Alexandre Manoel explained that in order to reach this decision not to authorize the increase, SECAP conducted a study taking into account the elasticity and price of existing market demand that pointed to a decrease in government revenue, which has legal restrictions.
“Given that if you raise Caixa's ticket price leading to lower revenue, as it happened in 2014 and 2015, you lead to lower government revenue. And as government revenue decreases, I have an obligation to compensate. And it's not because I want to, it's because the law forces me. Article 114 of the Budgetary Guidelines Law (LDO) requires that if you make any kind of public policy that provides for revenue waiver, you have to compensate. And that's what we did, we only act according to the law,” he explained.
According to the secretary, the function of pointing out where this compensation would come from is from Caixa, and that SECAP is open to receive suggestions from the bank. “In our negative to Caixa, we didn't say we wouldn't do it. We said that to do it should be pointed out the compensation. So, it was Caixa who should indicate the compensation. We give it back to them who can officiate again telling us how they will be compensated. How can you offset a waiver of public revenue, in this case, not specifically tax? Either you reduce an expense or increase a revenue,” says Alexandre Manoel.
He also stated that there is no friction between the secretariat and the only lottery operator in the country and that they have only complied with the law.
“There is no friction at all. We only, knowing our legal competence, act as the law requires us. As it is a monopoly, we had to do analysis and making a study of the demand and had resignation, we gave our opinion that they had to make the compensation,” he said.
Regarding the monopoly issue, Alexandre Manoel was emphatic in stating that this is the only reason this impasse was generated, because in another scenario there would be no need for authorization from regulators and the price could be changed automatically.
“If the monopoly is broken, for example, when LOTEX is granted, now in August, September or October, I don't know when the auction will happen, automatically their increase is granted. Because we cannot control the price of an activity that is not monopolistic. We only did the control because it is a monopoly,” concluded the secretary.
Source: Exclusivo Games Magazine Brasil
