JUE 28 DE MARZO DE 2024 - 09:54hs.
Expecting competition with future LOTEX

Brazil: Finance Ministry and Caixa negotiate realignment of lotteries payout

The Brazilian Ministry of Finance, through the Secretariat of Fiscal, Energy and Lottery met with the leaders of the lottery industry of the Caixa to discuss the realignment of lotteries payout operated by the state bank. According to Alexandre Manoel Angelo da Silva, Under Secretary for Fiscal Governance and Lottery Regulation, this measure aims to balance the value of the prizes paid by the Caixa Lotteries in the future competition that will begin after the sale of the LOTEX concession.

The meeting was attended by the Secretariat for Fiscal, Energy and Lottery Follow-up - Sefel, Secretary Mansueto de Almeida and Alexandre Manoel. Representing Caixa Econômica Federal were Valter Gonçalves Nunes, vice president of the Government Funds and Lotteries, and Gilson Braga, Superintendent of Lotteries.

Alexandre Manoel told GMB that the two main issues discussed at the meeting were related to the future LOTEX operation that is in the process of awarding a concession to a private company.

According to the undersecretary, the first issue was the "realignment of payout of the lotteries operated by CAIXA, in order to give competition isonomy to it in order to compete with the future LOTEX concessionaire."

He explained that: "The realignment of payouts is being done in conjunction with Caixa; is an old demand of them. The urgent need for such a readjustment now occurs because the lottery market will soon be from the concession of LOTEX, a competitive duopoly, where Caixa will compete with the new LOTEX operator. With this, it is necessary to give isonomic conditions of competition to Caixa, aligning the payouts of its modalities (draw of numbers, passive and sports prognostics) to those practiced in these modalities in the main international markets.”

As for size and when the readjustment will take effect, Alexandre Manoel responded: "This is being discussed with Caixa, the fact is that there will be realignment to what happens in the main international markets. We can not say when it will come into force, as this depends on legislative change. It is worth mentioning also that this realignment is formally included in the strategic planning of the Ministry of Finance, because it is a necessity, due to the new market structure (competitive duopoly) that will come to exist in the domestic market of lotteries, starting from the implementation of LOTEX."

The gross sales of LOTEX with the tickets sales will be legally divided into three parts: 65% for payout, 18.3% for the concessionaire, and 16.7% for the Union. This payout is only surpassed by the Federal Lottery which pays 69.3% (gross) and 45% (net). Currently, Brazil's prognostic competitions continue to have the lowest gross (51.15%) and net (31.55% average) prizes in the world, according to IJL (Legal Game Institute).

In the second part of the meeting, Secretary Mansueto explained how the decision was made by the Ministry of Finance to promote the opening of the domestic lottery market, through the LOTEX Plena Concession to the private sector, implementing a "Duopoly of Competition" instead of the existing monopoly for over 55 years.

The privatization process of LOTEX keeps on going. Last week, the report of Minister Aroldo Cedraz was approved in the TCU (Federal Court of Audit), giving the entity's endorsement to the project prepared by the Ministry of Finance and BNDES. With this, the ministry obtained a green light for the publication of the public edict that will deal with the bidding of the lottery and the expectation is that the concession process will be finalized in the first half of 2018.

Fonte: GMB