The company's control in Brazil was negotiated for about R$ 4.5 million (US$ 850k), still pending regulatory approval. The deal was signed through Saga Business & Gaming Intelligence, a Brazilian lottery gaming technology and management company, of which the executive is a majority shareholder. Saga BGI has already owned 20% of Intralot do Brasil shares since 2013 but has now taken advantage of Intralot Group's global divestment plan, which has been divesting operations in Latin America.
“It was a great opportunity. We had already made a large investment in technology and logistics aimed at this and hardly anyone would be able to make this acquisition the way we did, preserving Intralot's software," said Alvarenga to Pipeline. The executive, now 49, put his foot on the betting market even in adolescence - he started his career as a trader, at 17.
The group, founded in Greece in 1992, is present in more than 47 countries and is considered one of the main suppliers of technology and operational management for lottery games and sports betting. In Brazil, the company is the only private firm authorized today to operate lotteries. So far, the company only operates in Minas Gerais, where it operates by concession - the state lottery made a bid in 2010 and Intralot has a renewable contract until 2025.
The company found a very Minas Gerais way of running the business, which helped in the expansion. In addition to the physical units, the games are sold online and at neighborhood stores - such as Bar do Matuzinhos or 2 Conto bar or at Banca Três Irmãos. The name of the games also has a Minas Gerais twist, such as Totó Gol and Totó Lot.
The strategy of the company is to increase the recurrence of games and have options that involve groups of friends. In Speed Race, a virtual game that simulates car racing, bets go from the winner to the podium occupants with no order of arrival. In Keno Minas, the logic is similar to the Mega-Sena - but instead of one draw per week, they are drawn every four minutes.
"We are in just over 500 municipalities in Minas Gerais, with 3 thousand points of sale. Caixa Econômica may have a maximum of 15 thousand points in the entire country (in the federal lottery), with the island of Manhattan alone having 50 thousand legal points of sale," compares Alvarenga.
In the country, discussions about games tend to come up against debates about the state's responsibility for this expenditure of families' income and even in the creation of a cultural habit. But there has been a recent regulatory breakthrough - which takes Alvarenga's plans beyond the mountains of Minas Gerais.
Saga's investment is part of the strategic vision of expanding the operation to other states, following the decision of the Federal Supreme Court at the end of last year, which regulated state tenders, breaking the Union's monopoly - allowing states that already have their lotteries to maintain the operation and to those who do not have it, the creation of concessions. After the STF release, the federal entities began to see in the operation of state lotteries a source of income in the midst of the fiscal crisis.
To give a dimension of the market, Caixa's lotteries raised R$ 17.1 billion (US$ 3.25b) in bets in 2020. “The states all started running out of time to take advantage of this opportunity and Intralot has already been talking to these players. It has the know-how of an extremely complex operation, which involves face-to-face bets, in physical units, and also online, which has the whole issue of security,” says Leonardo Guimarães, partner at GVM Advogados, legal advisor in the transaction with the head office.
Intralot is already qualified in PMIs (procedures for expressing interest in the market) for states such as Maranhão, Distrito Federal, in addition, of course, Minas Gerais - for new operations or when their concession expires. “Regulations for online sports betting, Health and Tourism Lotteries are in progress, as a way to temporarily increase resources. Our client takes the lead to explore these verticals as well,” says Helder Fonseca, a specialist in M&A and corporate law at GVM.
Source: Pipeline
