The recent debate in the Supreme Federal Court regarding the constitutionality of the ban on gambling has reignited a discussion that needs to be addressed with technical care.
In the judgment of RE 966.177, General Repercussion Theme 924, the STF (Supreme Federal Court) is analyzing whether article 50 of the Law of Criminal Offenses, from 1941, was received by the Federal Constitution of 1988.
During the trial, the discussion arose regarding the need to also consider, in this context, the fixed-odds betting market — the so-called bets.
The concern is understandable. The rapid growth of betting in Brazil has raised important issues related to responsible gambling, advertising, debt, child protection, sporting integrity, and money laundering prevention.
But the connection between bets and gambling requires a prior and legally fundamental question:
What exactly is the legal nature of fixed-odds betting under the Brazilian legal system?
The answer was given by the legislator himself.
Fixed-odds betting is a type of lottery.
Article 29 of Law No. 13.756/2018, later amended by Law No. 14.790/2023, expressly created fixed-odds betting as a lottery modality, in the form of a public service.
Therefore, this is not a classification created by the betting industry.
It was a legislative decision by the National Congress.
Law No. 14.790/2023 reinforced this definition by regulating precisely the "lottery modality called fixed-odds betting".
Engaging in this activity requires federal authorization and is subject to an extensive regulatory framework.
Authorized operators must meet corporate, financial, and technical requirements; identify their clients; implement policies to prevent money laundering and the financing of terrorism; observe advertising and responsible gambling rules; protect minors and vulnerable individuals; comply with tax obligations; and submit to state oversight.
This legal reality cannot be disregarded.
The Brazilian Supreme Court itself has already recognized lotteries as a public service.
The Brazilian Supreme Court has also addressed the legal nature of lotteries.
In judging ADPFs 492 and 493 and ADI 4.986, the Court recognized that lottery operations have the nature of a public service.
The Supreme Federal Court (STF) also ruled that, although the Union has the power to legislate on consortium and lottery systems, the operation of lotteries does not constitute a material monopoly of the Union, and may also be exercised by the States within the limits established by federal legislation.
We therefore have a fairly clear legal sequence:
The Constitution grants legislative power to the Union;
⇒ The Supreme Federal Court recognizes the lottery as a public service;
⇒ The National Congress creates a new type of lottery;
⇒ and the Executive Branch regulates, authorizes, and oversees its operation.
In this context, it is difficult to treat fixed-odds betting simply as if it were a clandestine activity within the same legal environment that the Law of Criminal Offenses sought to combat in 1941.
And what about the Mega-Sena lottery?
The discussion becomes even more interesting when we compare the economic characteristics of the products.
In Mega-Sena, the consumer pays to participate in an event with an uncertain outcome.
There's a bet.
There is a risk to assets.
There is an expectation of a prize.
Luck plays a major role.
In fixed-odds sports betting, there is also an outlay, risk, and reward, although the outcome is related to a sporting event about which the bettor can use information, statistics, lineups, historical performance, and other data.
This does not mean that one modality is equivalent to the other.
This simply means that if the presence of risk, reward, and uncertainty is sufficient to constitutionally classify an activity as incompatible with the legal system, it will be necessary to explain why the same reasoning does not apply to other lottery modalities.
Legal consistency requires objective criteria.
Payout also deserves to be included in this discussion.
There is also an economic aspect rarely mentioned in this debate: how much of the revenue returns to the players in the form of prize money.
According to the official rules of Mega-Sena, 43,79% of the revenue corresponds to the gross prize.
In other words, for every R$100 raised, R$43,79 goes towards the prize money.
The remaining funds have different destinations stipulated by law, including social and governmental transfers, operating expenses, and other categories.
It is important to recognize the relevance of these public allocations.
But from the gambler's economic perspective, the fact remains: less than half of the revenue is returned to all participants as prizes.
In fixed-odds sports betting, the dynamics are different.
Operators incorporate their margin into the odds offered. In highly competitive sports markets, it is common to find single-digit percentage margins, which can represent significantly higher aggregate theoretical returns than those observed in traditional numerical lotteries.
A theoretical margin of 5%, for example, would correspond to approximately 95% aggregate return. A margin of 10%, to about 90%.
The comparison should be made with caution because they are structurally different products.
Number lotteries operate with their own prize distribution and probabilities, while sports betting operates with variable odds and margins.
Nevertheless, the difference in magnitude deserves consideration when discussing economic consumer protection.
If the argument is that a particular modality causes significant asset losses, it is also legitimate to analyze how much each product structurally retains from the revenue.
A higher payout, however, does not eliminate risks.
It would be wrong to conclude that a sports bet is necessarily less risky simply because its theoretical payout may be higher.
Betting platforms have specific characteristics that warrant regulatory attention.
These are digital products, available virtually full-time, with high execution speed and the possibility of immediate response.
A sum returned to the bettor can be quickly reinvested in a new bet, increasing financial exposure over time.
This phenomenon demonstrates precisely why the appropriate response is **specific and risk-proportional regulation**.
Speed, frequency, limits, advertising, behavioral monitoring, self-exclusion mechanisms, and protection of vulnerable players can — and should — be addressed through regulation.
But that's different from concluding that the very existence of the activity is incompatible with the Constitution.
The central point should not be legal market versus gambling, but legal market versus illegal market.
There is another distinction that needs to gain prominence in the Brazilian public debate.
Authorized operators and illegal operators are not the same thing.
The company, authorized by the Federal Government, is subject to a growing set of regulatory obligations.
You need to know and identify your customers.
You need to monitor transactions.
It needs to comply with anti-money laundering regulations.
It is subject to consumer protection regulations.
We need to implement responsible gaming tools.
It is subject to advertising restrictions.
It must protect children and adolescents.
Collect taxes.
You may face administrative penalties and, in serious situations, lose your license.
The illegal operator, by definition, tries to remain outside of that system.
And that is precisely why any discussion about restricting or eventually prohibiting regulated betting needs to address a fundamental practical consequence: what will happen to the existing demand?
Legal illegality does not automatically eliminate consumer behavior.
Banning doesn't necessarily mean ending betting.
The current betting market is predominantly digital.
A platform can be based outside of Brazil, use international payment structures, and still try to attract Brazilian bettors even without any national authorization.
If the regulated market were eliminated, it is unlikely that all demand would disappear instantly.
Some consumers might stop betting.
Another portion could migrate to clandestine operators.
In this scenario, a measure designed to increase social protection could produce precisely the opposite effect.
Consumers would continue to gamble, but outside of an environment where the state can monitor the company.
Without the same tools for responsible gaming.
Without the same mechanisms of self-exclusion.
Without the same payment guarantees.
Without the same capacity for complaint and accountability.
And without the same level of protection provided by the Brazilian regulatory system.
The illegal market also does not collect the same taxes.
There is also an obvious tax consequence.
The regulated market generates tax revenue and other legally defined transfers.
The authorized operators paid significant sums to obtain their permits and became part of a formal structure of taxation, oversight, and public allocation of resources.
Meanwhile, the illegal market can continue to move money from Brazilian consumers without generating the same revenue for the country.
The gambler continues to pay.
The operator continues to generate revenue.
But the Brazilian state loses part of its capacity to tax and oversee this activity.
This creates a regulatory paradox.
The higher the costs imposed exclusively on the legal market — without a proportional fight against the illegal market — the greater the economic incentive may be for clandestine operators to continue seeking Brazilian consumers.
Money laundering: regulation increases traceability.
The issue of preventing money laundering makes this distinction even more important.
Authorized companies are subject to rules regarding customer identification, transaction registration, monitoring, and reporting of suspicious situations, in accordance with applicable laws and regulations.
This does not eliminate the risk of misuse of the sector.
No economic activity is immune to money laundering attempts.
But regulation creates instruments to detect them.
In the black market, these tools are significantly more limited.
Illegal operators may use international structures, financial intermediaries, digital assets, and entities located in jurisdictions that make it difficult for Brazilian authorities to monitor them.
Therefore, the greater the participation of the illegal market, the less capable the State tends to be of fully tracking the financial flows associated with gambling.
The logical conclusion should not be to weaken the regulated market.
The opposite should be done: increase the level of compliance in the authorized market and intensify the fight against illegal operators.
Regulation does not mean encouraging gambling.
There is a false opposition that needs to be overcome.
Defending the legal stability of the regulated market does not mean defending the unrestricted expansion of betting.
The sector needs to accept strong regulation.
Advertising can and should have limits.
Mechanisms for responsible gaming need to evolve.
Self-exclusion tools must function effectively.
Monitoring risky behavior can be improved.
Certain types of bets that are particularly susceptible to sports manipulation may be restricted.
The protection of minors must be absolute.
And operators who violate the rules need to be punished.
But regulatory rigor needs to be accompanied by something equally important: a clear distinction between those who have submitted to the system and those who deliberately continue to operate outside of it.
Otherwise, a perverse incentive is created.
A company that pays its taxes, invests in compliance, implements protection mechanisms, and submits to state oversight begins to compete with those that ignore all these obligations.
The challenge is to increase the flow of products into the legal market.
Regulated betting markets in various jurisdictions operate on a particularly important concept: channeling.
The goal is not simply to measure how much is being wagered.
It involves verifying what percentage of the activity occurs within the authorized and regulated market.
The greater the channeling of resources, the greater the State's ability to identify operators, monitor transactions, tax revenues, protect consumers, and implement responsible gambling policies.
The smaller the pipeline, the more space is occupied by illegal operators.
Therefore, the success of a regulatory policy should not be measured solely by the intensity of the restrictions imposed on the legal market.
It should also be measured by its ability to attract consumers into the regulated environment.
An overly restrictive regulation that is economically unviable or unable to compete with illegal supply can have the exact opposite effect to that intended.
The Supreme Federal Court (STF) needs to consider the coherence of the system.
The Supreme Federal Court clearly has the authority to examine the constitutionality of the choices made by the National Congress.
But this analysis needs to consider the legal system as a whole.
Brazil has decided to create a new type of lottery.
Then he decided to regulate it.
Authorized companies.
He charged for the authorizations.
It established rules for compliance, taxation, and consumer protection.
It created oversight mechanisms.
And it began to fight against unauthorized operators.
If the constitutional debate now seeks to treat all fixed-odds betting simply as gambling incompatible with the legal order, it will be necessary to answer some difficult questions.
Why wouldn't this logic apply to other lotteries?
What is the legal criterion that distinguishes a state-run bet from an authorized private bet?
If the concern is the player's financial loss, how relevant is the payout for each game type?
If the concern is consumer protection, will the consumer really be better protected in the illegal market?
If the concern is money laundering, will we have greater or lesser financial traceability without regulated operators?
And finally: would a potential ban effectively reduce gambling, or would it merely reduce the state's ability to control it?
Legal certainty is also a matter of public policy.
The debate about betting in Brazil needs to move beyond the simplistic dichotomy of being "for" or "against" betting.
The issue is more complex.
The game presents risks.
These risks need to be addressed.
But the illegal market also presents risks — possibly even greater ones precisely because it evades the instruments designed to control the former.
The challenge for Brazil should be to improve regulation, increase consumer protection, combat abuses, raise responsible gambling standards, and at the same time expand access to the authorized market.
The answer cannot ignore the fact that existing economic demand tends to seek supply.
When the State provides a legal environment, it can establish rules regarding that relationship.
When the entire market is pushed underground, much of that capacity is lost.
That's why the most important question might not be:
Is betting a game of chance?
The correct question might be something else:
"Which model offers the Brazilian State the greatest capacity to protect bettors, collect taxes, prevent money laundering, and oversee an activity for which demand already exists?"
If the answer is a regulated market, the way forward is not to dismantle it.
It's about perfecting it.
And to focus regulatory efforts on what should be the common adversary of the state, consumers, and authorized businesses: the illegal market.
(*) Angelo Alberoni is a partner and COO at A2FBR, leading strategic and operational initiatives, contributing to the company's sustainable growth. With solid experience in strategic management, developed in previous roles such as Director at IBJR and Country Manager at Novibet, Betsson, and Betcris, my work focuses on creating innovative campaigns and strengthening brands in the market.
