BRAZIL – The Supreme Court ends state Lottery monopoly
Adjudges that lotteries are a public service and can be exploited by each state
Brazil’s Supreme Court (STF) adjudged on Wednesday (30), that the State of the Union has no exclusivity in exploitation or operation of lotteries and unanimously voted that each state, despite not having legislative competence on the matter, can exploit and operate lotteries in any format.
In its ruling the Court upheld Proceedings for Non-compliance with Fundamental Precepts (ADPFs) 492 and 493 to declare that Articles in Decree-Law 204/1967, which deal with the exclusivity of the Union to exploit lotteries, were not approved by the Constitution of 1988, stating further that the Direct Action of Unconstitutionality (ADI) 4986, which debated whether the legislation of the State of Mato Grosso to regulate the exploitation of lottery modalities invaded the private competence of the State to legislate on consortia and sweepstakes systems, was rejected because they were bound by the federal model of lotteries.
Nature of public service
On matter of unanimous understanding of the Supreme Court, the court reader, Minister Gilmar Mendes, stressed that the exploitation of lotteries has a public service nature and that federal legislation cannot impose on any federal authority, any “restriction on the exploitation of a public service beyond that already provided for in the constitutional text (Article 175)”. According to Mendes, the questionable items in the ADPFs do not apply to the subsidiary competence of the states for the provision of public services.
Mendes added: “Since the beginning of legislation on the matter, the coexistence of exploitation has always been accepted both by the Union and by the states until the approval of decree-law 204. Prior to that, the competence of the states to exploit this public service had always been recognized. In my view, it is permissible to conclude that the exclusive competence to legislate on the subject does not prevent the states from operating lotteries,”
