Brazil – LOTERJ begins search for lottery and sports betting operator for RioBy Phil - 21 May 2021
The State Lottery of Rio de Janeiro (LOTERJ) published a call for tender on May 18, in Rio de Janeiro’s Official Gazette, as it looks for a company ‘to provide services for the creation of lottery products, involving draws and betting records, and instant lottery as well as fixed-odds sports betting games, whether physical or virtual.’
The terms of the agreement will be 60 months, and the estimated value will be R$260.5m (US$ 49.5m) with an announcement to be made on July 5.
LOTERJ stated: “The object of this competition is to hire a legal entity to, exclusively on behalf of the Rio de Janeiro State Lottery – LOTERJ, provide the following services: creation of lottery products, including games and events involving raffles and betting records: the distribution and commercialization of prediction lottery products, instant lottery, games involving fixed odds betting in sports, whether physical or not, within the scope of the State of Rio de Janeiro: and, also, the elaboration, proposition, orientation and execution of advertising campaigns related to the games developed and marketed within the scope of the contract to be originated in this event.”
The tender includes the development of a technological platform, the development of control applications, payments, and electronic commerce of lotteries (software) through physical and/or multimedia means. Any consortium made up of foreign and Brazilian companies, must be led by the domestic entity. The bidder must submit a registration list with 3,000 points of sale in the State of Rio de Janeiro with the name of the person responsible for the point of sale.
LOTERJ believes first year revenue will be in the region of R$400m for the first year of operation, increasing to BR$1.06bn by the fifth year.
Last March, Governor Cláudio Castro prepared the groundwork for the implementation of online gambling and the exploitation of sports betting by Loterj. He issued Decree 47.537 / 21, which seeks to adopt operational and technological measures to improve the performance of the lottery in the Rio de Janeiro market. This decree is part of the set of edicts that now reaches the market that includes the exploration of online gambling, including sports betting, in addition to the need to define the payment methods to be adopted with the beginning of the operation.
Loterj determined in the initial Public Notice that the payout (prize) will be at least 40 per cent of the sales volume of a series and without an upper limit, and the contractor must present the prize plan.
There is a concern that given the list of demands, the only Brazilian company able to bid is Caixa Econômica Federal, which already runs Brazil’s national lottery. Any foreign consortium, consisting of would need to combine a WLA member with a local entity with access to over 3000 points of sale in Rio de Janeiro.
The Ministry had been expected to allow several sports betting operators to enter the Brazilian market.