Operator News
Brazil – CAIXA lottery revenues decline in Brazil
By Phil - 11 January 2017
The collection of funds generated by lotteries by the largest state owned bank and lottery operator – the Caixa Econômica Federal (CAIXA) are down according to the Secretary for Economic Monitoring.
Funds generated by CAIXA lotteries reached R$12.8bn a 13.8 per cent decrease compared to last year when the figure stood at R$14.9bn. According to the The Secretary for Economic Monitoring, which is part of the Ministry of Finance, the decrease is due to the downturn in the Brazilian economy in 2016.
The Ministry reported that that R$5.03bn was transferred to investment for the “development of priority areas.” Social Security received R$2.1bn and the FIES (the Student Financing Program for Higher Education), received R$1.2bn.
A further R$950m went to national sport programmes. The National Culture Fund received R$359m, the National Penitentiary Fund received R$385m while the APAE (Association of Parents and Friends of those with Special Needs) and the Red Cross received R$8.9m. The Treasury also reported that the government collected R$1.07 billion in income tax on prizes paid out to winners. Of the total revenue generated by the lotteries, R$6.1bn went to the National Treasury.
A spokesman said that there was still room for significant growth in the sector. “Federal lotteries have great potential for expansion in the country, since, in comparison to what is happening in the world, few lottery modalities are explored in Brazil, which substantially affects per capita revenue,” the Finance Ministry said.
News of decreasing revenues comes at a time when it is looking increasingly likely that CAIXA could have a major role to play in the running of online gaming should the government give online gaming the green light. In November it was revealed that new gambling legislation under consideration in the Senate would place online gaming under the supervision of the Federal government and Caixa would become the regulatory body and be responsible for monitoring the industry and granting licences.
In addition in September local media outlets reported that this year CAIXA plans to operate a unit which will look into ways to expand into the casino, and bingo market and would also allow for a legalised version of the popular Jogo do Bicho or Animal Game. At the same time, according to Folha De S. Paulo, the government is also looking at ways to create what would initially be a state-owned online sports betting company. Foreign operators would be invited to take part in the venture in which CAIXA would remain a minority investor once the company was privatised.
In order to raise additional cash for state coffers CAIXA’s instant lottery arm Lotex would be privatised as well. According to government sources, the privatisation of instant tickets would generate revenue of between R$2.2bn and R$4bn a year while annual revenue for the government would stand at around R$1bn. Combined, the sale of both privatised instants and the right to offer online sports betting, could raise R$8.4bn for the government.
