The consortium formed by Genlot Game Technology and Beijing Zhongcai Printing (BZP) won the Caixa Econômica Federal tender for Lotex, popularly known as ‘scratch card’. BZP is a joint venture involving China Welfare Lottery, France Des Jeux and Berjaya.
The result of the bidding was recently published in the Official Gazette of the Union, putting an end to legal litigation promoted by one of the competitors.
The legal action, which was processed in secret from the courts, generated a significant delay, but now the lottery is scheduled to launch in the next quarter.
The initial revenue expectation varies between R$1 billion and R$2 billion, but executives involved believe that the revenue potential could be much greater.
Regulation and allocation of scratch card funds
Lotex operates under the rules established by a decree from the Ministry of Treasury which delegates to Caixa Econômica Federal the right to operate the lottery along the same lines as the Federal Lottery.
The scratch card will allocate a significant part of the proceeds to fund social security and public safety, in addition to encouraging sport and culture in the country. Prizes will receive approximately 65% of the funds raised. The minimum bet is R$2.50.
History and controversy
Initially, Lotex was on the Jair Bolsonaro government’s privatization list. However, President Lula decided to keep it under public management, changing the direction of the lottery.
The process faced significant challenges when the runner-up in the competition alleged irregularities, suggesting that Caixa had already chosen the Genlot consortium previously.
The competitor argued that the competition term provided for discounts on the collection of the bank’s operating costs, which, in practice, would distort the rules of the Ministry of Treasury’s ordinance.
The court, however, ruled against Caixa, and the Federal Audit Court (TCU) found no irregularities in the process. This period of discussions and allegations led to a delay of almost three months in concluding the bidding process.
Due to the controversy, Caixa executives’ trip to China, which was scheduled for May, had to be postponed. Now, with the legal issue resolved, the Chinese consortium is prepared to begin operations.
