BRAZILIAN REGULATION
The Constitution specifies which public services and utilities each federative entity may provide. The Union holds a monopoly on those deemed relevant to national interests, while States are responsible for services aligned with their own interests, and in some cases, share responsibilities with the Union (such as roads, land transportation, and lotteries). According to the Constitution, Municipalities are limited to providing services of “local interest,” generally relating to urban matters such as waste collection, traffic management, and sewage. This context is important for understanding discussions regarding lotteries, as Brazilian law classifies lotteries as a type of public service. Therefore, determining which federative entities have the authority to provide and regulate lotteries requires reference to the constitutional framework concerning powers to legislate and deliver public services and utilities. Quick note – lotteries in Brazil have a wide reach Initially, it is pertinent to clarify that Brazilian legislation adopts a broad interpretation of the term “lottery.” This encompasses not only traditional lottery formats but also fixed-quota bets, which include sports betting and online gaming. Law no. 13,756/2018 classifies “fixed-quota bets” as a form of lottery, and the subsequent Law no. 14,790/2023 further extends this definition to incorporate online games as a category of fixed-quota bets. Therefore, references to “lottery” in legislation generally encompass fixed-quota bets, except when expressly excluded. A little bit of history – how we got here Back in the middle of the last century, some laws emerged concerning the regulation of lottery services in Brazil. The first, Decreto-Lei no. 6.259/1944, authorized the Union and the States to provide lottery services. Later, Decreto-Lei no. 204/1967 denied the right of States to provide lottery services, by giving exclusivity to the Union. Since then, the Union has been the sole provider of lottery in Brazil – with some exceptions provided by the same Decreto-Lei no. 204/1997.
However, in 2020, the Supreme Court (“STF”) ruled that such a monopoly did not align with the Brazilian Constitution, since it does not provide any exclusivity to the Union. Indeed, judging by the lawsuits filed by Rio de Janeiro State and the Brazilian Association of States Lotteries, STF deemed that the Constitution did not place any restriction on the States providing lotteries. STF concluded that the Union has the exclusive powers to legislate on lotteries, as provided by the Constitution. However, these powers do not imply the Union should have a monopoly on the provision of lotteries. Hence, States can provide such services, provided that they respect the federal legislation, including by not offering any lottery type not referred to in such legislation. The recent Supreme Federal Court judgment reopened the market for States to provide lottery services, prompting several Brazilian States to begin granting authorizations and concessions to lottery operators. In 2018, Law No. 13,756 legalized sports betting in Brazil, allowing the Ministry of Finance a two-year period, extendable by an additional two years, to issue regulations. However, comprehensive regulation was implemented later, with several rules enacted in 2024, which left certain issues unresolved and continued to affect the gambling market. Subsequently, in 2023, Law No. 14,790 legalized online gaming and introduced significant amendments to previous legislation, establishing the foundation for the current regulatory frameworks. As a result of these developments, a regulated market for sports betting and online gaming commenced on January 1, 2025.
In short, Brazilian law and Supreme Court precedent state:
• Lottery, sports betting, and online gaming are legal public services. • Law no. 14,790/2023 allows federal and state governments to authorize or grant concessions to private operators. • The federal government regulates gambling, while States may run lotteries within their own borders.
IMGL MAGAZINE | SEPTEMBER 2025
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