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  • Writer's pictureBrasil Fernandes Advogados

The Concept of Lottery, Lottery Modality and Lottery Product

New terminologies for the study of State Lotteries in Brazil

With the decision, which recognizes the competence of the member states and the Federal District to operate Lotteries and the advance in the implementation of state lottery services in several states of the country, an adequate terminology is required for the best legal interpretation of the matter.

1. Introduction

This article proposes to modernize the classification of the institutes of the lottery activity, within the scope of Lottery Law in Brazil. This implies reviewing classifications of institutes that are central to the topic as a way of rethinking the directions of its study, as well as offering tools that are useful for understanding the scenario that has been drawn after the recent change in STF caselaw.

For this purpose, one should pay attention to the warning made by Alexandre Santos de Aragão, based on the work of Genaro Carrió, about legal authors initiative in proposing new terminologies in jurisprudence: "classifications are neither true nor false, they are functional or useless; [...] there are always multiple ways of grouping a field of relations or phenomena; the criterion for deciding for one of them is given only by criteria of scientific, didactic or practical convenience". Based on this orientation, we defend the pertinence, functionality and practical usefulness of what we will now expound.

2. The Propposal

With the Supreme Federal Court's decision in ADPFs 492 and 493, dated 09/30/2020, a new federative design took shape, giving more autonomy to the regional units: the Union's private competence to legislate on "consortia and lotteries" (art. 22, XX, CRFB/88) does not exclude the material competence (art. 25, §1, CRFB/88) of the 26 states, and the Federal District, to institute Lotteries and explore all the Lottery Modalities established by federal law. This new scenario makes the new terminology proposed here relevant, especially in order to distinguish and reconcile the choices of the Public Administration in the exercise of the lottery public service (material competence of the States and Federal District) and the permitted forms of lottery exploitation provided by federal law (legislative competence of the Union).

Lottery[1], according to our proposal, is a term adopted to designate the organ or public entity, member of the Public Administration of the States, the Federal District, or the Union, which regulates and operates (directly and indirectly), lottery modalities, with the main purpose of obtaining revenue to finance social demands, notably social security, according to the Federal Constitution, in the text of Article 195-III. Likewise, Lottery is the "place" where this activity is administered and cannot be confused with the lottery modality or product.

Lottery Modalities are normative forms, set forth in law stritu sensu (according to the STF, of the competence of the Union), which allow the Public Administration (Executive Power of the Union, the States and the Federal District) to create, through regulatory acts, Lottery Products . In other words, Lottery Modalities define, within the "regulatory framework", the different forms and possibilities of operating lottery services. Examples of this dynamic are the modalities of numerical lottery, instant lottery modality, etc., provided for in art. 14 of Federal Law 13.756/2018 and fixed-quota sports betting, provided for in art. 29 in the same Law; and

Lottery Products are the expression, by means of regulatory acts, of the public administrator's opportunity and convenience when deciding to explore a certain Lottery Mode typified by law stricto sensu, such as "Mega-Sena", "Lotomania", RaspaRio, Minas5, Totolec etc. In this regard, a lottery product is the implementation of the lottery activity, through which the consumer/user finally receives, in a regulated market environment, the ultimate consumer good of this activity: the chance of winning a prize and, at the same time, voluntarily contributing to a social interest purpose.

On one hand, it is clear that the federal entities cannot create new modalities; on the other hand, the States and the Federal District can make possible, through their own organization and administration, the exercise of the public service to which they have been granted authority by the STF.

Hence the need to distinguish between Lottery and Lottery Modality: the first designates the umbrella of state attributions and competencies necessary to provide the Lottery service; the second designates the form, or rather the "shape" on which the federative entities must base themselves in order to operate the lottery service and create their respective state/distrital Lottery Products.

The Lottery Product, in its turn, is an appropriate designation for the regulation of Lottery Modalities based on the "forms" defined in federal law. In other words: the federated entity that owns the service, if it sees fit, may create as many state lottery products as it desires adopting the regulatory framework of a lottery modality, such as, for example, the specific lottery drawing.

Our proposal disrupts a tradition in Brazilian law of not making distinctions in this matter, specially between Lottery and Lottery Modality. Therefore, we demonstrate below the relevance of the concepts of Lottery, Lottery Modality and Lottery Product.

3. The evidence for the relevance of the new terminology

Two pieces of evidence support what we sustain above.

The first is the absence of a semantic agreement in the legislation on an appropriate designation of the institutes. Federal Law 13.756/2018, to stay in just one example, demonstrates a technical impropriety in article 14, §1: "The product of the total collection obtained through the capture of bets [...] § 1 are considered lottery modalities: I - federal lottery (passive species): lottery in which the player acquires a ticket already numbered, in physical (printed) or virtual (electronic) media". The law uses the terms "Lottery Modality" and "Lottery" with the use of synonymy, for merely stylistic purposes, in clear disagreement with the good technique required by Complementary Law 95, which imposes on the legislator the rule: "express the idea, when repeated in the text, by means of the same words, avoiding the use of synonymy for merely stylistic purposes.[2]

Moreover, besides being used to designate what we call here a lottery modality, the term "Lottery" has, as a current usage, the denomination of (i) an activity or (ii) an institution.

Several institutions established around the world, in several jurisdictions and not only in Brazil, call themselves in this way: "Oregon Lottery", "National Lottery" (Ireland), "Loteria do Estado do Rio de Janeiro", among dozens of other examples.

The use of the term Lottery is useful to designate a public organ or entity, since the lottery activity necessarily implies state activity that, in a regulated environment, raises non-tax revenues to meet its purposes. By the way, members of the World Lottery Association (Regular Members) are entities that operate betting games or "lottery products", as the organization's website states: "WLA Regular Members are officially authorized entities that offer lottery games and/or betting games in a regulated environment.

Secondly, we cite examples of the pertinence of the term Lottery Product. Decree 36.453/2020, which regulates State Law 11.389, of December 21, 2020, of the State of Maranhão, denominates "lottery game" as follows: "§ 2 For the purposes of this Decree, a lottery game is considered any operation, game or bet, in the lottery modalities provided for in Federal Law 13.756, of December 12, 2018, to obtain a prize in cash or in goods of another nature." Another example in state legislation of subnational entities is in Decree 41.037, of February 19, 2021, of the State of Paraíba, which establishes, in its article 7, that "lottery games" will be outlined in game plans and approved by ordinance of the Superintendent of LOTEPI.

Although intuitively, the legislators of both state entities express at least two notions: the Maranhão law recognizes a separate figure of the Lottery modality, the lottery game, as the normative expression, at the state level, of the games and dynamics provided by federal law; in the Paraiba law, in turn, there is the understanding that the figure created at the state level constitutes the expression, via a state regulatory normative act, of the will of the state public administrator. Ultimately, what the aforementioned state regulations call a "lottery game" is what we understand to be called, in our literature, a Lottery Product.

Last but not least, the drafts presented by the Federal Government, through SECAP/Ministry of Economy, for the regulamentation of fixed-quota sports betting, including art. 29 of Federal Law 13.756, also use, in several passages, the expression "lottery product".

We understand that the notion of "product" seems reliable to its legal nature, since it necessarily results from a legislative prediction that precedes it and that gives it legal backing (Lottery Modality, provided for in federal law). "Product" is a consequence of something, it is a result. Hence the pertinence of the term "Lottery Product", rather than "lottery game"; the latter has a broader meaning than that which constitutes its legal nature.

4. Conclusion.

Far from a mere stylistic purpose, distinguishing Lottery, Lottery Modality and Lottery Product confers a better interpretation in accordance with the Constitution of the Republic and the decision of the STF in ADPFs 492 and 493, to the extent that it makes effective the right of the states to the federative principle, to autonomy and to isonomy, in addition to clearing up possible confusions between different legal institutes.

One can, by means of the proposed terms, preserve the Union's legislative competence (art. 22, XX, of the CRFB/88 and S.V. no. 2) without waiving the residual competence of the States and Federal District (art. 25 of the CRFB/88); this can also be understood as follows:

(a) Lottery Modalities are the permitted forms of lottery exploitation provided by federal law and the expression of the legislative competence of the Union; and

(b) Lottery and Lottery Product are the choices of the federative entity and its Administration in the exercise of public service and the expression of the material competence and residual competence of the States and Federal District.

Therefore, barring a better judgment, the proposal is adequate because it appropriately distinguishes the roles played by the federal entities and the respective Public Administrations in this new scenario for the Brazilian Lotteries, after September 2020.

Assuming the premises defended here, one may speak of Lottery in the strict sense and Lottery in the broad sense. The first sense refers to an institution that is part of the Public Administration, responsible for the organization of the service; and the second, as stated in the expression "public lottery service", means at the same time Lottery, Lottery Mode and Lottery Product.

This is, after all, a situation where the expression appears both as genus and species, similar to what occurs, for example, with the concept of "proportionality", more common in the doctrine of Constitutional Law. Note: "proportionality" is a genus, since it contains three species (or: sub-principles); but, at the same time, the expression "proportionality" also appears as a species, since it is divided into "necessity", "adequacy" and "proportionality in the strict sense".

Thus, by aiming at a practical purpose, we understand that with the use of the terms proposed, clarity and unity of meaning in the law can be achieved. This is in line with the teachings of Alexandre Santos de Aragão, who states that the proposal for a terminological reform "is only justified if it increases the clarity of ideas by increasing their language, that is, if the reform brings the terms closer to the ideal of 'unity of meaning.

This " enhancement " of the everyday legal language in the field of Lotteries in Brazil is beneficial, not because of technical preciosity, but because of a practical need imposed by the normative and cultural context that came into force after the Supreme Court's decision in ADPF 492 and 493. Thus, we intend to offer more adequate tools to enable a more precise interpretation, as much as sensitive, to the purposes of State and District Lotteries in Brazil.

Rafael Biasi, Gambling Law.

Alexandre Amaral Filho, Constitucional Law

Roberto Carvalho Fernandes, Bookwriter of “Direito das Loterias no Brasil” (The Lotteries Regulation in Brazil) and owner of Brasil Fernandes Law Firm.

[1] FERNANDES, Roberto Brasil. Direito das loterias no Brasil: conceitos e aspectos jurídicos. Belo Horizonte: Fórum, 2020. p.17. [2] LC 95. “Art. 11. As disposições normativas serão redigidas com clareza, precisão e ordem lógica, observadas, para esse propósito, as seguintes normas: [...] II - para a obtenção de precisão: [...] b) expressar a idéia, quando repetida no texto, por meio das mesmas palavras, evitando o emprego de sinonímia com propósito meramente estilístico;”


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