GMB - Tell us a little about your career as a lottery specialist…
Marco Taurisano - My passion for numbers and my entrepreneurial spirit brought me to the lottery market in mid-2010, when I started to study the sector in Brazil and abroad and I was able to discover how interesting and extremely under-explored this market is. And at the same time, a market full of opportunities.
Against this backdrop, I delved into the available information. I studied the products and data a lot year by year. I built charts, created metrics and compared results, markets and learned a LOT !!
I gathered knowledge of product, process, national and international markets, developed many projects, some startups and also give lectures about the local sector and the international one for players and people interested in the subject.
About your company Gestão Lotérica, which is its line of work, which customers serves and the projects that is currently working on? What has changed for you with the pandemic and quarantine of COVID-19?
Contrary to what a good portion of the population thinks, the lottery sector is a market with small margins; and based mainly on this characteristic, in 2015, Gestão Lotérica was born.
As the name implies (Lottery Management in English), its main product is the one that really helps the retailer to do 100% of the operational and financial management, which, in general, is an operation full of specificities. With my experience, I can say that without a management system, a lottery shop cannot achieve its efficiency and financial health.
COVID-19 poses many challenges to commerce and the lottery market is no different. But I can tell you that in lotteries it is a little bit worse. This is because, historically, the word "innovation" is far from this market.
I really believe this will pass! But if the lottery market does not prioritize the supply and delivery with "ease" and "convenience", especially in the more than 13,000 physical stores spread over more than 5,000 municipalities in Brazil, the impact will be significant. A few billion reais will remain on the way.
COVID-19 will not leave us overnight. I firmly believe that we will have to face a new reality (new economy), and that will inevitably come the "train of innovation, ease and convenience" where, whoever does not get on, may not be left out of the market, but will suffer a lot.
And in this sense, in Gestão Lotérica we have several projects that we can really put together and call them "LOTÉRICA DO FUTURO" (Lottery of the Future). Wait to see !!!
Taking advantage of the momentum of the coronavirus issue, what is your assessment of Caixa's measures to continue selling lotteries during this period? What could have worked differently?
I would like to begin this answer by clarifying that, based on some information, meetings and restructuring, CAIXA's top management has my credit. In other words, I see that since Pedro Guimarães assumed the presidency of CEF, I see professionalism on the rise. A reality unprecedented in the recent history of the institution.
In my opinion, before COVID-19, CEF took some important steps in favor of the lottery network, such as reducing the rate for loans, suspending the draws of the Federal Lottery and a 15% allowance for the average revenue for 90 days. On the other hand, I understand that it did little to maintain the collection / revenue of the lottery market. CEF could have prioritized online gambling (inside the physical network and not as it is done today), as well as, having dealt with the payment gateway issue. Opportunities that are already within it, need only the priority and involvement of the right people, after all we are talking about "some" billions that are on the table every year.
I know very well that nothing changes overnight, especially in the case of a market of R$ 17 billion/year (2019) and with the potential to be 3x higher, that is, to reach R$ 50 billion/year in the next 5 years, and that there is still much to be done to take advantage of the full potential of it. But CEF needs to pay more attention to this market, for example, efficiently revitalizing its product portfolio, working with the item "FUN" of products, a factor that is conducted with excellence in more mature markets worldwide.
Still talking about Caixa and its projects, what is your assessment of the unbundling of Caixa Lotteries from the bank, thus creating a company focused only on lotteries? Is this the correct step?
Yes. I think that is correct. I do not believe government’s or private monopoly and/or oligopoly will do any economy in the world any good, regardless of the market in which it operates. Based on this premise, I think that this disconnection is perhaps the most important factor to reach the level that the lottery market deserves and is fundamental to absorb all the repressed demand that exists in this sector. Because Caixa Lotteries will focus on operations. In other words, and just as an example, the needs of the lottery market, whether in the IT, marketing, maintenance and management sectors as a whole, will not compete with the demands arising from the agencies, financing, insurance, etc.
One of the achievements of SECAP, the lottery regulator for the market, was the breaking of the market monopoly with the sale of LOTEX. What is your opinion about the end of the monopoly and what can that bring to the growth of the Brazilian market?
It is good for the market and will certainly bring growth. As I already mentioned, I am against the idea of monopoly and I think that the consortium that acquired LOTEX is undoubtedly the one with the best credentials for exploring this market. No doubt it was sold to the best in the world. After all, the current owners of LOTEX hold 80% of the world market in this modality.
Now, considering that the instant lottery modality represents 25% of the world lottery market, I cannot say the same about the amount negotiated and received by CEF. In absolute numbers and at first, US$ 1 billion (in installments) may even be significant for some, but I think this negotiation has great chances of being seen as terrible in the near future.
Regarding the regulation of sports betting, which will be a fixed-rate lottery, what is your assessment as a lottery specialist?
I do not know details of this change with fixed quota. But I repeat that I am super in favor of revitalizing products. I can also say that sports lotteries are unjustifiably scarcely explored in Brazil. Perhaps sports betting are the medium with the greatest growth potential in this market. To get an idea, Brazil was the only country in the world that hosted the 2 main sporting events in the world, World Cup 2014 and Olympic Games 2016, and the lottery market did not enjoy ANYTHING from them.
Still talking about product revitalization, I would like to mention two cases, in fact the major players in this sector, that is, Euromillions and PowerBall, world references that were born in 2004 and 1992 respectively, that have already undergone many revitalizations until they reach what they are today. And what is more, I have no doubt that they only became world phenomena because of these reformulations.
Opening the range to other game modes, what is your position regarding the legalization of casinos, bingos, jogo do bicho that are under discussion in Congress? How can a complete and legalized gaming market help lotteries to grow even more in Brazil?
I don't see it as a bad thing. I am an expert in the lottery market, and I am not comfortable telling you their size and / or potential here, but, in my view, conceptually legalization brings benefits to the economy, which include government and society. In the right way it can be very good for Brazil.
Although a large part of society does not understand or do not know, lotteries and casinos are different markets. The Lottery sector does not compete with casinos or bingos. If they were legalized today, I do not believe in big impacts on the lottery market.
Finally, how do you see the lottery market and what expectations do you have for the future in the short term?
In summary, I can say that I strongly believe in the growth of the lottery market in Brazil. In the short term, I think that resuming the same level of collection before COVID-19 is possible, but it will be very difficult and, if it occurs, it will have to be celebrated as a 2-digit percentage growth.
Much of my credit is related to the great potential that exists in this market, combined with the credibility that I attribute to the notorious professionalism that I see in the command of CEF, more specifically directors, superintendents, vice-presidents and president.
I see things going the right way, slower than the market needs, it is true, but we have to recognize that running a company the size of CEF is like maneuvering a transatlantic. I really hope that the independence of Caixa Loterias will be declared soon, since I am sure that this will provide answers to the market and help the growth of the sector to happen at a more acceptable and efficient speed.
Source: Exclusive GMB
