The Court of Auditors had already identified irregularities in the contract, and it had been suspended.
In the document, the Director of Investor Relations, Dario Oswaldo Garcia Junior, and the Investor Relations Manager, Amaro Moraes Patrício, state that the bank has not given up on the lottery business and will seek a new partner. "BRB will assess new strategic alternatives for the implementation of BRB Lotteries and will keep its shareholders and the market duly informed about the developments mentioned in this Relevant Fact."
Interested parties must meet BRB's requirements, such as being a member of the World Lottery Association (WLA), having experience operating in more than one country and in different types of games, and having their headquarters in Brazil or having a Brazilian associate.
"The partner selection process goes back to previous stages, where we will send new invitation letters to WLA members. We will once again provide presentations about the business plan, game types, and request that they submit proposals. From there, we will choose a new partner," said Paulo Henrique Costa, BRB's president to Metrópoles.
The public lottery service in the capital of the country was approved by the Legislative Chamber of the Federal District (CLDF) in May 2022, after the Supreme Federal Court ruled that the states could engage in this type of business. The responsibility for operational activities related to the operation of games was given to BRB.
The president of BRB stated that he estimates that in 10 years, the Federal District Lotteries will allocate R$ 2 billion (US$ 400m) for social causes defined by law, such as funding education and sports.
The agreement between BRB and Santa Casa de Lisboa was signed in March 2023. However, the deal raised serious suspicions of irregularities on the part of the Federal District Court of Auditors (TCDF), which ordered the operation to be halted. The partnership with the Portuguese organization was also rejected by regulatory authorities, indicating serious inconsistencies in the proposal.
In Portugal, the matter raises concern for the new management of Santa Casa, which ordered a comprehensive audit of all the business the entity has in Brazil.
Banco de Brasília had announced the creation of BRB Loterias, in which it would hold 50.1% of the capital and Santa Casa de Lisboa would hold 49.9%. BRB was so confident in the business that it reported the R$ 77.3 million (US$ 15.5m) as realized revenue in the first-quarter balance, even though the money was expected to come in over the course of years.
Upon identifying this operation, the Central Bank ordered BRB to remove it from its statements. In the same inspection, the Central Bank found a total of R$ 321 million (US$ 65m) in discrepancies in BRB's balance sheet, which will need to adjust all its accounts.
Source: GMB
