“IGT could provide entertaining and compelling solutions that can help Brazil grow”

GMB - Is IGT interested on the future exploitation rights of the Brazilian scratch-card game known as " raspadinha”?
Walter Bugno - As the world’s largest end-to-end gaming company, IGT is closely following the gaming legalization process in Brazil. We recognize that among the G20 countries, Brazil is one of the most important and biggest in terms of market potential. As a result, IGT is interested in this first privatization process, although we have not yet reached a final decision to participate in the tender; we’ll be in a better position to decide once the conditions and parameters are made clear. Since this will be an entirely new business for Brazil, we hope that the Ministry of Finance will set these conditions according to best practices and international benchmarks for similar privatizations.

Are you following the bidding process? Do you consider it is on time or moving forward a little slowly? 
Yes, we are following the Lotex process, in addition to the gaming legalization process. There’s no universal standard against which we can judge the pace; each country has its own priorities and sets its legislative agenda according to its government’s strategic path.

In what other parts of the world does IGT run a similar lottery product? Which ones and where?
Thanks to the trust our lottery customers and their governments have placed in us around the world, we have a strong track record of transforming instant programs to deliver responsible growth to good causes across different business models.

In total, we have three main business models that we adapt according to customer needs:

A) Concessions or Lottery Management Agreement model, also known as the operator model, where we run 100 percent of the activities;

B) Facilities Management Contract (FMC) model, where we provide some services to the customer (a customer can be either the lottery authority or the operator). These services can include, for example, technology, printing, marketing, and field services;

C) Product sales, where we sell turnkey technology or printed services directly to the customer.

We understand that Lotex will run as an operator model. This is similar to the model we operate in Italy under the Lottomatica brand, called Gratta e Vinci. It’s the biggest single instant lottery in the world, and had €8.9 billion in sales last year.

As an example of the Product Sales model, IGT provides 100 percent of all printed tickets, in addition to marketing-related services, insights, and analytics to the Instant Lottery of Santa Casa da Misericordia de Lisboa in Portugal.

What attracts you most to the Brazilian market? 
Our analysis shows that the Brazilian market has great potential. Through extensive research, we have found that Brazilian players are similar to Italian and Spanish players, as well as Latin American players in general. We see an opportunity to combine our expertise from similar markets with our research of Brazilian players to provide entertaining and compelling solutions that can help Brazil grow its new programs.

How do you think the lottery sales process could be improved in Brazil? (new technologies, online channels, etc.)
IGT is the world’s largest lottery operator based on total wagers, and has more than three decades of experience as a trusted growth partner to the most successful lotteries around the world. To support this exciting new market in Brazil, we plan to apply the best practices we’ve developed based on our experience as both an operator and supplier, while tailoring those solutions to local players’ preferences.

Strategically, can entering the lottery market be a first step to be settled in Brazil in face of a possible legalization of the gaming industry?
Being ready to deploy when the legalization process is finalized will be very important. However, we don’t see investment in Lotex as a way to gain a future advantage in any other verticals. For us, each business must be profitable in of itself. This is why the parameters and conditions that the Ministry of Finance will set for Lotex are extremely important, and we hope they will be set in accordance with the financial health of the market and the stakeholders. To be successful, Lotex requires a clear legal framework, a clear set of requirements for participation in the tender, and an entry price that must take into account that it’s a startup, rather than a mature business being privatized.