Brazil to assess options after Lotex auction fails again

29 May 2019

Brazil’s much-delayed privatisation of the state’s instant lottery games business Loteria Exclusiva Instantânea (Lotex) has once again been postponed following a lack of interest in from potential bidders.

Bidding for the tender, which has already been delayed numerous times - this is the second postponement in May alone - looked set to finally go ahead yesterday (May 28).

However just a day before the planned auction was scrapped, due to few companies filing proposals to take charge of the concession.

Instead the country’s Investment Partnerships Programme (PPI) said the government would enter into dialogue with the industry and explore alternatives before deciding on its next steps. Its ultimate goal remains to privatise Lotex and increase competition in the country’s national lottery market.

Plans to privatise Lotex, which is currently operated by Brazil’s largest bank, Caixa Econômica Federal (CAIXA), have been in motion since 2017, as part of a drive to reduce the country’s fiscal deficit by selling off state assets.

Under the plans, CAIXA will continue to operate traditional lottery games in the market, with the government originally aiming to raise more than $300m (£237.6m/€269.4m) from the sale of the Lotex tender. The winning bidder would hold the exclusive rights to offer online and physical instant win games in the country for 15 years.

However the process has been fraught, with the tender auction rescheduled multiple times. The country’s newly installed president Jair Bolsonaro had pledged to complete the privatisation by the end of the first quarter of 2019, only for this to be pushed back to April 26, then May 9, and finally to May 28.

While the privatisation has ground to a halt, there are signs that Brazil is making progress in modernising its gambling market. Last December outgoing President Michel Temer signed into law a bill that gave the country’s Congress a two-year window to develop a regulatory framework for sports betting in the market.

Two bills to legalise online casino are under discussion in the Chamber of Deputies, the lower house of the Brazilian legislature, while a bill to legalise integrated casino resorts was introduced in Congress in February.

Read more about the regulatory climate in Brazil in iGB's latest e-zine, available here.