Brazil: Te Challenges


BRAZIL:


LITTLE BIT RANDOM


States are taking advantage of the Supreme Court decision which grants them the right to offer lottery games and sports betting. However, the licensing process has been the focal point of debate touching upon a much broader issue – state versus federal control.


In Brazil, the first lottery on record was held in 1784, in Vila Rica (now Ouro Preto), the capital of Minas Gerais. Te money raised was used to build the City Council and the Public Jail. Over 240 years later while lotteries may not lead to jail time for organisers (of government sanctioned lotteries at least) it is certainly causing plenty of problems in the courts. Te conflict over lotteries reflects much broader issues when it comes to the balance of power between federal and state governments in Brazil. After democracy returned to Brazil the 1988 Constitution granted states and municipalities greater authority making Brazil one of the most decentralised federations in Latin America. Any encroachment on state governance has always been


met with strong resistance. A good recent example of this is the debate over public security. While states are primarily responsible for public safety and control of civil and military police, the federal government has increasingly intervened since the 1990s. Tis shift has raised concerns about the dilution of state autonomy, and led to debate over just how effective this federalist approach has been in tackling crime. While not nearly as serious, the same kind of conflict has arisen over the state control over lotteries. Te background to


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this is that in 1967, the government enacted Decree-Law No. 204, which prohibited the establishment of new state lotteries. While existing lotteries were allowed to continue operating, their activities were restricted and they could not expand their operations beyond the number of tickets and games that were operational when the decree was published. Tis effectively stifled the growth of new lotteries, and meant that any attempts to launch them were illegal. Many state lotteries were shut down, leaving only a few left standing, such as the lotteries in Rio de Janeiro and in the state of Minas Gerais and these fared less than well against the lotteries run by state lottery behemoth Caixa - the Federal Savings Bank. While the bank only took over the lottery business in 1961


its origins are strongly linked to lotteries. To start operating, in 1861, Caixa needed capital and the resources came from a small tax charged on the 77 lotteries that existed at the time and which were run by the church. In 1969 Caixa was established as a state-owned company by means of Decree- Law 759/1969. Tis decree set forth the company's mission, which includes providing social services, fostering citizenship, and contributing to national development. Te capital of Caixa is fully held by the Brazilian Federal Government and, its


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