On December 4th, 2025, the Federal Supreme Court of Brazil took decisive action by halting the operations of all municipal lotteries across the nation. This move came in response to a filing by the Solidarity Party, which argued that these local lotteries were breaching federal betting laws. Minister Nunes Marques issued the ruling, placing an immediate suspension on any municipal laws and decrees that established, authorized, or regulated lottery and sports betting activities.
The case was brought forth under a Claim of Non-Compliance with a Fundamental Precept (ADPF), highlighting a “truly chaotic scenario” where municipal operators were bypassing federal regulations. Minister Marques emphasized that municipalities do not have the authority to legislate on betting matters, which are under exclusive federal jurisdiction. He noted that this overreach by municipalities had led to a “drastic weakening” of federal oversight regarding gambling activities in Brazil. The decision includes a hefty daily fine of BRL500,000 ($94,065) for municipalities and companies continuing to provide betting services, with an additional penalty of BRL50,000 for mayors and company presidents who do not comply.
The Attorney General’s Office backed the ADPF, stressing that municipal lotteries pose a threat to consumer protection and undermine the federal regulatory framework. Marques’ injunction is set to be reviewed in an extraordinary plenary session, which will decide whether to uphold the suspension of municipal lotteries. The injunction affects all related municipal actions, from normative acts to contracts and operations, effectively stopping any lottery-related activities at the municipal level.
While municipal lotteries face suspension, state lotteries remain untouched due to the protection offered by Article 35-A of Law No 14,790/2023. This law states that only states and the federal district have the authority to conduct lottery operations, excluding municipalities from this right.
A recent development that drew national attention was the situation in Bodó, a small municipality with just over 2,000 residents. Bodó had begun issuing lottery licenses to operators for a fee of BRL5,000, a stark contrast to the BRL30 million required for a federal license. This discrepancy prompted scrutiny and action from the Secretariat of Prizes and Bets (SPA), the federal regulator for betting. Subsequently, Bodó’s mayor suspended municipal lottery activities following a warning from SPA.
Minister Marques pointed out that the interests of municipalities should focus on immediate civic needs like public transport and urban planning, rather than gambling. Despite arguments from municipal governments that local lotteries could boost tax revenues to fund essential services, the preliminary suspension suggests these arguments may not hold if the decision becomes permanent.
The ruling is presented as a crucial step to prevent what could be a deep constitutional violation and increasing legal uncertainty. The dissemination of inconsistent practices across different municipalities, coupled with the challenges of managing and supervising these activities, were points of concern for the Supreme Court. Marques underscored the urgency of addressing these issues to prevent further complications.
In light of the suspension, the SPA, along with the National Association of Games and Lotteries and the National Telecommunications Agency, will be informed to take necessary actions. The decision may spark a broader debate on the role of municipal autonomy versus federal control, particularly in sectors like gambling, where regulation is crucial to maintain order and protect consumers.
Despite the Supreme Court’s ruling, some argue that a more localized approach to lotteries could indeed support community projects and provide much-needed funding for municipal services. However, the counterpoint remains that without strict federal oversight, the risk of inconsistent practices and the potential for regulatory evasion could outweigh the benefits. The debate continues as stakeholders await the outcome of the upcoming plenary session, which will ultimately decide the future of municipal lotteries in Brazil.
As the situation unfolds, it may serve as a precedent for other regions grappling with similar issues of federal versus local regulatory powers, reflecting broader tensions within the governance of emerging industries like gambling. The outcome of this legal battle could redefine the landscape for lottery and betting operations within Brazil, emphasizing the delicate balance between encouraging economic opportunities and enforcing strict regulatory standards.
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