Operator News
Brazil – Lotex licence delayed again as Brazil’s Government look for more bidders
By Phil - 26 July 2019
After seven attempts, the Brazilian government has decided to relax the rules for the concession for the instant lottery LOTEX.
Now the government plans to re launch with an announcement expected in August which they say will attract the interest of at least 30 companies.
After the successive presentations of LOTEX to international investors (during road shows in cities such as London and Las Vegas), the government made the first auction attempt in July last year but had to postpone it because of low interest.
The government continued to postpone the tender. New dates were established and in total the terms were modified five times. Companies had been wary due to the upcoming election and, later, with the change of government.
However, the government still faces difficulties. Scheduled for February of this year, another auction had to be cancelled only the day before.
“We are making the most flexible announcement to attract the thirty [largest companies], precisely to generate competition and ensure a market opening,” said Alexandre Manoel, Secretary of Public Policy Evaluation, Planning, Energy and Lottery of the Ministry of Economy.
Now the government intends to reduce the required amount of previous experience for operating the instant lottery service. In the original announcement, the company interested in the business had to prove that it had already managed an instant lottery service with revenues of R$1.2bn or more.
In addition, the government plans to reduce the value of the guarantee by up to a third of what was intended in the last announcement meaning that the new value could fall to around R$9m.
The Brazilian Development Bank (BNDES) a federal public company associated with the Ministry of Development, Industry, and Trade and the main financing agent for development in Brazil has been overseeing the privatisation of CAIXA’s instant lottery arm. Then President Michel Temer issued a decree in 2017 transferring the responsibility for managing the privatisation process of Lotex to both the BNDES and the Ministry of Finance. According to initial estimates released by the Federal Government’s Investment Partnerships Program (PPI) the sale of Lotex would generate around R2.2bn for the government.
However according to Brazilian newspaper Globo, in the first tender, which should have been in June 2018, the government came to project a minimum offer of R$1,000m. However, due to adjustments and successive deferrals, the minimum bid expectation has since been reduced to around R$640m, according to data from the Investment Partnership Program (PPI).
