JUE 22 DE FEBRERO DE 2024 - 04:48hs.
The agreement is for 1 year with fees of US$ 430,000

Ernst & Young will advise Caixa on modeling its sports betting business

A few days ago, Caixa Econômica Federal announced its entry into the sports betting business. To structure the most appropriate business model, the state-owned bank contracted EY (Ernst & Young), one of the world's most important multinational firms offering professional services in auditing, taxes, finance, legal advisory, and management consulting, among others.

The information comes from the publication of the notice in the edition of the Official Gazette on February 8th.

Caixa informs that Ernst & Young Assessoria Empresarial Ltda was contracted to provide specialized services for structuring a business model for Caixa's involvement in the Fixed Odds Betting (Sports Betting) modality.

The agreement, which was signed on January 26th of this year, based on legal grounds in article 28, paragraph 3, of Law 13,303/2016, has a term of 1 year, effective from January 27, 2024, with the total value of the contract being R$ 2,150,000.00 (US$ 430,000).

In January, the president of the entity, Carlos Vieira, revealed that Caixa Econômica Federal is preparing to enter the online sports betting market and mentioned that the business will be done through a partnership between a lottery company recently established by the bank and a private partner.

"We have a whole plan to position Caixa in the world of bets," Vieira said. "We already have an idea of the valuation (business value) that this company would have in a year, a year and a half," he added.

According to Vieira, although it involves a partner, it is already certain that the product will carry the Caixa brand. Until the advent of sports betting, Caixa practically dominated the lottery market in the country alone.

However, in recent years, this reality has been rapidly changing. According to the global consultancy Comscore, the online betting sector grew by 281% from 2019 to 2023, with 42.5 million users in the country.

Although it was only regulated last month by the Chamber of Deputies, the online betting market is already huge in the country.

According to estimates, this market generated over R$ 100 billion (US$ 20bn) in Brazil in 2023. As a result, it is estimated that platforms made R$ 13 billion (US$ 2.6bn) in revenue last year in Brazil, 71% more than in 2020.

This means that the bank will enter a sector already populated by dozens of betting platforms. In a recent report, XP's team considered that the sector's regulation could make it less attractive due to taxation.

Source: GMB