São Paulo City Hall holds hearing on lottery service concession.
The Executive Secretariat for Privatization and Partnerships (SEDP) of the City of São Paulo held a virtual public hearing on the project for granting the municipal lottery public service. The event, which took place this Tuesday (15), is part of the public consultation, which seeks contributions to improve the proposal for operating specific, numerical, sports, passive, instant and fixed odds lottery modalities.
The public consultation has been open since June 23 and includes, in addition to the hearing held this Tuesday, a road show scheduled for this Wednesday (16), at 10 am. All project documents are available on the City Hall website, in the Municipal Government Secretariat area.
According to SEDP, the project became viable in 2020, when the Supreme Federal Court allowed states and municipalities to operate lottery services, previously exclusive to the federal government. Based on this decision, São Paulo enacted a municipal law last year authorizing the concession.
During the hearing, Estela Coimbra, director of São Paulo Parcerias, presented the main aspects of the project. Among the expected benefits are the collection of resources for the city, the control of the illegal gambling market, and the application of certifications to guarantee security for bettors.
“Federal legislation stipulates that fixed-odds betting should operate in a competitive environment, and the tender provides for the granting of a single operator?”, questioned Magnho José, editor of BNLData. Estela responded that competition already exists with operators authorized by the Union.
The law stipulates that at least 50% of the revenue collected by the city will be allocated to the Municipal Social Development Fund for investments in health, education, and security. The concessionaire must submit game plans for approval by SP Regula and implement a compliance program.
Regarding user protection, the concessionaire must guarantee control over registrations, with the possibility of establishing betting limits and exclusion from the platform. It will also monitor gambling patterns to identify potential cases of addiction, in accordance with the General Data Protection Law.
The bidding criterion will be the highest fixed grant value, with a minimum of R$ 251 million. To participate, companies must demonstrate prior experience operating at least one lottery modality for a minimum of 12 months, with revenue of at least R$ 280 million.
The contract will have a duration of 20 years, with the Treasury Department as the granting authority and SP Regula as the regulator. The concessionaire may sell any of the stipulated products, both in physical and digital formats.
Financial estimates indicate total revenue of R$ 56 billion over 20 years, of which R$ 3,9 billion will be allocated to variable concession fees for the municipality. Operational costs are estimated at R$ 8 billion, and R$ 41 billion is expected to be paid in premiums.
Estela Coimbra clarified that the dealership does not need to explore all modalities, and can choose the most interesting ones for its business model. There is also no obligation to establish physical points of sale; it can operate solely online.
"Perhaps the solution is to stipulate that if the selected concessionaire chooses not to explore certain modalities, they will be tendered to other players in the future," suggested another participant.
Following the public consultation, the project will be submitted to the Municipal Court of Auditors. Subsequently, the tender notice and the regulatory decree will be published. The expectation is that the contract will be signed in the first half of 2026.
The hearing concluded with a request for all contributions to be formalized in writing via the project's official email by July 28th. The recording will be available on the São Paulo Negócios YouTube page.
High concession fee
There is strong concern among experts regarding the model presented by the Executive Secretariat for Privatization and Partnerships (SEDP) of the São Paulo City Hall during the public hearing on the concession of the public lottery service in the capital of São Paulo.
The fixed grant value for the 20-year concession of lottery operations of R$ 252 million and the variable grant of 27,2% plus 1% administration fee for Gross Gaming Revenue (GGR), totaling 28,2%, is considered very high. SEDP estimates revenue during the contract of R$ 4,490 billion, which will generate ISS (municipal tax) of R$ 290 million.
Project
SEDP received support from São Paulo Parcerias (SPP) in structuring the project, while the Finance Secretariat will be responsible for monitoring the concession and overseeing the services provided.
The concession will cover six types of betting: numerical prediction, specific prediction, sports prediction, instant lottery, passive lottery, and fixed-odds betting (sports betting). In the original project design, the total estimated investment is R$ 215,7 million.
In addition to allocating resources to the FMD (Municipal Development Fund), the concession of the lottery service aims to bring more security to the bettor, through certified products and responsible gambling. The project also establishes clear guidelines for the operation of the service, and is aligned with the Sustainable Development Goals, which aim at eradicating poverty and implementing adequate social protection system measures.
