Brazilian municipalities push local lottery laws amid warnings of irregularities

A wave of municipal legislation has swept across Brazil as 77 city governments move to create their own lotteries and betting platforms, despite warnings from the Federal Government that such initiatives could be irregular.

Although most projects remain in early stages, 17 cities are already finalizing public tenders or licensing processes. 

Only one, Bodó in Rio Grande do Norte, has an active lottery in operation.

Bodó’s model allows companies to operate online gaming through municipal registration, monthly reporting and a 2% revenue contribution to social projects. 

However, none of the 37 companies in it are recognized by Brazil’s Secretary of Prizes and Betting (SPA) at the Ministry of Finance. The Ministry has since issued a formal warning to the city, stating that local licensing violates federal law.

The Ministry states that allowing local governments to issue their own betting licences would undermine national regulatory oversight and consumer protection.

Legal scholars, however, note that the national Supreme Federal Court granted states the right to run lotteries, creating a legal grey area for municipalities. 

“Since there is no express prohibition, they are authorized to create their own municipal lotteries. Since the law says nothing specifically about Brazilian cities and so far the Supreme Court has not ordered its suspension, municipalities can legislate and operate this type of service,” said Telma Rocha, a constitutional law professor at Mackenzie University.

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Experts warn that the proliferation of local lotteries could pose significant challenges. Beyond creating confusion for players, it would also complicate oversight. 

If each municipality regulates its own lottery, the Federal Government would have to monitor thousands of separate systems, drastically increasing regulatory costs.

In Bodó, a town of just over 2,300 residents, the number of authorised betting firms nearly equals one for every 64 inhabitants, a striking statistic that has raised eyebrows in Brasília.

Carlos Mendez

Writer

Odds tell a story long before the result does. When bettors learn to read that story properly, betting becomes a matter of discipline and value rather than emotion or guesswork.

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