QUI 22 DE JUNHO DE 2017 - 17:41hs.
PEDRO TRENGROUSE, ATTORNEY AND PROFESSOR OF FGV

Brazil is far from its lottery collection potential

Pedro Trengrouse, a professor at the Getúlio Vargas Foundation, wrote an Opinion column in the newspaper O Globo. In his article, he says that there are three measures that can significantly improve the outcome of lotteries in Brazil: more points of sale (today there are less than 14,000 stores), rebalancing the pay out (the portion of the collection destined to the prizes is very low, 31%) and new products.

The collection of the lotteries of the state-owned government bank Caixa grew 22.4% in the last five years, summit in 2015, US$ 4.55 billion. Nevertheless, it fell 13.9% in 2016, to US$ 3.90 billion. It's worrying; 48% of the collection is destined to social transfers, and several activities depend exclusively on these resources.

In 2016, US$ 1.86 billion was distributed to the National Treasury Secretariat, Student Funding Fund, National Culture Fund, National Penitentiary Fund, National Health Fund, Brazilian Red Cross, National Federation of Parents' Associations and Friends of Exceptional Members, Ministry of Sport, Brazilian Olympic Committee (COB), Brazilian Paralympic Committee (CPB), Brazilian Club Committee (CBC), National Confederation of Clubs ( Fenaclubes) and football clubs.

Since 2001, the Brazilian sport has received more than US$ 2.44 billion from the lotteries.

Brazil is far from its potential. Lottery revenues in Italy reach US $ 34 billion per year with per capita sales of US$ 565; France, US$ 16 billion, US$ 249 per capita; United States, only in New York, US$ 9 billion, US$ 456 per capita. Brazil is no more than US$ 4 billion, with per capita sales of US$ 18.53, behind of Portugal, US$ 228; Uruguay, US$ 40 and Argentina, US$ 36.

There are three measures that can significantly improve the outcome of lotteries in Brazil: more points of sale, rebalancing of the pay out ( portion of the collection for the prizes) and new products.

There are less than 14,000 lottery stores in the country, which is very little. One for every 16,000 Brazilians. And, in addition to lotteries, they still offer banking services. Can you imagine the queue if every Brazilian decides to bet? Would not it be the case to increase the number of outlets with the direct involvement of beneficiaries and online offer?

In Brazil, the pay out is very low, 31%. The world average is over 50%. In the United States, in Massachusetts, for example, the payout of the instant lottery rose from 50% to 80.7%. Sales jumped from US$ 50 million to over US$ 3 billion a year. Would not it be appropriate to review taxation, costs and percentage of social transfers to increase the pay out of lotteries in Brazil?

Currently, the law allows Caixa nine lottery products. Only three, Mega-Sena, Lotofácil and Quina, concentrate 90% of the collection and 80% of the bets. Would not it be time to modernize the portfolio, including, for example, sports betting, which already moves in the country more than US$ 3 billion per year, without any regulation?

Lottery is voluntary tax. At a time when the goal is to balance public finances and resume economic growth, it is important that the government becomes more efficient, Congress improves the regulatory framework and beneficiaries also collaborate to increase the performance of lotteries in Brazil.

Source: GMB / O Globo