Pernambuco Court Orders Halt to Municipal Lotteries

The Court of Accounts of the State of Pernambuco (TCE-PE) has issued a formal warning to all 184 municipalities in the state, advising them to halt initiatives related to the creation and operation of municipal lottery services.

In its notice, the court recommended that local authorities suspend the enforcement of any laws or decrees concerning the regulation, concession or implementation of municipal lotteries. The guidance also states that municipalities should avoid launching new administrative procedures connected to managing or introducing such services.

Additionally, the court advised that any ongoing bidding processes or contracts already signed for municipal lottery operations should be immediately paused.

Supreme Court Decision Behind the Measure

The directive follows a recent ruling from the Supreme Federal Court of Brazil. In the decision, Justice Nunes Marques ordered the suspension of lottery and sports betting activities organised at the municipal level.

After the ruling, the Public Prosecutor’s Office linked to the audit court proposed issuing an official alert to municipalities across the state.

The announcement was made by Carlos Neves, president of TCE-PE, during a session held last Wednesday. He emphasised that the measure is intended to ensure compliance with the judicial decision delivered at the federal level.

According to the guidance, municipalities should refrain from creating regulations governing lottery operations and must avoid starting any processes related to concessions, implementation or management of local lottery activities.

Suspension of Current Municipal Lottery Operations

The injunction also calls for the immediate halt of municipal lottery activities that are already operating, along with a freeze on the accreditation of new local lottery operators. These restrictions will remain in place until the Supreme Court reaches a final decision on the matter.

The measure also prevents further expansion of municipal lottery projects, which have begun appearing in several Brazilian cities in recent years.

Penalties for Non-Compliance

The ruling establishes financial penalties for municipalities and companies that fail to follow the suspension order.

Cities or operators that continue running municipal lottery activities in violation of the injunction could face fines of R$500,000 per day.

Mayors and executives of accredited companies could also be personally liable, facing penalties of R$50,000 per day if the operations continue despite the directive.

Federal Rules on Lottery Operations

Brazil’s Federal Law No. 13,756/2018 outlines the legal framework governing lotteries in the country.

Under this legislation, only state governments and the Federal District are authorised to establish and operate lottery services and these operations must follow federal oversight and regulatory guidelines.