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The City Council of Tatuí, in the state of São Paulo, Brazil, approved a new municipal law that authorizes the creation of a local lottery. The project, presented by Mayor Professor Miguel (PSD), was voted in with 10 yes votes and six no votes. The bill is a significant step for the municipality to retain part of the gaming revenue that goes to the federal government and use it for public services.
Municipal Regulation and Private Operation
The bill enables the municipality to offer lottery games and betting games permitted under federal law. While the city government can conduct the activities directly, it can also permit private entities to conduct them by granting rights. This follows Brazil’s evolving regulatory environment for gaming, particularly after the 2020 Supreme Federal Court (STF) ruling that states can run their lotteries, provided they observe federal regulations.
The municipal lottery will be regulated, controlled, and supervised by the Mayor’s Office. An essential role will be played by the Secretariat of Government and Institutional Relations, which will have the responsibility of monitoring operations and ensuring compliance. The municipality may also enter into partnerships with public or private institutions in a bid to foster governance and transparency.
Audits and Legal Framework
Periodical audits will be conducted by the city’s internal control department to ascertain legality and transparency in the lottery’s operations. The government desires to maintain strict control to avoid misappropriation of funds and to maintain public trust.
The concession to private operators will be managed through public bidding in the “competition” modality, by Brazil’s Federal Law No. 14.133/2021, Brazil’s new public procurement law. The concession contract will be for 20 years, and the renewal will depend on a previous reevaluation of public interest by the municipality.
Revenue Allocation and Local Development’
One of the most significant goals of the municipal lottery is to reinvest betting and lottery game tax revenues in the local economy. Currently, these revenues either find their way to Brasília or, in the case of unregulated operators, are lost entirely through failure to comply with tax laws.
Under the new legislation, municipal lottery revenues will be used exclusively to finance public health, culture and sports, education, and social welfare initiatives. Revenues will include a 5% municipal tax on the gross income of lottery services, according to municipal tax legislation.
The municipal government has explained that the goal is not to establish betting parlors or increase gambling, but to tax and regulate what already exists. The idea is to make the activity a predictable source of income that can support essential social services.
Implementation Timeline and Political Reception
With approval by the City Council, the executive has 60 days to regulate the law after its official publication. As of the date of this update, the law had not yet been signed by the mayor.
The legislative procedure was normal, and the bill was submitted to review by the city legal department and approval by three standing committees: Constitution, Justice and Writing; Public Works and Administration; and Economy, Finance and Budget.
The proposal met with support and opposition. Ten councilors out of the 16 members voted in favor, representing parties like PSD, Podemos, União Brasil, Solidariedade, Republicanos, PL, and MDB. Six councilors opposed the move, representing political parties like PL, PP, and PT.
Legal and Constitutional Context
While the 2020 STF ruling maintained the right of states to operate lotteries, it did not specifically include municipal lotteries. The Court’s press office has said that the legality of municipal lotteries may be revisited in the future if questioned.
Tatuí government maintains that the new city lottery is in line with constitutional principles as well as all applicable federal and state legislation. In addition, the city pointed out that other cities in São Paulo have already launched comparable projects, suggesting heightened interest in municipal-level gaming activities as a revenue stream for public services.
Tatuí’s move to create a municipal lottery forms part of an overall direction towards decentralization in the regulation of gaming in Brazil. By having a lottery of its own, the city not only wants to generate local revenue but also to ensure that this revenue remains invested in priority sectors that will directly benefit its population. In the long term, the success of the venture will depend on cautious implementation, transparency, and its ability to locate sound private partners through competitive bidding.
Source: iGaming Brasil
