GMB - Tell us a little about the most important issues you addressed during your speeches at the Juegos Miami...
Alexandre Manoel - I had the opportunity to share with the audience present in Juegos Miami the current reality of Brazilian lottery regulation, in two different moments: in the first, I participated in the opening of the event, in the panel called "Regulatory News" to respond to questions about the current stage of the LOTEX concession process, our expectations regarding the regulation of sports betting and the current situation of the Brazilian regulatory framework of the gambling market.
In a second moment, I made a presentation on the changes that are taking place in the Brazilian regulatory framework of lotteries. In these, I highlighted the opening of the domestic lottery market and the convergence of lottery rules in Brazil to the best international practices, through the realignment of the payout rates of federal lotteries, and the standardization of the calculation base, consolidating 15 legislations in only one, allowing greater accountability for the sector.
By the way, this will hamper the payout changes, because, as a result of the unification of the legislation of distribution of the lottery resources, there will be greater clarity for the fact that, by reducing the payout, everyone loses. If they want to reduce the portion distributed to one beneficiary, they will have to legitimately withdraw from another in the budget process, within the National Congress. I also discussed LOTEX as the Public Security Lottery, since it will have as a legal beneficiary basically public security, as in the case of American state lotteries.
Today, it is public safety because this is the highest priority in Brazil, where the state public security system does not have a source of funds for investment, which is predictable, continuous and planned, so that it can know how much it will receive each year from to make workable plan in the current financial year and in subsequent ones. In the future, you can choose another area, like education, as is common in the USA.
During the Brazilian round table, what were the most asked questions?
As for what the General Coordinator of Prizes and Drawings Governance, Waldir Marques Júnior told me, the main questions were focused on the LOTEX concession process. However, as was to be expected, questions also arose about the bills dealing with betting games that are dealt with in the two Legislative Houses, which allowed him to rethink the total autonomy of the actions of the Legislative Power; in fact, the Executive Branch will only pronounce when it is requested. Finally, he told me that questions had arisen regarding the resumption of sports betting studies.
What did you notice in the market in relation to the expectations that the sector always has for Brazil?
I believe that the market is always very receptive to modernization initiatives in the lottery industry, such as the ones we are doing in regulating this activity in Brazil. I realize that everyone remains very attentive to the actions that will result in the opening of the lottery market, with the LOTEX concession. In this case, I have always tried to mention that the future concessionaire of LOTEX will have a great opportunity to show for Brazilian society, especially for the median voter, who is a very low income person that will never traveled abroad, that the gambling market, including the lottery sector, is a serious market with high compliance, governance and ethics.
In fact, I believe that with the installation of a large multinational of this sector in Brazil, which should occur with LOTEX, the chances of society and, mainly, Brazilian institutions improving their perspectives regarding our sector are huge. LOTEX can provide not only the opening of the lottery market, but also the betting market. Anyway, I believe that the good performance and the responsible image of the future concessionaire can contribute a lot to the regulation of the market of gaming in Brazil.
One of the main topics of Juegos Miami was sports betting due to the recent decision of the US Supreme Court. The Ministry of Finance and especially SEFEL are moving forward with a sports betting project for Brazil?
This is an issue that was already under study in the Ministry of Finance, but was still in a very incipient state to be feasible. In fact, when I and Mansueto Almeida arrived at Sefel, there was a Bill ready to be sent to the National Congress. I even went so far as to publicly announce that it would be sent. It turns out that, after studying in a deeper way, we can elucidate that the modeling had been structured in the same bases of LOTEX, considering the concession of the service to a single company.
However, we already understood that sports betting, at least online, should be implemented in a market closer to that of the Perfect Competition, which would lead to the concession of this service to many companies, perhaps dozens of them. Therefore, we believe that this bill would need to be reviewed, considering also the need to strengthen the regulatory structure for an activity that tends to be operationalized throughout the national territory (by dozens of companies) and with a high degree of technology applied in this operation.
What is your assessment of Clarion's work in Juegos Miami organization?
Clarion events are part of the worldwide lottery regulation calendar. Like the ICE in London and the Brazilian Gaming Congress, the Juegos Miami is promoted with great professionalism and excellence, allowing effective exchange of best practices, technical sessions, identification of new opportunities for innovation and high qualification networking.
Seeing the seriousness of the regulators and the importance of the market, do you believe that Brazil continues to lose chances of raising good tax money by prohibited gambling?
Here it is important to point out the great difference between the lotteries sector and other forms of betting games. In lotteries, precisely because of the distribution of the collection to the social beneficiaries, the portion destined to the government is high, making this a true partner of the operator. In betting games, it is clear that the payout should be much larger than the lottery, which results in a small portion to be collected directly by the government. Thus, I have watched, with caution, the various exorbitant estimates of the collection of the other games with bets that are divulged by the journalistic articles.
I believe that this reality can only be better qualified from a serious, methodologically valid work that points out that the gains of government and society will come much more for the investments to be made by the operators, for the jobs to be generated and for the effect the dynamics of these ventures in the national economy, mainly through the better structuring and linking of the national tourism sector. Finally, in the gaming sector, if there is leverage of taxes, this occurs indirectly through more employment and income, and not directly, as occurs in the lottery industry.
As current Secretary of Lotteries, do you have a formed opinion about the legalization of the gaming activity in Brazil?
As I mentioned in other parts of this interview, I understand that the matter needs to be deepened, and so far there has not been any position by the Executive on the subject.
Did you receive many questions about Lotex? What are the main doubts?
During the month of May, there was an intense exchange of questions and answers with potential investors. All of them were received and discussed, both in the sphere of the BNDES and contracted consortium, and here, in the Granting Authority. The main doubts were focused on clarification of the details of the bidding document and the draft of the concession agreement. By the way, questions and answers are available for consultation in the Data Room of the concession process, on the BNDES website.
Still about Lotex, it was learned that the deadlines were extended and the date of the auction changed to July. Can you explain the reasons?
The decision to change the deadlines was taken by the bidding committee of the concession process, which has full autonomy to conduct the process, in the face of supervening events, which were argued by bidders and which culminated in the decision adopted. Basically, some stakeholders stressed the tight deadline for getting the necessary documentation to qualify for the auction. The committee found it convenient to extend the deadline by 15 days, giving isonomy to all potential participants.
To date, we do not know your position on the subject of capitalization bonds and the clash of interest with Lotex. Do you think it complicates the process?
I believe they are very different practices and do not complicate the process. Lottery, by no means, is confused with Capitalization Bonds. What we have verified is that the regulatory practices, both lotteries and Capitalization Bonds, which are underway in the Ministry of Finance, together with the distinct natures of these products, completely remove any possible shadowing of economic activities. Anyway, together with SUSEP, we will clarify this to the market, in the coming weeks.
Source: Exclusive GMB
