STF Orders Immediate Suspension of All Municipal Lotteries in Brazil

According to the justice, fixed-odds betting (bets) involves high risk and requires strict regulation. He noted that the STF itself has previously identified “insufficient protection” and a “regulatory deficit” in the sector, which would require a national regulatory framework — not a municipal one.

“In my view, the scenario seems incompatible with the spread of lotteries within municipal entities. The rules challenged in this case reveal the establishment of betting and lottery systems that extract guidelines and frameworks within the Union’s exclusive legislative competence, as well as the authorization to transfer the operation of fixed-odds betting to legal entities not authorized by the Secretariat of Prizes and Betting of the Ministry of Finance (SPA),” he wrote.

The suspension, valid until the decision on the merits, seeks to prevent the advancement of initiatives that, according to Nunes Marques, distort the federal structure.

He highlighted that legislation from municipalities such as São Vicente (SP), Guarulhos (SP), São Paulo (SP), Belo Horizonte (MG) and Campinas (SP) appears to “innovate the federal regulation on the distribution of the collected amounts, which results in a true federative imbalance.”

“Not only due to the contradiction with the structural projection of the distribution of powers among government entities, but also due to the promotion of unequal treatment among subjects who should be subjected to identical regulation,” he stated. “Furthermore, the discrepancy between the amounts required by municipalities from companies during the bidding process and those required by the Union, the States, and the Federal District tends to compromise competitiveness among lotteries, as the population tends to choose the lower-cost tickets.”

Justifying the urgency, the justice stated that the case involves a risk of deepening legal disputes and ongoing irregular practices, describing the situation as “likely to cause not only the deepening of the alleged unconstitutional scenario, but also the worsening of legal uncertainty,” considering the spread of municipal initiatives, the multiplicity of challenges, and the possibility of weakening oversight and monitoring.

Nunes Marques also imposed daily fines for noncompliance:

• R$ 500,000 per day for municipalities and companies that maintain the service;
• Personal fines of R$ 50,000 per day for mayors and presidents of operators who disobey the ruling.

The decision reinforces the STF’s position that betting regulation must remain under the exclusive jurisdiction of the federal government.