BRAZILIAN REGULATION
operations. Municipal authorities also face various challenges in running these lotteries. The Supreme Federal Court (STF) is set to determine whether Municipalities possess the legal authority to operate lotteries. The political party Solidariedade has submitted a claim to the Supreme Court 2 , requesting that municipal laws authorizing lotteries be declared unlawful. Rapporteur Justice Kassio Nunes did not grant the injunction. Instead, he notified fifteen Municipalities to present their reasons before following with the judgement. There are two principal arguments regarding the Municipalities’ intention to operate lotteries. The first is that the Supreme Court has not explicitly extended to Municipalities the right it granted to States when addressing the Federal Government’s lottery monopoly. In the cases reviewed by the STF, only State authority was considered, without determining whether Municipalities may also provide these services. Furthermore, current federal legislation does not grant this authority to Municipalities. Another argument challenging the authority of Municipalities is based on Section 30, item V of the Brazilian Constitution, which grants Municipalities the power to operate – directly or through concession and authorization – services of local interest. This provision indicates that Municipalities have limited authority regarding public services, being responsible primarily for those related to urban affairs. It is debatable whether lottery services are of ‘local interest’ to cities, despite some Municipalities claiming this based on revenue. The Constitution’s notion of local interest concerns urban services that benefit residents, not financial gains. Defining local interest solely by potential revenue would mean any fee-generating service qualifies, which oversimplifies the issue. Allowing Municipalities to run lotteries raises concerns about the effectiveness of a multi-authority system, as different federative entities could enforce varying regulations. This could distort competition, with some Municipalities lowering
authorization standards to attract companies, potentially granting licenses to unaccountable operators and harming both competitors and other federative entities. Despite all the arguments in place, the final solution will come when the STF rules on the ongoing case. Working together may be the key Regardless of the decision on the Municipalities, the federative entities are required to address disputes over lotteries. Based on current STF rulings and legislation, collaboration appears to be an appropriate approach for resolving these issues. The Secretariat of Prizes and Betting ( Secretaria de Prêmios e Apostas , the federal regulator) recently announced an initiative called Sistema Nacional de Apostas (SINAPO), which is intended to establish a minimum level of coordinated regulation involving both the Union and the States. SINAPO is currently being developed, and SPA plans to engage the States by providing three specific benefits: • Access to the national list of authorized companies, adding their authorized companies to general consulting • Access to the national list of banned bettors (currently being developed by the Federal Government) • Use of the domain ‘.bet.br’, which may be adjusted to include each State acronomy, so bettors can easily identify the regular State’s operators In exchange, States are required to comply with general standard regulations, which primarily address the requirements for authorizing companies and control over the geographic location of bettors. It remains to be seen whether SINAPO will be effective, however, it does represent an initial indication of a settlement between the Union and the States. In the absence of a negotiated agreement among the federative entities – including the Municipalities – issues will continue to be resolved by the Supreme Court, increasing uncertainty and associated costs for both the federative entities and
2 ADPF no. 1212.
IMGL MAGAZINE | SEPTEMBER 2025
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