Private concession article vetoed

Brazil's Government approves bill that creates Health and Tourism Lotteries

Jair Bolsonaro, Brazil's President.
2022-09-22
Reading time 2:50 min

The President of Brazil, Jair Bolsonaro, sanctioned on September 21 Law N° 14.455, which creates the Health and Tourism Lotteries. According to the text, part of the profits collected from the games will be destined for the National Health Fund (FNS), in the case of the Health Lottery; and for the Brazilian Tourist Board (Embratur), in the case of the Tourism Lottery.

As reported by BNL Data, the project had arrived at the beginning of the pandemic and, in May 2021, after being analyzed by the federal deputies, the text provided that the funds collected would be used for the prevention and fight against the coronavirus, for as long as the state of emergency in public health lasted. It also provided that the Tourism Lottery would mitigate the economic impacts of the tourism sector during the pandemic.

The bill underwent changes after its approval in the Senate, which was well received by the Chamber of Deputies, which approved it on August 30. Among the changes is the permanent nature of the Tourism Lottery; besides the provision of resources to the National Health Fund and to Embratur, after the payment of premiums and the payment of taxes and social security.

Meanwhile, the sanctioned text authorizes the implementation of the modalities of sports betting, fixed odds betting and numbers betting with the following percentages:

- In the numerical prediction lottery modality: 95% for the operator and 5% for the National Health Fund (FNS), in the case of the Health Lottery; and for the Brazilian Tourist Board (Embratur), in the case of the Tourism Lottery.

- In the sports betting and fixed odds lottery modality: 95% for the operator; 3.37% for the FNS, in the case of the Health Lottery, and Embratur; in the case of the Tourism Lottery; 1.63% for the clubs that grant the rights to use their names, trademarks, emblems, hymns, symbols, and similar items for their diffusion.

Furthermore, the sanctioned norm provides that the amounts of prizes related to lottery products not claimed by bettors included in the statute of limitations will be reverted, respectively, to FNS and Embratur, in view of the financial and budgetary programming of the Federal Executive Branch.

Bolsonaro vetoed an item

The proposal also provided the concession to the private initiative of the operation of the Health and Tourism Lotteries, but Jair Bolsonaro vetoed - as BNL Data had anticipated at the time - Article 3 of the proposal, which established a period of 30 days for the Ministry of Economy to create the rules for the granting of the operation of the Health Lottery by the Ministry of Health, and the Tourism Lottery by the Ministry of Tourism.

In this regard, in statements to the press, the General Secretariat of the Presidency explained that the Brazilian President vetoed the proposal because he considered it unconstitutional. "The measure was considered unconstitutional since by stipulating a term for the Ministry of Economy to sanction the norms to grant the operation of these lotteries, it would violate the provisions of Article 2 and numeral Il of the caput of article 84 of the Constitution", they explained.

According to the above-mentioned media, "with the presidential veto, any hint of concession of exploitation of the modalities by the respective ministries was excluded from the text, and in this case, since they are union lotteries, the regulatory decree will be able to establish that the Secretariat of Economic Monitoring of the Special Secretariat for Productivity, and Competitiveness of the Secretariat of Economy will regulate and delegate the operation of lotteries to the Federal Savings Bank".

They also stated that "the Undersecretary of Betting and Commercial Promotion of the Ministry of Economy and Lotteries Caixa will be able to create quality products with the new percentages approved for the Health and Tourism lotteries in the modalities of sports betting and numerical predictions".

Additionally, Caixa will be able to operate the fixed odds betting modality, even before the regulation of sports betting issued by the Union. In other words, "the percentages of new products may also represent the withdrawal of some modalities that represent less than 5% of Caixa Loteria's product mix, with the exception of the Federal Lottery", the officials detailed.

Click here to see Law N° 14.455 which was approved by Brazil's Government.

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