Two municipalities on complete opposite sides of Brazil: Bodó (RN) and Rosana (SP) have become symbols of an emerging dynamic: small towns advancing ambitious gambling projects while operating in a legal territory firmly controlled by the Federal Government.
In Rio Grande do Norte, the state's Public Prosecutor's Office (PGJ) filed a Direct Action of Unconstitutionality against the law that created Bodó's municipal lottery, LotSeridó.
The challenge argues that fixed-odds betting is a federal matter and that municipalities lack both constitutional authority and operational capacity to regulate a sector involving complex supervision, digital compliance and anti-money laundering controls.
Prosecutors also pointed to the earlier seizure of up to BR145m ($27m) in assets, noting that the municipal framework had facilitated an irregular network that moved roughly BR415m in ten months, allegedly using shell companies and falsified digital credentials to mislead consumers.
It doesn't stop there
A similar dynamic is unfolding in Rosana, São Paulo, where the municipality approved a law allowing casino concessions tied to tourism development.
However, the legislation is only valid if Congress passes PL 2.234/2022, which would legalize casinos nationwide.
Experts noted that the Rosana law conflicts with the terms of the federal bill itself, which reserves licensing and tender procedures to national authorities, not municipal governments.
At most, cities can prepare tourism and infrastructure strategies, but they cannot independently green-light gaming activities.
Together, the two cases illustrate how local governments, motivated by revenue expectations, tourism ambitions or competitive pressure, are testing boundaries that constitutional law keeps firmly closed.
The STF's settled understanding makes municipal initiatives legally incompatible with the national model
