LOTEX: Brazilian Government would grant 30-year concession term

The team of the Brazilian Finance Minister, Henrique Meirelles, will auction the lottery to be administered via a concession for a period of 30 years. Until last month the estimate was that the Lotex concession could raise US$ 1.25 billion, a value now revised to US$ 317 - US$ 635 million.

Leading international Lottery firms are expected to compete for the LOTEX tender, which may clear the path towards a federal licensed Brazilian gambling framework. The ‘Big 3’ lottery operators IGT, Scientific Games and Intralot, are reported to be eyeing up bids, in what may become a hotly contested Lotex tender.

Government expects 58 privatizations to take place. List includes airports and highways and estimates US$ 14 billion in investments, and half of this amount should enter during the first five years.

In addition to the privatization of Eletrobras, the bidding list of 11 blocks of power transmission lines, port terminals, highways, airports, sale or extinction of other public companies, such as Casa da Moeda, Empresas Docas do Espírito Santo and Maranhão, Casemg and CeasaMinas and the beginning of studies for the concession of the Rio Olympic Park.

The Lotex concession process is also significant as a potential starting point for the development of a Brazilian gambling market currently atrophied and limited to traditional lottery games and bets on horse racing.

Lotex was created through Provisional Measure 671/2015, known as the MP of Football, which dealt with the refinancing of fiscal and labor debts of football clubs. After being approved by the National Congress, the proposal was sanctioned by President Dilma Rousseff. The privatization officialization of Lotex was announced by the Temer government in September last year at the first meeting of the Investment Partnerships Program (PPI), created to make concessions and privatizations viable.

Source: GMB / O Globo