LOTEX 'gets stuck' and becomes a problem for the lottery network and Caixa Loterias.

The Brazilian Federal Savings Bank (Caixa Econômica Federal) is facing serious problems with the operation of the Exclusive Instant Lottery – LOTEX . Relaunched in November of last year, tickets with the designs Clover of Luck (R$ 2,50), Only Gold (R$ 2,50), Wheel of Luck (R$ 5,00), Treasure Hunt (R$ 10,00) and VIP (R$ 20,00) are piling up at lottery outlets and have become a problem for Caixa and the lottery network.

According to lottery executives interviewed by BNLData , the product has at least three serious problems: the prize scheme is flawed and has not been corrected, there is a complete lack of a publicity plan in mainstream media and social networks, and the distribution logistics are flawed.

The consortium formed by the Chinese company Genlot Game Technology and BZP (Beinjing Zhongcai Printing), a joint venture between China Welfare Lottery, France Des Jeux and Berjaya, won the bid to operate the lottery in partnership with its subsidiary Caixa Loterias in July 2024.

Sales of all tickets are weak, but the biggest concern for business owners is the Treasure Hunt (R$ 10,00) and VIP (R$ 20,00) tickets, which are stuck in lottery outlets. Caixa (the lottery operator) is aware of the problem, but so far has not found a solution.

In November of last year, the instant lottery expert and CEO of Hebara Produtos Lotéricos had already predicted the failure of the product's prize plan through an article published by BNLData under the title ' Lotex: a chicken flight! '.

According to the expert, in the Treasure Hunt (R$ 10,00) Caixa adopted some principles to define the prize plan for the products that, unfortunately, do not follow, by any means, the best practices in the segment. To announce an avalanche of prizes and a high frequency of prizes, the prize plan stipulated that 94% of the winning tickets would have a prize value lower than the face value, while 98,4% of the winning tickets would have a value lower than or equal to the face value.

Furthermore, lottery retailers are complaining about the distribution criteria for products through the fixed quota system. According to the criteria defined by Caixa Loterias, the global average market share for instant lottery tickets is 20%, and in Brazil, the distribution percentage adopted for the lottery network is 6,5% of the final consumer price for instant tickets. This means that each of the 13,5 lottery retailers will be obliged to sell the equivalent of 6,5% of their revenue in LOTEX tickets.

Furthermore, according to the consortium's contract with Jadlog Transportes e Logística for the distribution of LOTEX, the company has 30 days to deliver the product in the interior and 20 days in the capital cities. No deliveries were made during the months of February and March.

On April 26th, Caixa will be charging for the VIP instant lottery ticket (R$ 20,00), and lottery managers have requested a reassessment of the process, including consideration for tickets that are currently unsold in the network. Furthermore, there is a possibility that Caixa will no longer send products without a request from the lottery operator, and may even suspend the charges altogether.

“Besides the flaws in the prize plans and the lack of publicity, the LOTEX marketing and distribution model generated antipathy from the lottery network, due to the way Caixa imposed it through a fixed quota,” commented the president of the Brazilian Federation of Lottery Companies – Febralot, Ricardo Amado Costa.

Marcelo Araújo, a lottery business owner from Minas Gerais, confirmed that the product is bad, doesn't award prizes, and has a weak prize plan. And the biggest problem is that even after delivery, if no tickets are sold, the transaction will still be debited from the business owner's account.

“The quota for instant lottery tickets for the lottery network is excessive. My suggestion is that the lottery network stop accepting instant lottery tickets until the LOTEX problems are resolved. I also advocate that Caixa guarantee that future orders will not be charged to the business owner,” he commented.

Some business owners suggested that Caixa should collect all the products and restart LOTEX operations with new tickets featuring more competitive prize plans than the current ones, and a different distribution logistics system.

Federal Court rules in favor of ALSPI.

The National Association of Lottery Agents, Banking Correspondents and Businessmen Linked to Games (ALSPI) filed a lawsuit in the Federal Court of the Federal District against the mandatory/forced quota established for the sale of LOTEX.

In the lawsuit, ALSPI argued that Caixa informed the lottery network that it would begin selling Lotex – Loteria Instantânea Exclusiva, popularly known as "scratch-off tickets," on November 2nd, which had been suspended since 2015 by order of the Ministry of Finance. Ministry of Finance Ordinance 1646/2023 authorized CEF to resume the marketing and sale of the product for a period of 24 months, starting from the first ticket issuance.

He stated that upon reviewing the terms and conditions of the new Lotex, he found that certain commercial/financial obligations imposed on lottery agents are not supported by law, the contract, or the circular that regulates the existing legal/commercial relationship between the parties.

Furthermore, Caixa (the Brazilian lottery operator) has set a target/quota for the number of scratch-off tickets that each lottery retailer must sell, and if they fail to reach the target/quota, they will have to bear the costs, meaning they will be forced to buy the scratch-off tickets mandated by CEF (Caixa Econômica Federal), assuming the loss even though they haven't sold any to the public, which they consider illegal and are seeking to reverse.

On February 21st, the Substitute Federal Judge of the 7th Court/SJ-DF, Luciana Raquel Tolentino de Moura, granted an injunction stating that Circular Caixa 1.024/23 contains nothing about a mandatory quota with payment burden for lottery concessionaires in case of failure to meet the target.

According to the magistrate, this would constitute a dangerous precedent of imposing an obligation without contractual provision, "which cannot be supported by the Judiciary, under penalty of rendering the contracts entered into by the parties meaningless," she states. "Once the likelihood of the plaintiff's allegations is demonstrated, the danger of delay stems from the disbursements that the plaintiff's associates are obliged to make whenever they do not reach the target, which causes them losses in the business activity they carry out."

The judge has ruled that Caixa (the Brazilian bank responsible for the lottery) must stop imposing quotas and that lottery retailers must request LOTEX tickets according to their own criteria.

"I hereby order Caixa to immediately cease imposing a quota on the plaintiff's members for the sale of Lotex (scratch-off tickets), allowing them to request the 'scratch-off tickets' according to their own criteria, as per the grounds set forth in this decision, until the final judgment of the case," he ruled.

CAIXA appealed the decision to the Federal Regional Court – TRF1, but so far the appeal requesting the suspension of the injunction has not yet been considered.

Decision by the Substitute Federal Judge of the 7th Court/SJ-DF in favor of ALSPI.

LOTEX's operation is under public consultation by SPA-MF.

The Prizes and Betting Secretariat of the Ministry of Finance – SPA-MF has launched a public consultation on its regulatory agenda for the 2025-2026 biennium.

One of the proposals currently under consultation by SPA is 'Project 6: Review of the regulations on the Exclusive Instant Lottery – LOTEX', which aims to improve the current LOTEX model, provided for in Article 28 of Law 13.155/2015, in Article 2 of Law No. 13.262/2016, regulated by Decree No. 9.327/2018 and authorized by MF Ordinance No. 1.646/2023.

The public consultation is being conducted through the Participa + Brasil Platform, and lottery operators can submit their written contributions until March 27th.

FEBRALOT files lawsuit against Caixa Econômica Federal regarding LOTEX invoice debit.