GMB - How is Loterj today, in the middle of so many comings and goings in the Brazilian lottery industry?
Kelly Mattos - We are currently operating the instant lottery and the Multiple Chance, two modalities that have been a success in Rio de Janeiro. In addition, we recently launched Tripla Chance, another lottery for numbers, but destined for the south of Rio de Janeiro, a region that encompasses 13 important cities in our state and which also needs Loterj's contribution to assistance entities.
Regarding the institutional situation of Loterj, we are dealing with two ADPF's - Actions for Non-compliance with Fundamental Precept- one from the State Lottery of Rio de Janeiro itself and another from Able (Brazilian Association of State Lotteries). The federal government, through administrative actions via the Ministry of Economy, is banning state lotteries from operating its lottery products and we can’t let that happen. They think we should return to the products of the late 60's, which shows a setback and a huge loss to society in Rio. We have not operated with tickets for a long time, because today the times are different and the people love the games we offer: the scratch card, the Triple Chance and the Rio de Prizes, modalities that allow us to continue investing in the social sector.
Is Loterj in favor to the opening of all gaming modalities, as discussed in Brasilia?
Of course we are in favor. At the time of the bingos, the Loterj supervised and regulated an activity that guaranteed many investments in the social. So, the more resources come to Rio de Janeiro, the more funds we will have to meet the social function of the lottery. We are working towards this with the goal of strengthening the state lotteries in operation and bringing to the active those that had to stop. Before there were 17 state lotteries and today, under pressure from the federal government, only four operate: Loterj, Lottery of Ceará, Lottery of Mines and Lottery of Paraíba.
Is Loterj leading the lottery market in Brazil?
We lead, even by the characteristic of the population of Rio de Janeiro, who loves to play. In 2018, we raised R$ 20 million (US$ 5.25bn), 70% of which was invested in the social. We do a lot of beautiful work, such as kindergartens, shelters for women, APAE's, Pestalozzi. And all the work done with these entities is rigorously scrutinized so that all funds are well applied.
How do you survive fighting against a huge lion that is the federal government?
It's complicated, but as we have a good collection and the public likes our games, we have every way to keep fighting. The government must allow our existence when a broad law is approved for the sector, as it will not be able to supervise as many activities as bingo, casinos, sports betting, ‘jogo do bicho’, and other modalities. By giving this autonomy, we will be able to supervise more effectively and with the correct direction of investments in social actions.
The president of the Republic has already signaled that he would leave the question of casinos being resolved by the states. Would it be an encouragement for you, in Rio de Janeiro?
For us it would be the best of all worlds. The gaming activity already exists and remains clandestine. We have bingos in various parts of Rio de Janeiro, and they are not controlled nor do they contribute taxes to be applied in the social. With the regulation of the whole sector and state oversight, we can act much more effectively to ensure compliance with the law much more efficiently.
It must be very hard for Loterj, who has always had a remarkable performance in partnership with the bingos when they were allowed, running after illegal rooms, because with an unregulated activity these places continue operating in hiding.
It is too bad. At the time bingos existed, we raised more than R$ 67 million (US$ 17.6m) over a period of five years. Imagine how much the social sector benefit in Rio de Janeiro. There was nothing uneven and the oversight was very strict, allowing us to make much more investments in social works. The gaming sector should be geared towards this type of destination.
Do you advocate that states take control of the gaming activity?
Yes ... states have much better conditions to supervise gaming activities, because they are much closer to their communities and would have a more effective action to allocate gaming resources to actions aimed at the most needy portions of the population.
How is Rio de Janeiro positioning itself in relation to the opening of casinos in Brazil? What regions do you intend to target for this kind of enterprise?
I think you can do it the same way it did back in the bingo season. I think it would take a long time to set up a casino within an integrated resort. By opening bingos, the gaming industry could begin to structure itself. It's easier to get from the micro to the macro. After the bingos were opened, clear rules could open urban casinos, with tables and machines and some mega-resorts, not only in Rio de Janeiro, but also in other Brazilian states. These would integrate with the hotel chain itself. Large resorts with casinos would be an added attraction and not the main way to regulate casinos in Brazil.
Should the ‘jogo do bicho’ be regulated?
I am totally in favor of this. The ‘jogo do bicho’ has existed since 1892, that is, long before there were lotteries, it already operated and was always highly respected. No one knows a person who has not received the prize from a piece of paper that served as a wager. It is much better to bring it to legality, because the game will continue to exist. My grandmother is 94 years old and plays until today. Thus, it is better to legalize, because it will be good for the State, which can apply the result of the tax of the game on the social sector.
What evaluation do you make of the Lotex concession?
I think this process is already wrecked. They've done everything they could have done for the concession and nothing happened. There was not enough convincing power for the interested parties to enter the dispute. We operate with the instant lottery and our product has always been very good, with excellent sales and great payout, which I do not see with Caixa Econômica Federal. It seems that it has had something missing despite having an excellent sales network. When we were banned from selling our products on their network, we had a 65% reduction in our bottom line. But at the same time, it gave us the possibility of opening new distribution channels, which made us double our sales points. But to this day many lottery players are dissatisfied with this ban because they knew how much our games attract their customers. If Caixa can’t afford the instant lottery, it should allow state lotteries to do so.
Source: Exclusive Games Magazine Brasil
