São Paulo appeals to STF to save municipal lottery

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São Paulo appeals to STF to save municipal lottery

The Municipal Chamber filed an appeal against the injunction issued by Minister Nunes Marques that suspended Law 18.172/2024. The São Paulo legislature argues that the measure halts existing contracts and affects the revenue allocated to essential public services.

The battle over regulatory authority of lotteries in Brazil has reached a peak of tension. The Municipal Chamber of São Paulo has formally filed an appeal before the Federal Supreme Court (STF), seeking to overturn the injunction issued by Minister Nunes Marques on December 3. This order halted the enforcement of Municipal Law 18.172/2024, effectively dismantling the nascent lottery system of the largest city in South America.

The conflict is framed within the discussion about the Action of Non-Compliance with a Fundamental Precept (ADPF). While in 2020 the STF ruled in favor of allowing the States to operate lotteries (breaking the Union's monopoly), extending this authority to the Municipalities remains a constitutional gray area that Marques has decided to halt.

São Paulo’s argument: Administrative and social impact

In its defense, the local legislature maintains that the abrupt suspension creates administrative chaos. The law was not a project but an active norm that had already triggered bidding processes and budget projections.

The Chamber argues that the judicial decision exceeds the scope of gaming and strikes the comprehensive municipal management, blocking resources that were already allocated to social programs. Based on legislation that allows the STF to limit the effects of unconstitutionality for "reasons of legal certainty or social interest," São Paulo requests:

  1. Reinstatement of the law’s validity until a definitive ruling by the Plenary.
  2. Modulation of effects: If the suspension is upheld, they ask that already executed administrative acts be preserved and retroactive sanctions avoided to ensure an orderly transition.

The STF’s stance: Federal jurisdiction and hefty fines

Nunes Marques’ injunction is based on a strict interpretation of the Constitution: legislating on lottery and raffle systems is an exclusive competence of the Union. The minister warned that allowing municipal lotteries creates a risk of regulatory fragmentation that is impossible to oversee, especially with the fixed-odds betting modality.

To ensure compliance, the magistrate imposed severe fines:

A domino effect in 55 municipalities

The São Paulo case is the most visible, but the decision affects the entire national ecosystem. According to industry data, 55 municipalities across 17 states had already created their own lotteries and more than 80 had enacted related regulations in the last three years, inspired by the market opening.

Now, the appeal must be evaluated either by Nunes Marques himself or elevated to the STF Plenary in a virtual session. The final ruling will not only decide the fate of São Paulo’s lottery but will establish whether the Brazilian market will have hundreds of local regulators or consolidate under a state and federal model.

Tags: Brasil, Brazil lotteries, Sao Paulo lottery