Brazil – IGT and Scientific to split Brazil’s instant lottery contract for LotexBy Phil - 23 October 2019
The Brazilian instant lottery Lotex will be split between two of the gaming industry’s biggest names; International Game Technology and Scientific Games.
The two are likely to split the $200m scratch card contract with a launch by September 2020.
Walter Bugno, IGT CEO International and Pat McHugh, Scientific Games, EVP & Group Chief Executive, Lottery, said: “The award of the Brazilian LOTEX concession represents an important step towards the privatisation of lottery instant games in Brazil, the world’s eighth-largest economy. We are excited and honoured by this opportunity for IGT and Scientific Games to help define the evolution of instant lottery in Brazil through a 50-50 joint venture over the next 15 years. This business partnership will benefit the people and government of Brazil and brings together the vast experience and market leadership of global leaders in the instant game market to help position LOTEX for success.”
Analysts reacted positively. Macquarie Securities gaming analyst Chad Beynon said: “We believe this news will be favourably received by investors as these companies have secured a significant growth opportunity while also providing greater clarity on the free cash flow picture, which we view as an important tenant of each companies’ investment thesis.”
“Current lotteries already generate roughly $4bn plus in annual sales, and the population has shown a propensity to gamble, partly reflected by tourism to Las Vegas,” he added. “Given a stagnating economy and a widening budget deficit, we expect Brazilian legislators will be supportive of Lotex’s success.”
Caption: Scientific’s Pat McHugh and IGT’s Walter Bugno