Dates and cities confirmed for LOTEX road shows

Brazilian government will hold a series of road shows later this month and the next in order to define in December the sale of the Exclusive Instant Lottery (LOTEX), now managed by Caixa. For this, there are already defined dates and places:

September 28: LONDON (during the afternoon)

September 29: LONDON (all day)

October 2: LAS VEGAS

October 3: LAS VEGAS

October 6: RIO DE JANEIRO

The Road Show is like a public hearing in which all interested companies can participate, in all designated locations. At these meetings, representatives and experts from BNDES and the Ministry of Finance announce the rights and obligations of the LOTEX concession and answer the doubts of companies that decide to participate in the Brazilian " raspadinha” (scratch card).

Different information indicates that market giants, such as IGT, Scientific Games and Pollard, would paticipate on these Road Shows. Intralot is another big company that was interested in LOTEX, in addition to India's Eagle Press, which at the moment is also considering taking part in some of the dates.

The instant lottery business, as defined by the WLA - World Lottery Association - consists in the use of pre-printed or terminal-generated tickets. In Brazil, the federal instant lottery service began in 1990 and was discontinued in 2015, but in three states, Rio de Janeiro, Minas Gerais and Piauí, this service is offered to the public.

The global instant lottery market is highly concentrated, with 80% of the revenue in the hands of three companies: Scientific Games, Pollard and IGT-GTech. The instant lottery business has the second largest share in the global lottery market, with 25.2%. However, the industry forecasts the highest growth for the next 5 years (2017-2021), with CAGR (compound annual growth rate) of 12% is projected.

In 2015, in Brazil, the lotteries business increased R$ 14.9 billion (USD 4.75 billion) with CAGR of 9% between 2012 and 2015. In 2014, before the interruption of the instant commercial lottery, the share of this segment was 1.5% of the total collected. In the same year, the two states that sold instant lottery earned approximately R$100 million (USD 32 million).

The BNDES published on Tuesday this week in the Federal Official Gazette (DOU) that those interested in LOTEX can send suggestions from until October 11 through the BNDES website. There will also be a public session to discuss the topic on September 26 in the city of Rio de Janeiro.

LOTEX's concession to the private sector is expected to take place at an auction later this year and is part of the federal government's collection effort, which estimates double taxation on bets after privatization. This volume of revenue could quickly jump from US$ 6 billion to at least US$ 12 billion, which may help strengthen the National Treasury's cash in the coming years, while public accounts are expected to remain in the red.

The BNDES is responsible for carrying out all the necessary acts for the privatization of LOTEX, with a concession term of 25 years. Public consultation documents can be accessed on the bank's website. The instant lottery business consists of the use of printed or virtual tickets generated on the basis of a previously established and known reward structure in which the bettor discovers that he has been the winner without reliance on any external event.

LOTEX was included in the National Privatization Program (PND) in January 2016. The revenue from the LOTEX concession is not provided for in this year's Budget. The auction will be in December, but settlement will not take place on the same day. "If, by chance, the auction revenue still enter the Budget this year, great, but the revenue is not in the Budget of 2017," commented secretary of Economic Monitoring of the Ministry of Finance, Mansueto Almeida, on Twitter.

Source: GMB