The purpose of the Public Hearing at the Finance and Taxation Commission, requested by Federal Deputy Júlio César (PSD-PI), was to discuss Bill 472/2007, which authorizes States and the Federal District to explore lotteries in Brazil. As the STF ended the Union's monopoly on the exploration of the activity and some states are moving towards creating their own lotteries, the focus was an update on the activity in the country.
The central topic ended up turning to the importance of the lottery network, as well as the continuity of the commitment that any lotteries maintain for social investment and the generation of employment and income.
The presidency of the session was in charge of Federal Deputy Fábio Mitidieri (PSD-SE), rapporteur of Bill 472/2007, who admitted the lack of interest of Caixa Econômica Federal in participating in the meeting. In addition, he said he hoped "that the existing lottery network can be authorized to sell state lottery products."
Maria das Graças Vasconcelos Cavalcanti, Northeast Regional Director of the Lottery Entrepreneurs Association, presented a history of lotteries in Brazil, dating back to 1784 and which culminated, in 1962, with the creation of the Federal Lottery, precisely on the date of the public hearing, on September 15th.
According to her, "now, this House must take care of a governance model with guidelines at the federal level so that the original purpose of this achievement by the states is not lost, with payout standardization that will ensure competitive balance."
In her assessment, there is a lot of credibility regarding the lotteries operated by CEF, while she highlighted "the credibility recognized by Brazilian society and the importance of the lottery network in the country, comprising 13 thousand points distributed in 97% of Brazilian municipalities, still operating as a source of payment for social programs and a banking agent for the needy and unbanked population.”
At the end of her presentation, the director attested to the importance of maintaining the focus of lotteries in social actions and highlighted that "the lottery network is a strategic channel to act in the state lotteries segment."
Marco Antônio Queiroz, State Secretary of Finance of Sergipe, commented that he sought out his colleagues from other states to be able to draw an overview of the current stage of mobilization in favor of the creation of state lotteries and brought interesting data about the sector in Brazil from a study prepared by Price Waterhouse (PwC) for the government of Sergipe.
Among other things, the study showed the strength of the sector in the country, with the federal lotteries operated by CEF having raised R$17 billion (US$ 3.35b) in bets in 2020.
For him, these numbers are expressive, but could be much higher based on an analysis of the PwC study. “Lottery products around the world are very similar, but the per capita collection in Brazil is significantly lower compared to other countries. In Brazil it is around US$ 18, while it reaches US$ 400 per year in some countries,” he pointed out.
Another data highlighted by Queiroz is the apparent growth in recent years of the digital channel, although he admits that "the distribution in physical points is still fundamental for the success of the lottery." According to the study, in 2019, 95% of the collection came from distribution in the physical environment and 5% online.
His association colleague and Southeast Regional Director, Bruno Lobato, reinforced the network's performance and highlighted that “the lottery place is in the lottery house.” For him, the creation of state lotteries is subject to the regulation of the Union as to the products to be made available and, and also welcomes art. 2 of Bill 472/07 that determines that state lotteries will be subject to prior authorization by CEF. “This is important because we cannot have a cannibalization of state lotteries with the Federal Lottery. We are aware of the expectation of success of state lotteries, but we cannot reduce the collection of our federal lotteries,” he defended.
Lobato highlighted that one of the reasons for the per capita collection to be one of the lowest in the world is the payout. “In Brazil it is at 31%, which drives away players. When we talk about a prize of R$ 30 million (US$ 5.75m) from Mega-Sena, it means that there was a collection of R$ 100 million (US$ 100m) and the transfers and taxes were discounted.”
According to him, another important issue that makes the game sell is receiving the prize. “To receive amounts above R$1,900 (US$ 363), the player must go to Loterj's headquarters, in Rio de Janeiro, or at Lotece, in Fortaleza. The lottery network is able to make payments to make life easier for customers. We can't have a player traveling hundreds of kilometers, depending on the state, to receive his prize,” he said.
For Lobato, the lottery network must be enabled to sell state lottery products, to give greater reach to the business and expand revenue from the states. “In Rio de Janeiro, for example, Loterj's main points of sale are newsstands, which do not have the professional qualifications of the national lottery network.”
"More lotteries will bring greater profitability and revenue," he added.
Marcel Rabello, lawyer of the Brazilian Association of State Lotteries – ABLE, highlighted the decision of the STF, which gave autonomy to the States to operate lottery modalities, “which was an important legal milestone for the advancement of the theme of state lotteries.”
In his assessment, almost all states are moving to implement lottery services, "which will generate not only a large income for each state, but also a reduction in the evasion of currency with betting on foreign sites, reduction of informal and illegal gambling, as well as the generation of direct and indirect jobs. The lottery industry is a strong generator of jobs and income.”
Marcel Rabello said ABLE has no objection to the federal lottery network selling state lottery products. “It is a network of great importance for the country as a whole. The states will create their own points of sale, but it would be an important partnership, which will be up to CEF whether or not to allow its dealers to sell local lottery products.”
This decision would be of great value in favor of lottery companies, according to Rabello. “We understand that there would not be unfair competition between the products. There is a market for both the state and the federal ones. There is an underutilization of the lottery market and it can grow a lot with the lotteries to be created,” he said.
As the STF decided to end the monopoly on the exploitation of lotteries by the Union, with the states operating their own modalities in the same models as the federal ones, the leader defends that “a substitute or amendment be prepared to remove the requirement of prior authorization from the CEF for lottery products, since the STF has already determined that state lotteries stick to products similar to those of the Union.”
Among some manifestations of deputies, attention was drawn to the intervention of Enio Verri (PT-PR), who went further and defended the sale of state lotteries outside its borders. “A citizen of the Federal District wants to play a lottery in Ceará, he can play. There are no reasons to limit. In the quest for increased revenue, it increases the revenue capacity,” he said.
Source: GMB
