Brazilian Supreme Court invalidates restrictions on state lottery operations

In a ruling concluded in September 2025, the Brazilian Supreme Court (“STF”) determined that the same economic group can operate state lotteries in more than one state of the federation and that advertising for this type of service can be carried out nationwide. The STF found specific provisions of Law No. 14,790/2023 (“Fixed-Odds Betting Law”) to be unconstitutional.

The decision was issued unanimously in Direct Action for Unconstitutionality (“ADI”) No. 7,640, filed by the governors of São Paulo, Minas Gerais, Acre, Mato Grosso do Sul, Rio de Janeiro, and the Federal District. The claimants argued, among other points, that the restrictions provided for in the Fixed-Odds Betting Law were contrary to the principles of federalism, free enterprise, and free competition.

Firstly, the STF established that Article 35-A, paragraph 2, of the Fixed-Odds Betting Law – which limited the activities of the same economic group or entity to just one state or the Federal District – was unconstitutional. The decision ruled that such a restriction was incompatible with the constitutional economic order, recognizing the revenue-generating potential of state lotteries and emphasizing that part of the funds from this service are allocated to social programs and public policies that promote sports.

Secondly, the STF also established that the expression “advertising” in Article 35-A, paragraph 4, of the Fixed-Odds Betting Law was unconstitutional, as it determined that advertising for state lotteries was restricted to people physically located within the boundaries of the corresponding state or the Federal District. The STF considered it disproportionate, for example, that a state lottery should be prevented from sponsoring an athlete or sports team from another state, from promoting marketing actions related to sporting events, or from sponsoring athletes and tournaments.

It is important to clarify that the decision in ADI No. 7,640 does not address the constitutionality of granting licenses for municipal lotteries – a matter currently under review in Allegation of Disobedience of a Fundamental Precept (“ADPF”) No. 1212, filed by the Solidariedade political party.

Demarest’s Regulatory Law, Dispute Resolution, and Corporate teams are monitoring the topic and remain available to assist clients with all necessary clarifications.