"It was a stone in the shoe, a lump in the throat that has finally been swallowed up today," says Wesley Callegari Cardia, special secretary of the Investment Partnership Program (PPI). After two auctions with no interested companies, they were able to complete the sale of LOTEX to the Estrela Instantânea consortium today.
This was the Bolsonaro government's third attempt to sell Lotex. Two other events were canceled due to lack of interested parties. The auction was held by BNDES (National Bank for Social Economic Development).
“We had only one interested, but it is the world's biggest operator of the market. We always want them to be companies that know the industry and therefore have a successful and safe operation,” said Wesley. BNDES head of department Guilherme Albuquerque said that the winning consortium will invest in the country, which is the largest untapped lottery market.
To attract investors, SECAP, BNDES and PPI have joined forces to bring better communication to capture good prospects and not change value even after two auctions with no interested parties. “Although they had two deserted auctions, the BNDES, the PPI and the Ministry of Economy did not change a penny of the study. The only difference is that the installment was 4x and now it is 8x,” explains Guilherme.
Albuquerque also celebrates the attraction of the two largest lottery operators in the world. “They will invest in about 65,000 points of sale in the country. Brazil is the largest untapped lottery market. Although there were two deserted auctions, we did not change the studies done. What happened from the first here was a matter of transparency and communication to the market and we changed the installment from four to eight times ", he said.
In instant lotteries, billing can be divided into three parts: 65% will return to the gambler in the form of prizes, 18.3% will be paid to operators and 16.7% will return to the government in the form of “voluntary tax.” Alexandre Manoel, head of the Ministry of Economy's Secretariat for Public Policy Evaluation, Planning, Energy and Lottery, said that most of the money goes to public safety.
According to Secretary Alexandre Manoel, together, the two companies in the consortium that are listed on the New York Stock Exchange, manage more than 80% of the world lottery market. "It is very important that the service be exploited by the largest firms in the world, because the more they raise, the more the government collects," he argued.
"In up to 5 years, we expect the consortium to earn a certain amount that will generate for public safety about R$ 1.5 billion (US$ 365m) to R$ 2 billion (US$ 485m) per year." Much more important than the grant, is this annual revenue. In 15 years, it will generate many resources for society, according to Alexandre.
The projection of BNDES is that the operation of Lotex generates R$ 19 billion (US$ 4.6bn) return to the government in the 15 years of concession. In the calculation that takes into account taxes, the value would be R$ 23.5 billion (US$ 5.7bn). The company will be able to explore the service for 15 years, counting the time needed to structure the business. The company will be responsible for the operation of LOTEX nationwide, in physical retailers and in electronic channels such as internet and smartphones.
Also present at the event were the director of BNDES Privatizations, Leonardo Cabral, and the Deputy Special Secretary of Finance, Esteves Colnago Júnior.
Source: Exclusive Games Magazine Brasil
