Caixa will allow bettors to place any bet online.
BRASILIA and RIO – In pursuit of profit and better results, Caixa Econômica Federal will soon open the possibility for all bettors of its nine lotteries (except the federal lottery) to place bets online. Currently, this is only possible for Mega-Sena and for Caixa customers. Initially, bets will have to be paid for with a credit card, and bettors will have to spend a minimum of R$ 20 per "shopping cart". But the bank plans to allow payment by debit card and, in the future, develop an app for those who want to try their luck via mobile phone.
According to sources involved in the discussions, Caixa's objective is to attract an audience that currently does not frequent lottery outlets: young people and high-income individuals . This is one of the main arguments used to counter the opposition of lottery operators, who fear a drop in business at their physical stores.
The measure will also boost Caixa's revenue from lottery fees, which currently retains about 10% of ticket sales. In 2016, lottery revenue reached R$ 12,9 billion. The forecast for this year is R$ 14 billion. According to projections, in the first year of online betting, the bank will collect R$ 500 million and, within five years, between 4% and 5% of total revenue.
According to government officials, the possibility of offering games online is part of a larger strategy by Caixa to attract customers in the virtual world, at a time when account holders are visiting physical branches less and less. To this end, the bank is investing in a new digital platform—within the scope of measures to improve efficiency and reduce costs, with a view to its initial public offering (IPO).
Total bets must be R$ 20.
To overcome resistance from lottery concessionaires, Caixa intends to pass on a percentage of the revenue obtained from online betting to the network, provided that lottery retailers give something in return—such as, for example, advertising the possibility of placing bets online in their agencies. The details are being finalized with the Federal Court of Accounts (TCU) to avoid future problems.
In response to the news, lottery concessionaires began a movement, with congressional support, to draw attention to the number of units that have closed due to the economic crisis. They also complain that the remuneration for services rendered is low. Caixa, in turn, argues that this complaint is natural and part of the negotiation process.
According to experts familiar with the discussions, the concessionaires' fear of losing business is unfounded, because the target audience does not frequent lottery outlets. Furthermore, with more bets placed, the prize value will increase, which will attract more people to the lottery outlets.
"This has happened in other countries, such as France, Belgium, and Portugal, which have a model similar to ours," explained a technician, adding that Caixa's initiative to offer all games online is in line with what is happening around the world.
Another argument is that online bettors will have to wager at least R$20. The average ticket price at lottery outlets is between R$11 and R$12.
Alongside the changes Caixa intends to make to the game offerings, lottery representatives claim that 20% of the country's establishments have closed their doors since last year. According to unions and companies in the sector, there are two main problems. Since the sector lacks regulation, lottery outlets must adhere to contracts with Caixa, whose fees, passed on by the bank for services rendered, do not include inflation adjustments. Another problem is that, with the increase in the insurance cost charged by transport companies, Caixa has not increased its so-called "security surcharge" to the same extent. In Rio, Caixa's reimbursement only covers 60% of the cost of transporting the money, compared to about 70% on average nationwide.
"The situation is very complicated. I've seen everything in this crisis, but lottery outlets closing their doors is a first," said the president of the Lottery Outlets Union of the Federal District, Jair Magalhães, highlighting that a large portion of the stores that stopped operating were in municipalities that only have lottery outlets to carry out banking services.
According to the Brazilian Federation of Lottery Companies, 104 agencies closed in the country in the first half of this year alone. In 2016, there were 74. In other words, the number of closures in 2017 is expected to double compared to last year. In Rio de Janeiro, there are 1.200 lottery agencies. In two years, one hundred have closed.
Jodismar Amaro, president of the federation and union of lottery outlets in São Paulo (SINCOESP), says that the situation of the companies is serious, since the contract with Caixa does not include clauses for contractual readjustment:
"Because of this, lottery outlets are suffering enormous losses. And we're working with outdated values. Furthermore, a large number of lottery outlets across Brazil have debts with Caixa itself. It's a complicated situation."
Half of the 13 lottery outlets in Brazil have loans with Caixa Econômica Federal, totaling approximately R$ 600 million, according to the sector's federation.
Marcelo Gomes, vice-president of SINCOERJ, which represents lottery outlets in Rio, says that in the last two years there have been more than 600 layoffs in the state:
— Caixa's outdated fees are causing losses. Today, we receive, on average, 0,54%. To cover expenses, it would have to be 0,83%. To make a profit, it would have to be 1,06%, according to the bill that is about to be voted on in Brasília. We are using the money from the accountability process to survive.
The crisis in lottery outlets was the subject of a statement made about a month ago by Congressman Júlio Lopes (PP-RJ). According to him, the situation is one of "absolute penury." Regarding the fees, Lopes illustrated this with an example:
"On a payment slip, if the bank fee is R$ 4,00, the lottery outlet keeps R$ 0,40," he stated.
He also said that Caixa had committed to providing a response by August 31st regarding the increase in transport insurance, and that lotteries had been burdened by more than 50%. He stated that these establishments have gone two years without any adjustment to their fees, making their situation unsustainable.
The congressman cited the extensive reach of the country's banking system, which relies heavily on lottery outlets and the postal service, which has been closing branches, especially in small towns:
— Well, if the post offices aren't working, and the lottery outlets are in dire straits, what reach will our banking system have when the big banks no longer want accounts from small savers?
When contacted, Caixa informed that it maintains a permanent dialogue with lottery operators and analyzes the list of demands, "with the aim of addressing and/or seeking alternative solutions that favor the sustainability of the lottery network." The institution highlighted that the adjustments are periodic: in June/July 2016, the fees were increased by an average of 13,17%, and in August of this year, by 8,5%. Furthermore, the bank stated that the security surcharge for transporting valuables was adjusted by 10,43% in 2016 and by 40% this year.
Caixa also reported that there are 13 lottery outlets in the country, and in 2.569 municipalities they are the only banking channel. Contacted to comment on the issue of fee adjustments, the Brazilian Federation of Banks (Febraban) stated that it would not comment. ( O Globo – Eliane Oliveira – Geralda Doca – Bruno Rosa)
