GMB - What are your goals in running for president of Febralot?
Ricardo Amado Costa - The lottery network is currently experiencing a lot of doubt and insecurity. We have never been in such a complicated situation. The Caixa monopoly no longer exists, and it has not shown agility to compete in a highly competitive market. My main goal is to restore the lottery network to its position as the largest and most qualified network for selling games and lotteries in the country. Additionally, we want to lead in service provision since half of the lottery network fundamentally depends on what we call non-gaming services.
We will bring Febralot closer to lottery entrepreneurs, as there is an urgent need for lottery companies to have more forceful and effective actions. My 40 years in the lottery business qualify me for this great challenge. I have reflected a lot on what I know closely, and this motivated me to run in the most important election in Febralot's history, as the next four years will be decisive for the better or worse for lottery entrepreneurs. I propose to reinvent the federation with the responsibility and vigor needed to get us out of the chaotic situation we are in.
Everything in life can improve, and Febralot certainly will. The challenge is great and motivates me to fight alongside my colleagues to reverse the concerning situation of the lottery network with a lot of work, democracy, unity, and especially dedication.
The current Brazilian model is outdated, and the lottery network has not modernized, losing ground to the online world. How do you plan to review the entire lottery ecosystem in the country?
In fact, it is Caixa that has not modernized. We risk becoming like a typing school or a video rental store in the future. The challenges are many, but we will not let that happen. On May 20th, Caixa launched its marketing place platform, although this divided opinions within the lottery network, with many entrepreneurs opposed. I am convinced that this alone is insufficient. I presented Caixa with my own project called Lotérica Tem, which advocates for the full digital inclusion of the lottery network and its employees for direct betting sales to consumers and business as well.
We have the potential to significantly boost Caixa Lotteries' revenue and create a robust credit concession platform. My project includes a product marketplace. We want to sell refrigerators, motorcycles, wardrobes, and everything else, and be compensated for the credit concession and sales. We have a workforce of 80,000 people that can easily grow to 200,000.
The president of Caixa constantly talks about transforming Caixa into a digital bank, citing Nubank with an equal number of customers, for example, to demonstrate the power of digitization. However, he ignores the need for the lottery network to fully enter this market.
Is it possible to strengthen physical stores for lottery offerings in an increasingly digital world?
We need to reinvent ourselves with service opportunities that require a physical network with the fabulous capillarity we have. It's not easy, but we must find ways. The opportunities exist, but they always face inadequate remuneration that Caixa generally proposes. We need to break this fatal cycle for our activity.
Consider this: Caixa has the perfect business model because when an individual buys a lottery outlet, they purchase the CNPJ (Company Registration Number). However, due to the absurd economic-financial imbalance of half the network, that individual will go bankrupt in two years (for example), then another individual will go bankrupt, and statistically, the network size does not change. In other words, everything appears fine statistically, and the sector's bankruptcy is not visible. Today, one-third of the lottery network is completely unprofitable, and our real size today would be at most 8,000 physical stores.
How do you compete with online companies that dump their games on the lottery network? Have they become "representatives" of lottery outlets?
Lottery entrepreneurs are not afraid of competition. Unfortunately, we are behind in the online market, and this needs to be overcome as soon as possible. We must have the freedom to innovate and compete, and I have no doubt that the betting public will choose the best commercial and economic option.
Is it time for Caixa Lotteries to modernize their products? Some modalities are known to be not very profitable. Which ones, in your opinion, should be discontinued?
Caixa does not cut into its own flesh. They have enormous difficulty admitting mistakes. 'Super Sete', 'Dia de Sorte', 'Dupla Sena', 'Timemania', and Loteria Federal in its current model - we have been asking for a hybrid federal lottery, but it never gets implemented - should no longer be in the portfolio. Things at Caixa move very slowly. We will see how it goes with the Caixa Lotteries subsidiary.
Sports betting is a success worldwide. How does the lottery network plan to establish itself in this market, and what actions are necessary to adapt to this market?
In Brazil, the segment collects six times more than all Caixa lotteries combined. The lottery network has the capacity to be the largest and most qualified affiliation agent in this segment. We have credibility, and our battle with Caixa will be enormous to define the model and remuneration. In any case, we need to be involved in all models and sales channels.
Caixa promised to relaunch Lotex. What is needed for the project to take off?
The instant lottery product is needed "yesterday." In fact, it was needed "before yesterday." From the lottery entrepreneur's point of view, it is unfortunate that it was blocked by a judicial decision for unknown reasons. We were promised the product back by August; now, I believe it will not be released this year, but the federation lacks information to understand and give an opinion. I just reiterate that we are once again being harmed by the conflict between Caixa and international operators.
How do you see the launch of state and municipal lotteries? How could the network get involved in this new phase?
Our origin is gaming, and our future depends on it. I advocate for opening the lottery network's counter to all legal lottery modalities, regardless of commercial agreements with Caixa. If I win this election, one of my priorities will be this. It does not make sense for us to be excluded from this, and we will certainly fight for it.
How does Caixa see the lottery network in five years? Does Febralot have access to this study?
We do not have access, and I suspect that Caixa has not conducted this study seriously. We do not perceive a real commitment to our future. Today, as incredible as it may seem, it is clear that the lottery network, at least a significant part of it, has become a problem for Caixa. However, as the saying goes, "you made your bed, now lie in it." Caixa chose the municipalities and points of sale, so every decision involving the licensing of lottery units is entirely their responsibility, not to mention they received money for it. Therefore, we cannot accept such slowness and inefficiency in managing such a valuable network.
But the new federation management will need to conduct this study, evaluating all variables and scenarios, and we will do that. Finally, I thank Games Magazine Brasil very much for the opportunity to express my purposes and goals in deciding to run for the next term of the lottery federation.
Source: Exclusive GMB
