LOTERJ welcomed investors but defended state lotteries

Representatives of the Caixa warn on the need to publicize the private meetings, in order to avoid any distinction between the participants.

Roberto Brasil Fernandes requested correction to the process, as he says it will damage the state lotteries, which are important for regional development. "LOTEX is an important product for the gaming market in Brazil. It is an ‘instant lottery’ that will be explored throughout the country, just as Rio de Janeiro has been exploring the raspadinha for more than 40 years. LOTEX is from the Federal Government and raspadinha is from Rio de Janeiro. In the same way and supported by the decisions of the STF, the other State Lotteries can - and should - include this product in their state portfolio. The issue of monopoly is judicialized in the Supreme Court," said the lawyer.

Sérgio Almeida spoke on behalf of Loterj about the privatization process because the Union would not have a monopoly over lotteries, and the states will fight in the Supreme Court to guarantee the operations. He also warned investors on this topic. "I have nothing against Lotex, I think it's good that the federal government is doing the bidding, but it can not interfere with the states," Almeida said.

There is disagreement with the state lotteries, which defend the absence of monopoly for the exploration of lotteries, according to the taxative art. 177 of the Federal Constitution of 1988, not being received the limitations previously imposed to the States for not being able to be submitted to different treatment the natural evolutions in search of greater efficiency and transparency recognized to the federal lottery. The absence of monopoly, based on the studies, has a direct impact on the valuation of the asset, involves one of the assumptions used by the bank to define the value of the business: exclusivity in the offer of instant lotteries.

"Brazil has taken another important step towards increasing free competition in the Lotteries sector, and we have fulfilled our role of alerting the non-monopoly of the Union and welcoming the interested international investors,” said VP of the State Lottery of Rio de Janeiro, Paulo Horn.

The issue is already in the STF. Piauí presented in May an action for the court to express its views on the matter and the State of Rio de Janeiro requested to join the ADPF and other states should follow the same path. The Loterj president says that in recent months, states have been warned by the federal government that they will have to suspend the offer of instant lotteries.

"It's obvious that the federal government wants to eliminate competition with the states to sell the business exclusively," he claims. "And they're doing it without discussion, because they're in need of money."

In Rio, the sale of scratch cards moves, on average, R$ 200 million per year. Almeida argues that 10% of this total goes to welfare institutions, which have already been suffering from the state's financial crisis.

The BNDES alleges that in the binding precedent number 2, of 2007, the STF had already positioned itself for the unconstitutionality of the state laws on the subject, but the States affirm to follow the same modality explored by the Federal Lottery.

Of the total revenue, 65% will have to be destined to the payment of the prizes. Another 16.7% will be passed on to the government. The concessionaire will be entitled to 15.7% to cover costs and recover the investment in 25 years.

Source: GMB