The Brazilian lottery network is one of the largest in the world – the largest, according to the president of Febralot, Jodismar Amaro, and comprises around 13,000 Caixa Econômica Federal lottery points of sale.
In addition to selling lotteries, the network provides the population with all government social benefits and covers more than 99% of the national territory, including indigenous and riverside communities.
With such capillarity, Febralot positions itself as an important national player in the operation of lottery products and is currently restricted to games offered by Caixa and only in physical stores.
To talk about this, GMB exclusively talked with Jodismar Amaro.
GMB - First of all, we would like you to tell us how the lottery market performed in 2022.
Jodismar Amaro - The Brazilian market for lotteries linked to Caixa Econômica Federal grew by approximately 25%. Overall, it was good, but we were dependent on large rollovers, an exceptional Mega-Sena and the increase in online games, which causes us some concern as we are outside this market.
What is the current lottery network size and coverage in Brazil?
I believe it is the largest service provider network in the world. We operate with approximately 13 thousand physical points, covering more than 99% of the national territory. We are in all regions of Brazil and serving [including] indian villages and riverside populations. All social services are provided by the lottery network.
In other words, in addition to selling lottery products, you have a social role as Caixa, through you, provides a series of services provided precisely by the lottery network.
We serve the entire population, especially the unbanked, who do not have access to the internet or conventional banks. This portion of the population is served throughout Brazil by the lottery network and we are very proud to provide this social service.
Febralot already held a meeting with Caixa this year. What are your goals for 2023 and what demands were made?
We have some priorities, including increasing the value of bets, since lotteries have been without an increase for 4 years and a replacement is necessary. Maybe we won't be able to increase all of them, but the Federation and Caixa are aiming to readjust Lotofácil and Quina. We also have the inclusion of the online lottery network. This needs to be done anyway. No one escapes progress. We need to include the network in the virtual world in a cautious and progressive way, so that it doesn't cause trauma and that online is added to the services we already have today.
In addition, we signed our commitment to the network to bring legal stability through PEC 43 (proposal that extends the validity period of lottery agents' contracts with Caixa), which is in the Senate and tries to offer peace and tranquility to the category with the change in the Constitution. That is our biggest goal this year.
There is a great growth in the online offer of lottery products competing with the official Caixa network. How do you see this and do we already know the chain's intention to enter this market?
I cannot see other games in Brazil without the participation of the lottery network. Any attempt in the market to implement physical games without the participation of the already structured lottery network, I believe, will be a failure. We also intend to get into online gaming and participate in sports betting, Lotex and what to show. We will fight for the network to be included. But in physical games, mainly, I don't see conditions for the market to work without the participation of the lottery network.
Is Caixa already aware of your demand and looking for solutions?
We have frequent meetings with Caixa and this is one of the main topics. According to Caixa, it is negotiating with state governments that intend to implement their lotteries. It is still an embryonic project, but we need to prepare for the future. And sports betting is very interesting for us, and Caixa should try to establish a partnership in the market. This is the information we have. We are not participating in this interaction yet, but we have information from Caixa that they are working on the project.
Regarding the offer of online lotteries, establishing a site for the sale of lottery products is not at all difficult, but how can lottery retailers, especially the smaller ones, adapt to this new reality?
First, as I said before, it has to be progressive. Our network is old and most of it is not used to online operations. So I see it with the gradual entry, with a lot of training and a lot of advertising. Caixa needs to invest a lot in marketing, training and provide a system, especially for the small ones.
What is your assessment of the end of Caixa's monopoly on operating lotteries? How do you see the opening of new state lotteries?
I'm an optimist by nature, so any new project pleases me as long as it's worked and polished involving the network. I am in favor of state lotteries in a joint effort between Caixa and the states. If this work does not exist, the state's physical network will not prosper. Our network of 13,000 points is structured and has the know-how to start working and producing the next day.
Even in relation to sports betting, as you mentioned earlier?
Also. We are very interested in this operation.
From a legal point of view, these bets are only offered online and by websites hosted abroad. Do you believe that in the future the network will also be able to offer bets in physical stores and not just on the internet?
I believe so. For me, the physical channel never dies. It is necessary to work in a hybrid way, connected to online. This contact that the population has with the lottery outlets will not diminish or end. I understand that we will achieve this agreement and the network will work physically with sports betting, in addition to online.
As you said, you are an optimist. Do you expect the regulation and the process of integrating the network into this new market soon?
I believe that the regulation will come out in April through a Provisional Measure. We are preparing ourselves with special assistance to insert the lottery network in this context. In addition to Caixa's work, there is another one being carried out by the Federation. I still can't give many details as it is a matter that is of direct interest to the Federation and the network.
It is an important step towards increasing the network's profitability and further disseminating the work you develop!
Profitability is a key factor, especially online. With the pandemic, we lost many punters and many non-gaming customers. We need to bring them back, as well as the new generation, adept at the internet, into online stores. We will work hard in this direction.
And also wait for the legalization of other modalities, such as casinos and jogo do bicho. Does jogo do bicho compete a lot with official products?
Unofficially, we have information that they are very strong. It is estimated that the jog do bicho earns half of Caixa's revenue, but it is around R$ 10 billion (US$ 2b) per year.
That is, if the lottery houses can also offer the jogo do bicho, it will be another point of growth for the network.
The lottery cannot survive on a single product. We need to bring various modalities and types of services that fill the space that is open. Brazil is very big and there is no product that covers everyone. We have to work with a very wide range so that the network benefits as a whole.
And in tune with Caixa!
Always. That's the solution. We have a contract and we are permissionaires. We can't get away from it. The partnership with Caixa needs to be strengthened and improved. We expect it to do its part, especially with regards to improvements in the technology area.
Source: Exclusive GMB
