Davi Alcolumbre, decided to postpone the discussion and analysis to this Wednesday (19).
The PL 2.234/2022, approved in the Chamber of Deputies as PL 442.91, was presented in that House in 1991. In the Senate, it has been in progress since 2022, without consensus for voting. The text allows the installation of casinos in tourist hubs or in integrated leisure complexes, such as high-standard hotels, restaurants, bars, and places for meetings and cultural events. So far, 38 amendments to the matter have been presented.
Senator Irajá (PSD-TO) presented a new report on the 12th, accepting only drafting amendments, which do not alter the merits of the project, which could lead, if approved in the CCJ, directly to the Senate Plenary. But given the disagreements on the matter, the president of the Commission, Davi Alcolumbre (União-AP), decided to postpone the discussion and analysis to this Wednesday (19).
According to the proposal, the installation of casinos in tourist hubs or in integrated leisure complexes, that is, high-standard hotels with at least 100 rooms, as well as restaurants, bars, and places for meetings and cultural events, will be authorized.
There will be a limit of one casino in each state and in the Federal District, with the exception of São Paulo, which may have up to three casinos, and Minas Gerais, Rio de Janeiro, Amazonas, and Pará, which may have up to two each, due to the size of the population or territory.
Casinos can also be installed on maritime vessels (up to ten, throughout the country) and on riverboats with at least 50 rooms, within the following limits: one casino on each river with a length between 1,500 and 2,500 kilometers; two on each river with a length between 2,500 and 3,500 kilometers; and three on each river with a length above 3,500 kilometers. Riverboats with casinos may not be anchored in the same location for more than 30 days in a row.
The proposition also establishes rules for the game of bingo in card and electronic modalities, and allows in each state the accreditation of a legal entity for every 700,000 inhabitants for the exploration of the animal game.
In this case, the authorizations will be valid for 25 years, renewable for an equal period. Horse races may be explored by turf entities (linked to turf) accredited in the Ministry of Agriculture, which may also explore, at the same time, bingo and video bingo games.
Source: GMB / Senate Agency
