Brazil’s Supreme Court to hear constitutional challenge to gambling ban

Brazil’s Supreme Federal Court (STF) is set to examine whether the country’s long-standing criminal prohibition on games of chance is compatible with the 1988 Constitution, in a closely watched case that could reshape the legal foundations of land-based gambling.

The Court will hear Extraordinary Appeal (RE) 966177 on 5 August during its first plenary session following the judiciary’s July recess. The case, which has been granted general repercussion (Theme 924), asks whether Article 50 of the Law on Criminal Misdemeanours (Decree-Law 3.688/1941), which criminalises the operation of games of chance, violates the constitutional principle of free enterprise.

Because the appeal has general repercussion status, the Supreme Court’s ruling will establish a binding precedent for lower courts across Brazil on the constitutional issue.

The appeal stems from a decision by a criminal appeals panel in Rio Grande do Sul, which concluded that Article 50 was incompatible with the constitutional order established by the 1988 Constitution.

The Rio Grande do Sul Public Prosecutor’s Office subsequently appealed to the STF, bringing the issue before the country’s highest court.

The justices are not being asked to decide whether casinos should be legalised. Instead, they will determine whether the criminal prohibition on games of chance remains constitutionally valid in light of principles such as free enterprise, legality and proportionality.

A ruling that Article 50 was not received by the 1988 Constitution would remove the criminal basis for prosecuting operators under that provision. However, it would not automatically create a regulated casino market, as any licensing framework would still require legislation establishing rules for authorisation, taxation and regulatory oversight.

The hearing comes as lawmakers continue to debate Bill 2.234/2022, which would legalise and regulate land-based casinos, bingo halls, jogo do bicho and horse race betting.

Speaking to Rádio Senado in June, the bill’s rapporteur, Senator Irajá Abreu, argued that regulation would bring significant economic benefits. “I am absolutely convinced that we have the necessary support in the Federal Senate, because this is a strategic activity for our economy and will generate revenue for the Brazilian state,” he said. “We are talking about an activity that will boost a major industry that has remained dormant in Brazil, which is tourism.”

He added that countries which had adopted regulated gambling markets had seen tourism increase following legalisation.