Brazil: Governors challenge Sports Betting Law at Supreme Court

The Direct Action of Unconstitutionality (ADI) 7640 is under the report of Justice Luiz Fux and is signed by the governors of São Paulo, Minas Gerais, Acre, Paraná, Mato Grosso do Sul, Rio de Janeiro and the Federal District.

In the lawsuit, the governors claim that the rule, which was sanctioned in December last year and which amended parts of Law 13.756/2018, restricts the same economic group from obtaining a concession to operate lottery services in more than one state. For them, this restriction reduces the participation of companies in tenders and favours an environment of competition between states in which some tend to lose more than others. 

“These consequences should fall mainly on the states with the least economic strength. This is because, if the private operator is awarded the concession in just one state, it is expected that the most capable economic agents will prioritise those states with the highest population demand, as well as those with the highest purchasing power, to the detriment of less attractive states,” the governors argue. 

Likewise, they consider the change in advertising rules to be disproportionate. The current rule prohibits advertising about the betting service from being broadcast in a state other than the one where the service is actually provided. 

The governors claim that the service provided by lotteries occurs when a person buys a ticket, while advertising only seeks to attract a potential user. Therefore, by restricting advertising only to users located within the territorial limits of the federation, the law violates reasonableness.

In addition, it is pointed out that the veto affects free competition, as it prevents lotteries from exploiting their advertising potential to attract new users.