Last Friday (22), the Ministry of Finance sent a notification to Loterj (Rio de Janeiro State Lottery) to stop the accreditation of online sports betting houses, the “bets”, in the current format.
In Lottopar’s understanding, pointed out in the action, Loterj, by rectifying its notice for the accreditation of companies to operate sports betting, ended up allowing the activities of bets to go beyond the territory of Rio de Janeiro, which would be contrary to a decision by the Supreme Court. Federal Court (STF) regarding the limits on the exploitation of lotteries by states.
The notification sent by the Ministry of Finance follows the same line. The Ministry maintains that Loterj is accrediting the bets without establishing a barrier for companies to operate only in the State of Rio de Janeiro, which, in Finance’s view, would be prohibited by Law No. 14,790, of 2023.
“This Loterj controversy is just the tip of an iceberg that has the potential to generate serious risks to the opening of the betting market in Brazil,” warns the founding partner of Jantalia Advogados and specialist in Gaming Law, Fabiano Jantalia. For him, the regulation of betting and state lotteries, in general, urgently needs a “shock of order, a brake on tidying up.”
“Although we already have a modern and consistent federal law, we are plunged into legal limbo due to the lack of expected regulation. This is what is leading to various confusions and distortions in the application of the law by some state lotteries,” argues Jantalia.
Controversy
In 1944, Decree-Law No. 6,259, which regulated the operation of lotteries in Brazil, allowed states to operate indirectly through concessions, establishing, however, that state lotteries were “restricted to the limits of the respective State”. The states, given legislative authorization, began to structure and operate their own lotteries exclusively within their territories.
In 1967, the creation of new state lotteries was prohibited by Decree-Law No. 204, which established the Union’s monopoly on the exploitation of lotteries, with only state lotteries established until February 27, 1967 being maintained.
This scenario only changed with the 1988 Constitution, which, in art. 22, item XX, established the Union’s exclusive competence to legislate on consortium and draw systems, which raised a question about the constitutionality of prohibiting the exploitation of lotteries by states.
Faced with doubt, the matter was taken to the Federal Supreme Court (STF) by the state lotteries themselves. In 2020, the Court decided that, observing the principles of territoriality, autonomy of the states and the stability of the federative pact, the legislative competence of the Union cannot remove the material competence of the states to explore lottery activities.
In other words, the Court recognized the competence of states to explore, within the limits of their territories, state lotteries, in an environment of coexistence with federal lotteries, which are national in scope.
At the end of 2023, Law No. 14,790 was sanctioned, responsible for giving legal treatment to fixed-odd lotteries that had been created in 2018 by Law No. 13,756, which had already given the Ministry of Finance the authority to regulate betting activity. in Brazil. The 4-year deadline set by law for regulation, however, was not met.
In February 2024, the Ministry of Finance structured the Prizes and Betting Secretariat, which was given the authority to regulate the sports betting market – dealing with sensitive topics, such as preventing money laundering, responsible gambling, advertising and marketing – and authorizing the operation of betting in Brazil. Regulation, however, is still in its infancy, with only two ordinances having been issued, which creates a regulatory vacuum.
Juridical insecurity
While the Union does not publish all the necessary regulatory standards and does not open the authorization procedure, states and even municipalities have sought to anticipate the Union, hoping to attract operators with lower concession and taxation values.
“The problem is that these accreditation notices and even the inspection of state lotteries have been based on mistaken readings of both the STF’s decisions on the subject and the provisions of the federal betting law,” says Jantalia.
The lawyer also maintains that this has generated increasing legal uncertainty for the sector. “If this is not promptly and properly resolved, we run the serious risk of generating a lottery war and alienating operators, damaging all the efforts made by the Executive Branch and the National Congress to enable the opening of this market,” says Jantalia.
Source: GMB
