Legislation

Brazil – Supreme Court validates law establishing health and tourism lotteries

By James - 18 March 2024

In a unanimous decision, the plenary of the Supreme Federal Court (STF) upheld the federal law authorizing the creation of Health and Tourism Lotteries allocating part of their profits to the National Health Fund (FNS) and the Brazilian Tourism Promotion Agency (Embratur).

The Green Party (PV), the author of the action, wanted Law 14.455/2022 declared unconstitutional as the law does not expressly require a bidding process for the management of lotteries by private companies. Additionally, the party argued that the allocation of profits to the FNS and Embratur was set at very low levels which would constitute “a deviation of purpose” and be disproportionate.

However Justice Alexandre de Moraes, the rapporteur, found that there is no constitutional requirement for a portion of lottery revenue to be allocated for a specific purpose, even if the allocation is socially relevant.

According to Law 14.455/22 the management of the lotteries may be carried out by private companies. The norm also allocates 95% of the revenue from the Health and Tourism Lotteries to cover operating expenses and maintenance of the operating agent, with 3.37% to 5% of the revenue going to the FNS or Embratur, depending on the type of bet.

Regarding the percentages set by the law, the rapporteur noted that the established values are not out of line with other lottery products in Brazil. Justice Alexandre also found that Law 14.455/2022 does not regulate aspects related to the bidding process.

The bill that gave the Federal Government the right to create both a Health and Tourism lottery was approved by lawmakers in September 2022.

The lotteries will be allowed to offer fixed odds sports betting in person and online as well as traditional number games.

The proposal which had been modified by the Senate, had its analysis completed in the Chamber of Deputies and was sent for presidential sanction. Law 14.455 was published in the Official Gazette in September 2022 and President Jair Bolsonaro sanctioned it into law into law the same month. President Bolsonaro vetoed only one of the articles of the bill. Concession rules initially had to be published within 30 days after the publication of the law. However this 30 day limit was vetoed by President Bolsonaro as he argued that the provision was unconstitutional.