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With the growth of sports betting sites and Caixa's dominance in lotteries, state financial institutions are counting on their regional appeal and reach to win customers. Of the five existing state banks, only Banrisul (Rio Grande do Sul) and Banpará (Pará) have no plans in this regard.
The plans stem from a decision by the Federal Supreme Court (STF), which determined in 2020 that the Union did not have a monopoly on lottery operations and settled a long-standing dispute with some states. Since then, state governments have been preparing to explore the service, and some of those that still have banks are placing the lottery under these institutions.
The market is large. Caixa had record revenue from lotteries last year, of R$25.6 billion (US$4.35bn). Also in 2024, the subsidiary Caixa Loterias became operational and concentrated its gaming activities, including resuming the “raspadinha” (scratch card) game, which had been interrupted almost nine years ago.
In the Federal District, in 2023, BRB announced an agreement with the Portuguese company SCML to operate lotteries, but the deal was not signed due to questions about the legality of the event. Now, the process of choosing a partner has resumed, with the hiring of BTG Pactual to analyze the possibilities. The expectation is to finalize it this semester. According to Diogo Oliveira, BRB's director of wholesale and government, the projection is to raise almost R$100 million (US$17m) per year from operating the lottery.
BRB has a digital bank in partnership with Flamengo, but by law it can only sell lotteries in the Federal District. “With geolocation, we can find out whether the customer is within the borders of the Federal District and offer this service or not.”
In Espírito Santo, Genial is leading the process to select a partner for Banestes, which should be completed by March. The bank does not disclose its expected revenue from lotteries. “Of course there is a growth curve in the first two or three years, but the expectation is that it will be a significant source of revenue,” says Silvio Grillo, director of investor relations and finance.
According to the president of Banestes Loteria, Ricardo Pessanha, the idea is to distribute the product through the bank’s correspondent network, called BanesFácil, which has almost 400 points, in addition to digital channels. “I believe there is a high ‘cross-sell’ [cross-selling] by placing lotteries in this correspondent banking channel. They can stop having a basically transactional character and become a relational point as well,” he says.
Banestes will operate a betting company and has not ruled out the possibility of having physical video lottery machines, bringing to the real world modalities that work like the Fortune Tiger game on cell phones. “The law does not allow physical casinos, animal games and bingo, but the rest can in theory. Today, a large part of the betting and ‘tigrinho’ games operate clandestinely, and we want to bring to light what used to be done in hidden environments. Of course, it will depend on the partner we choose, but whatever is legal we will study,” says Pessanha.
In Sergipe, Banese chose a consortium formed by Culloden/TSA to have a minority stake in the subsidiary that will operate the lottery. It was created last month and the expectation is that the products will be launched in the first half of the year. “Lottery operations require robust distribution channels, efficient payment solutions [such as wallets, acquiring, Pix, cash-in and cash-out] and a diversified customer base. Banese, through its conglomerate, has the largest service network in Sergipe, in addition to offering all the financial solutions necessary to support a lottery operation,” the bank said in a response sent to Valor.
According to Banese, studies estimated that the lottery market in Sergipe was worth around R$120 million (US$20.4m) in 2019, even without the recent increase in bets. “Banese’s new subsidiary aims to consolidate itself as the leader in the lottery sector in Sergipe within the first five years of operation. The objective is to reach a 50% market share of the lottery market in the state during this period.”
The CEO of Caixa's lottery unit, Luciola Aor Vasconcelos, says she is not afraid of competition from state lotteries. “It's quite easy for us, we operate nationwide. But that doesn't mean we're not looking at the competitive market.”
The executive also states that, despite there being a variety of games - numerical prediction (traditional lottery), instant (scratch cards) and fixed odds (like sports betting) -, the modalities do not compete with each other. “One cannibalizes the other a little, but not much, they are not competitors. The world of bets is set, but it doesn't affect our operations.”
Banks say they are concerned with financial education to prevent gamblers from getting into debt and state that they will have measures to combat gambling addiction. This is also the case of Caixa, which will also operate a bet. “We sell fun, dreams, but we are very concerned with social issues. In the bets market, we will be even more concerned with these aspects,” says Vasconcelos.
Unlike state banks, which must have partners to operate their lotteries and betting operations, Caixa intends to operate independently.
Source: Valor