FEBRALOT advocates for an increase in commissions on online lottery bets.

The Brazilian Federation of Lottery Companies – FEBRALOT – sent an official letter to the Vice-President of Operating Agents of Caixa Econômica Federal, Edilson Carrogi Ribeiro Vianna, requesting a review of the percentage attributed to the lottery network, which is currently 3,11%, to 4,56%. According to the entity, the correction would have the same equivalence as the percentages for physical games of 8,61% minus the 4,05% referring to the credit card fee used for online betting.

In the document, FEBRALOT highlights the significant losses resulting from the loss of physical customers due to the evolution of gaming in the electronic medium, and comments on the need for adjustments in the percentage calculations to maintain a healthy physical network, enabling excellence in the government's social services.

See the full text of the Official Letter:

Febralot Official Letter/207/2020

Brasilia, April 09, 2020

CEF

Mr. Edilson Carrogi Ribeiro Vianna

Vice President of Lotteries

Dear Vice President,

Regarding the issue of online lotteries, we are certain that we cannot stop the future, but as an entity representing the lottery category, we cannot understand why the network that made these games grow and become this important source of revenue for the Federal Government's social projects is receiving the smallest share of all percentages attributed to this type of bet, without a plausible and convincing explanation.

We need the percentage allocated to the Network, which is currently 3,11%, to be revised to 4,56%. This benchmark will ensure that, despite the lottery retailer bearing the entire cost of the card, they will still receive the same fee as for physical games, which is: 8,61% (physical game percentage) – 4,05% (credit card fee) = 4,56%.

We understand that the method applied is incorrect. A fee of 3,11% should not be applied, as this leaves a surplus of 1,45%, assuming that the network is paying a percentage to Caixa to operate, and which leaves us with the smallest portion of the total revenue from these games, and the significant loss of physical customers.

We monitor the evolution of electronic gaming daily, and if these calculations are not adjusted to at least the percentage requested above, we will have immense difficulty maintaining a healthy physical network and continuing to provide excellent social services to the government.

We are very pleased to have our activities recognized as essential, and we are striving to meet all this demand, always preserving the safety of our employees and our customers. However, unfortunately, despite our recognition as an essential network, we are seeing a daily decline in our lottery revenue due to our customers migrating to the virtual environment.

The importance of the Lottery Network in the measures being taken by the Federal Government to support the Brazilian population at this crucial time is well known.

And it is precisely during this period when we most need to be active and have the financial means to maintain the business, that we find ourselves on the verge of having to close many of our Units because they are unable to sustain the costs, due to the large migration of their clients to the virtual environment and the low commission offered by the Lottery Network.

Therefore, and considering all the above, and with the sensitivity and attention that the moment demands, we hope to be heard through your intervention.

With our respects,

Jodismar Amaro

President