QUA 19 DE SETEMBRO DE 2018 - 03:05hs.
Brazilian Instant Lottery

Lotex privatization process included in tomorrow’s plenary agenda for voting

After several months of analysis of the minister Aroldo Cedraz, the Federal Audit Court (TCU) decided to include on Wednesday's plenary session agenda, at 2.30 pm, under 'Continuation of Voting' the process of Privatization of LOTEX (Exclusive Instant Lottery public service). In case of approval, it could move forward to the publishing phase of the bids that is scheduled for the first quarter of the year.

Currently, the project is being analyzed by the Federal Audit Court (TCU). National Development Bank (BNDES) completed the studies in August 2017. On September 12, 2017, it was published the decree that grants powers to execute the hiring process to BNDES.

The public consultation phase began on September 12, 2017 with the publication of the Notice of Audience and Public Consultation BNDES No. 01/2017 and was completed on October 11, 2017.

Popularly known as “raspadinha” (authorized by Law 13.155, August 4, 2015, Article 28), the Exclusive Instant Lottery (LOTEX) is a lottery mode in which the bettor knows, when he scratches the card, whether he won a prize or not.

Through the results of studies carried out by the National Development Bank (BNDES), the concession was defined as the form of privatization to be used for this project - a model that presents greater attractiveness to the investor and a better financial return to the government.

Today, in Brazil there are three federal types of lottery:

a) lottery (Mega-Sena, Lotofácil, Lotomania, Double-Seine, Timemania and Quina);

b) of numbers (Federal Lottery);

c) sports prognostics (Loteca and Lotogol).

Throughout 2016, the Federal Government raised approximately US$3.9 billion with all these lotteries. In the same period, social transfers totaled just over US$1.85 billion.

The LOTEX concession, according to studies by the Secretariat of Economic Monitoring of the Ministry of Finance (SEAE), will result in increased competition, modernization and growth of the lottery market in Brazil. Lottery participation in the Brazilian economy today oscillates around of 0.21% of GDP.

The main positive impacts expected from the project are the great potential for collection, the granting of the right to operate LOTEX, the generation of employment and income for the population, and the financing of social causes.

The studies conducted by the BNDES point to the possibility of a total collection, by the concessionaire, in the order of US$1.85 billion already from the fifth year of operation of the service. Of this total, 16.7% will be allocated to social transfers and 2.6% will be related to tax collection.

The government’s bodies involved in the concession process are the Ministry of Finance, the granting authority and responsible for regulating the sector, and the BNDES, responsible for preparing the studies and executing the bidding process for the concession. The concession period was defined by the Ministry of Finance in 15 years and the studies conducted by the BNDES defined a minimum grant value of US$167 million.

It is possible to point out as factors of attractiveness to potential investors:

a) the 65% payout, which stimulates demand for the product;

b) the legal framework, which guarantees the legal security of the concession;

c) the term of 15 years, which ensures the return of the investments of the private partner;

d) the potential to be explored for the instant lottery service in Brazil.

Source: GMB