Brazil federal court denies request to suspend municipal lotteries

The Supreme Federal Court (STF) of Brazil, led by Minister Nunes Marques, has recently opted not to place a preliminary injunction suspending municipal lotteries. This decision unfolds amid an ongoing legal conflict between the federal government and regional lottery operators, highlighting the complexities of gambling regulations in Brazil.

Released on March 25, Marques’ ruling addresses a Claim of Non-Compliance with a Fundamental Precept (ADPF) presented by Brazil’s Solidarity Party. The ADPF sought to halt municipal lottery operations pending a Supreme Court determination regarding their constitutional validity. This case parallels the ongoing dispute involving Lotterj, the Rio de Janeiro State Lottery, and the federal government.

The Solidarity Party contends that the proliferation of municipal lotteries has led to a “chaotic scenario,” allowing local jurisdictions to bypass federal betting regulations. As a result, unlicensed operators have begun to flourish, which the Solidarity Party argues threatens the stability of the newly regulated federal betting market and poses risks to player safety.

Despite these claims, Minister Marques has refrained from suspending municipal lotteries at this juncture. Instead, he has requested the Solidarity Party to provide additional evidence supporting its allegations within a 10-day window. Furthermore, he has called upon the Attorney General’s office to contribute insights on this matter before the Court’s final ruling.

“Considering the importance of this issue and its implications for social order and legal certainty, it’s imperative to gather perspectives from the involved authorities,” Marques remarked. His emphasis on obtaining comprehensive viewpoints is intended to inform a final decision that is equitable and thorough.

Anticipating a Final Ruling on Brazil’s Municipal Lotteries

As it stands, municipal lottery operations will continue uninterrupted until the STF issues a conclusive verdict regarding their constitutionality. Brazil comprises 26 states and over 5,500 municipalities, several of which are keenly focused on legislating local lottery frameworks to generate regional revenue.

A particularly interesting case is that of Bodó, a small municipality with a population of just over 2,000, which has issued numerous licenses to operators. The cost for a municipal license in Bodó is notably modest at BRL 5,000 (approximately £670.29 / €796.81 / $867.70), especially when compared to the staggering BRL 30 million fee for a federal online betting license.

Despite federal government threats to cease their licensing activities, Bodó has remained resolute, allowing its licensees to operate throughout Brazil. This defiance underscores the tensions between municipal and federal regulatory frameworks in the gambling landscape.

An ongoing case concerning the Rio de Janeiro State Lottery (Lotterj) exemplifies the heightened scrutiny faced by regional operators. The federal government and Attorney General have asserted that Lotterj must restrict its licensees from conducting operations outside state lines. In a significant ruling last February, the STF upheld a preliminary injunction prohibiting Lotterj from permitting its licensees to work nationwide, mandating the implementation of geolocation blocking to limit access to players outside the state.

This evolving legal landscape in Brazil illustrates the growing complexities and challenges within its gambling legislation, as various stakeholders, including municipalities and the federal government, navigate a rapidly shifting environment. The eventual outcomes of these cases will undoubtedly shape the future of both municipal and federal gambling operations across the country.