The Federal Supreme Court (STF) of Brazil has unanimously decided that the Union doesn’t have the exclusivity to operate lottery games in the country. From now on, each Brazilian state will be able to create and operate lottery games, as long as they comply with federal regulations.
“The Constitution doesn’t give the exclusivity to the Union and doesn’t expressly or implicitly ban the operation of state lotteries,” said the Court, which explained that, although only the Union can legislate on gambling and lotteries, it doesn’t mean that state governments cannot “exploit this service.”
Nine ministers participated in the vote: Gilmar Mendes, Alexandre de Moraes, Edson Fachin, Rosa Weber, Dias Toffoli, Cármen Lúcia, Ricardo Lewandowski, Marco Aurélio Mello and Luiz Fux.
The lawsuit, led by the Brazilian Association of State Lotteries (ABLE), gained national relevance after the Attorney General of the State of Rio de Janeiro (PGE-RJ) argued that due to the closure of the Rio de Janeiro State Lottery (Loterj) in 2017, they would lose more than $3.5m per year.
STF’s laws set that the Union has the exclusivity to regulate lotteries, but there is no clause that specifies that it has the right to a monopoly.
Gilmar Mendes said that lotteries work as a source of revenue for the states. “The exploitation of lotteries is, in part, a public service,” he said. Minister Ricardo Lewandowski pointed out that they work to “generate resources at a time when [states] run out of money”.
Alexandre de Moraes commented that he thinks “…it’s serious that some states operate lotteries, thanks to old legal systems, while in others the prohibition is still in place”.
The next step will be for each state to pass laws to build a structure to operate lotteries and create public entities to monitor the activity.
