Brazil – Government looking to privatise instantsBy Phil - 5 April 2016
The Brazilian government is looking to privatise instant lottery tickets this year in order to increase revenue.
Instants are currently run by the largest state owned bank; the Caixa Econômica Federal (CAIXA). 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.
Under present plans now being studied in the Ministry of Finance a private company would be permitted to develop the business after an initial public offering (IPO) or after a licence tender process was carried out. The new licence holder will be able to decide on new points of sale including self-service machines, as well as new games. While CAIXA would still retain the monopoly over lottery gaming the complete operation of instants including pre-production, production, logistics, telemarketing, sales and after-sales support would move to a single company or consortium of private companies, which can be made up of both national and international companies.
According to local press, a number of foreign companies are already showing interest in running instants including lottery giant Scientific Games. Representatives of the company have already participated in meetings with representatives of CAIXA and have opened up an office in the country according to local sources.
The privatisation of instants would be a logical step as the government takes an increasingly liberalised stance on gaming. In August last year the government passed a new law which allowed for a new football themed instant game in order to raise revenues for cash strapped football clubs called Lotex. The legislation affects the renegotiating of millions of pounds in back taxes owed to the government by football clubs and is predicted to ensure better management of the sport in the future.
Last month, President Dilma Rousseff extended the themes for Lotex with immediate effect so that from now on the game is not restricted to football. Consequently Lotex can now be based around holidays, cultural events and licensed fictional characters as well as other themes in order to increase the commercial attractiveness of the product.
The Caixa Economica Federal is the second largest federal government bank in Brazil and runs the Mega-Sena – the largest lottery in the country. Around half of the income generated by CAIXA run lotteries is ploughed back into Brazilian society and is channelled to its beneficiaries. Instant tickets are becoming increasingly popular in Brazil and sales increased by 26.5 per cent in 2014 according to the latest figures released by the bank.