B3 will assist BNDES in the privatization of the instant lottery.
B3, formerly Bovespa, will assist BNDES in providing specialized technical advice and operational support necessary for the bidding process for the concession of the Exclusive Instant Lottery (Lotex) public service, popularly known as "scratch-off tickets," within the scope of the National Privatization Program. The contract has a duration of 12 months and a value of R$ 606.717,80.
Through studies conducted by BNDES (Brazilian Development Bank), concessions were defined as a form of privatization, a model that presents greater attractiveness to investors and a higher financial return to the government. Today, in Brazil, there are three federal lottery modalities: lottery-based (Mega-Sena, Lotofácil, Lotomania, Dupla-Sena, Timemania, and Quina), number-based (Loteria Federal), and sports prediction (Loteca and Lotogol). Throughout 2016, the Federal Government collected approximately R$ 13 billion from these lotteries. In the same period, social transfers totaled just over R$ 6 billion. Part of the revenue collected from federal lotteries is transferred, by legal mandate, to social programs of the Federal Government. The resources are allocated to education (Higher Education Student Financing Fund), sports (Ministry of Sports, Brazilian Olympic Committee, Brazilian Paralympic Committee and football clubs), culture (National Culture Fund), security (National Penitentiary Fund) and health (National Health Fund).
According to studies by the Secretariat for Economic Monitoring of the Ministry of Finance (Seae), the concession of Lotex will result in increased competition, modernization, and growth of the lottery market in the country. The participation of lotteries in the Brazilian economy currently fluctuates around 0,21% of GDP. This type of lottery has significant commercial potential in the country, with Brazil being one of the largest markets still unexplored by the instant lottery sector.
Globally, the lottery market generates approximately US$260 billion annually in business, according to data from the World Lottery Association. This organization, headquartered in Basel, Switzerland, represents state-owned and private lottery companies in 80 countries. The amount allocated to non-profit purposes, benefiting society, totaled US$76 billion during the same period. According to the same entity, the sector employs 112 people worldwide. The main global markets for this product are Italy, France, England, and some US states, which served as references for the BNDES studies.
The main positive impacts, which make the business attractive to the State, are the great revenue potential, the grant generated by the sale of the right to operate, the generation of employment and income for the population, and the financing of social causes through mandatory transfers, established in the legislation creating this type of lottery. Studies prepared by BNDES point to the possibility of total revenue of around R$ 6 billion starting in the fifth year of operation, of which, by law, 16,7% is allocated to social transfers and 2,6% refers to tax revenue.
The concession term was set by the Ministry of Finance at 25 years. Studies prepared by BNDES (Brazilian Development Bank) defined a minimum grant value of R$ 916,6 million. Factors attractive to potential investors include a 65% payout, which stimulates demand for the product; a legal framework that guarantees the legal security of the concession; a 25-year term, which ensures a return on investment for the private partner; and the potential to be explored in the instant lottery service sector in Brazil. (With information from the "Believe it or not" column – Nelson Priori – Monitor Digital)
