STF moves to strike down “Law of Bets” restrictions

The Supreme Federal Court (STF) has formed a majority to declare unconstitutional two provisions of the so-called “Law of Bets,” sanctioned at the end of 2023. The contested rules prohibited the same economic group from operating lotteries in more than one state and restricted state lottery advertising only to residents within that state. The decision, expected to be finalized this Friday (12), will allow a single company to operate in multiple states and run nationwide advertising campaigns.

The lawsuit was filed by governors of São Paulo, Rio de Janeiro, Minas Gerais, Paraná, Mato Grosso do Sul, Acre, and the Federal District. They argued that the restrictions reduced business participation in concessions, discouraged larger operators, and created an unequal environment where wealthier or more populous states would naturally attract more investments, leaving smaller states behind. Another point raised was the violation of free competition, since limiting advertising prevented lotteries from expanding their user base and increasing revenue.

Justice Luiz Fux, the case’s rapporteur, supported by justices such as Flávio Dino, Gilmar Mendes, and Alexandre de Moraes, argued that the prohibitions had no basis in Article 175 of the Constitution, which regulates concessions and authorizations for public services. According to Fux, there is no reasonable justification for preventing one economic group from operating lotteries in more than one state, nor for restricting advertising strategies decided by each state government. He stressed that the law already prohibits states from offering lottery services to residents of other states, making the additional restrictions unnecessary.

Although they agreed with the rapporteur, some justices noted that Congress still retains the authority to legislate on how states organize their concessions in order to protect economic balance and ensure healthy competition. Even so, the STF’s decision is expected to broaden private-sector participation, increase competitiveness in bidding processes, and strengthen state revenues, while at the same time redefining the limits of federal and state regulation over Brazil’s gaming and lottery sector.