BRAZILIAN REGULATION
companies seeking to operate lotteries in Brazil. It is important to note that three cases are currently pending before the STF, with one case serving solely to reinforce the Court’s prior decision concerning Loterj’s failure to observe territorial limitations. The resolution process appears somewhat more straightforward regarding disputes between the Union and the States, primarily because there are fewer stakeholders involved, and some States have already indicated their willingness to negotiate with the Union. Additionally, two court rulings have affirmed the rights of the States, reinforcing territorial restrictions and thereby affecting negotiation leverage. States may also benefit from federal regulation, as it could reduce their regulatory expenses. By utilizing federal frameworks and enforcement mechanisms, States can streamline rulemaking and enforcement efforts, and better address unregulated operators, rather than allocating significant resources to independently establish and maintain their own systems. Municipalities may negotiate with States for a portion of revenues collected. For many Municipalities, the potential revenue from operating or delegating their own lotteries is limited, given the associated costs, time required to structure authorization processes, and the need to manage and monitor operations. From a cost-benefit perspective, receiving a share of State revenues could yield similar financial results without incurring these efforts and expenses. This scenario is particularly relevant for Municipalities that have not yet established lottery operations and would begin to generate income from the State’s lottery instead. Additionally, if the STF rules against the Municipalities, they will not have the option to operate their own lotteries.
Currently, there is no immediate resolution expected as parties await decisions in ongoing Supreme Court cases. While the disputes between the Union and the States are further along than those involving Municipalities, all parties are waiting for additional rulings before proceeding. Conclusion Ongoing disputes among federative entities persist due to vague legal guidelines and debates over constitutionality. As most issues end up in the Supreme Court, it plays a pivotal role in shaping the framework through which federative entities can address current challenges. However, it is unrealistic to rely on external resolutions for every emerging dispute. Although legal frameworks and regulations can support these efforts, further legislative advancements are unlikely in the near future, given the current political climate surrounding betting. Federative entities must develop mechanisms to both prevent and resolve conflicts. Some initiatives may provide guidance for reaching settlements that address portions of ongoing disputes. Given the range of competing interests, it will be challenging to reach a comprehensive agreement among all parties that resolves every related issue. Nonetheless, indefinite delays are undesirable, as they would result in losses for all stakeholders in the lottery market. While it is understandable that each party will seek to secure their share of a thriving market, it is essential that concessions are made to prevent undermining the potential benefits. It is neither reasonable nor practical to expect unlimited authority for each State or Municipality to operate lotteries.
CAIO DE SOUZA LOUREIRO Partner, TozziniFreire For information contact +55 (11) 5086-5378 cloureiro@tozzinifreire. com.br
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IMGL MAGAZINE | SEPTEMBER 2025
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