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Brazil – Brazilian government confirms sale of instant lottery

Brazilian President Michel Temer has announced that Lotex, the instant lottery division arm of the lottery, will be amongst the 57 public companies and airport terminals which will be privatised, with the objective of reducing the country’s fiscal deficit which amounts to nearly US$500bn.

Lotex, which is currently owned by the biggest public bank in Latin America, the Caixa Econômica Federal (CAIXA) will be sold off to a private operator and the bank will no longer take part in the business. The licence will be granted for a term of 30 years. It is estimated that the government could reap as much as US$320m from the sale.

The sale is part of a huge asset sale which could help the government manage to cut the widening budget gap and reduce rising public debt. Brazilian stocks rose on the back of the news. As well as the announcement that the government was planning on selling off Electrobras, Brazil’s largest energy company, the 57 public owned assets include oilfields, energy transmission lines, highways and even São Paulo’s city airport, as well as fourteen other airports nationwide.

The Brazilian Development Bank (BNDES) a federal public company associated with the Ministry of Development, Industry, and Trade and the main financing agent for development in Brazil has been overseeing the privatisation of Lotex. According to the government, the auction will now take place on December 10th after a government study found that instant games would bring a greater financial return to the government once they have been privatised. Meanwhile CAIXA will continue to run and operate traditional lotteries such as its most popular lottery the Mega-Sena.

Production of instants was officially discontinued in March 2015 and their sale discontinued in November 2016 after a new operating model was established for the game. This management model entailed the creation of new type of instant lottery called the Loteria Exclusiva Instantânea, or Lotex a wholly-owned subsidiary of CAIXA. Lotex was included in the National Privatisation Program under the scope of the Government’s Investment Partners Program. BNDES was made responsible for implementing the measures necessary to independently identify the best partner to operate the game for Caixa. It is believed that the bidding process will be hotly contested with some of the largest operators in the world ready to get on board.