IGT and Scientific Games Announce Exit from Lotex Concession

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IGT and Scientific Games Announce Lotex Concession Exit
Photo: Agencia Brasil

This post is also available in: Português (Portuguese (Brazil))

IGT Global Services and Scientific Games Corporation announced in a joint statement that they will withdraw from the instant lottery concession, Lotex, in Brazil. The companies won the tender in October 2019.

In addition to the concession, the companies wanted to sign a distribution contract with Caixa Econômica Federal, a state bank and operator of the largest lottery chain in the country. However, despite closing a contract, “Caixa did not authorize its execution within the term of the concession”, and the joint venture also did not receive an extension from the government.

In a note, Walter Bugno, IGP’s New Business and Strategic Initiatives EVP, and Michael Conforti, President of Global Strategies at Scientific Games, stated: “Caixa’s 13,000 lottery points are fundamental to the successful launch of the ticket business snapshots in Brazil and without the distribution network, companies were not prepared to move on ”.

In addition, on September 30, the Federal Supreme Court ruled that the federal government-administered lottery monopoly was unconstitutional, so each of the 26 states and the Federal District is likely to develop state lotteries.

The judicial decision and the lack of a final agreement with Caixa led the companies to withdraw, stating that, “despite being fully prepared to comply with all the financial and non-financial conditions of the concession contract, prudent capital management determines that in let us withdraw from the process to reevaluate how to implement a model of lottery operations in Brazil ”.

However, the companies pointed out that there is a possibility of resuming the process if the government grants an extension for Caixa to authorize and sign a contract.

The Lotex concession

Lotex, popularly called scratch cards, is a lottery modality in which the bettor immediately finds out if he has won. The expectation is that this game may yield more than 15 billion reais per year, while the Union retains 16.7% of gross revenue.

Promoted last year, the auction was celebrated by the economic team because it was postponed on five previous occasions. The winning consortium was Estrela Instantânea, composed precisely by the English company IGT and the American company Scientific Games.

This post is also available in: Português (Portuguese (Brazil))