The trial of ADI 7640 resumes in the STF's Virtual Plenary.

The trial in the Virtual Plenary of the Direct Action of Unconstitutionality (ADI) 7640 filed by the governors of São Paulo, Minas Gerais, Piauí, Paraná, Acre, Mato Grosso do Sul, Rio de Janeiro and the Federal District resumed this Friday (4). The ADI questions provisions of the Law on Sports Betting and online games (Law 13.756/2018 as amended by Law 14.790/2023), which regulates the service of exploiting lotteries by federative entities. The trial to ratify the decision of rapporteur Minister Luiz Fux in the Virtual Plenary will continue until next Friday (11).

So far, Justice Alexandre de Moraes has sided with the rapporteur's vote to uphold the injunction, as have Justices Gilmar Mendes and Flávio Dino, but both with reservations.

The challenged provisions limit the possibility of a single economic group or legal entity operating a lottery service to only one state and prevent a lottery from one state from advertising in another.

On October 18, 2024, reporting Justice Luiz Fux voted in the Virtual Plenary for the declaration of unconstitutionality of §2 of Article 35-A of Federal Law No. 13.756/2018 (included by Federal Law No. 14.790/2023) and the expression "advertising," contained in §4 of the same Article 35-A.

On November 8th, the trial to ratify the rapporteur's decision began in the Virtual Plenary, and Minister Alexandre de Moraes sided with the rapporteur. Minister Gilmar Mendes requested a review and suspended the trial, which was scheduled to conclude on October 25th.

Vote of Minister Gilmar Mendes

With the resumption of the trial this Friday (4), Minister Gilmar Mendes presented his vote and agreed with the rapporteur, but with reservations.

"MINISTER GILMAR MENDES: I concur with the eminent Minister Luiz Fux, Rapporteur. However, I believe it is necessary to make a small reservation, solely for the purpose of clarifying a specific point."

The purpose of paragraph 2 of article 35-A of Law 13.756/2018 – to prevent market concentration, preserving free competition – is legitimate and subject to legislative protection. However, as correctly pointed out by the Reporting Justice, the prohibition imposed by the provision does not meet the principle of proportionality, insofar as it is inadequate for achieving its intended purposes.

This does not, however, completely prohibit legislative action. In fact, the legislator can act to protect constitutional values, so as to safeguard, for example, the economic order, providing a healthy competitive environment.

Therefore, I do not subscribe to arguments that, in the end, hinder the legislative action of the National Congress in preventing market concentration, which constitutes a constitutionally relevant value and, therefore, is capable of being adequately shaped through proportional legislation.

With these considerations, I concur with Minister Luiz Fux, the Rapporteur.

Vote of Minister Flávio Dino

Minister Flávio Dino also presented his concurring opinion, agreeing with the rapporteur, but with reservations.

"Therefore, I acknowledge the request and agree with the Rapporteur, with reservations, as I believe it is possible for the legislator to establish limitations, in abstracto, on the material competences of the States and the Federal District regarding the organization of the provision of their respective public services, when prohibitions prove to be adequate, necessary and reasonable for the purpose of promoting the protection of consumers against violations against the national economic order."

In this regard, I consider it necessary to affirm the possibility of preventing or suppressing anti-competitive practices in bidding processes for state lottery services, through the actions of the bodies of the Brazilian Competition Defense System — CADE and SAE (Law No. 12.529/2011, articles 9, 13, 17, and 19), upon request or ex officio, including notifying public bodies and authorities about the risks of possible violations against the economic order under Law No. 12.526/2011 (article 36), without prejudice to the characterization of other offenses provided for by law.

ADI 7640

In the lawsuit filed in May 2024, the governors argue that the regulation, sanctioned in December 2023 and which amended sections of Law 13.756/2018, restricts the same economic group from obtaining concessions to operate lottery services in more than one state. According to them, this restriction reduces the participation of companies in bidding processes and fosters a competitive environment among states where some tend to lose more than others.

Similarly, they consider the change in advertising rules disproportionate. The current rule prohibits advertising for betting services from being broadcast in a state other than the one in which the service is actually provided.

The governors argue that the service provided by lotteries occurs when a person purchases 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 federative entity, the law violates reasonableness.

Furthermore, it is argued that the veto undermines free competition, as it prevents lotteries from exploiting their advertising potential to attract new users.

Check out the full text of the opinion of the reporting judge, Luiz Fux.