Three Brazilian state banks are preparing to explore the lottery market, driven by the growth of sports betting. BRB (Distrito Federal), Banestes (Espírito Santo) and Banese (Sergipe) are creating specific subsidiaries to operate in this sector. The information was recorded in a report on the Valor portal.
With the advancement of “bets” and Caixa’s dominance in the sector, these institutions see an opportunity to expand their revenues. Furthermore, the regional presence and capillarity of these banks can be differentiators in attracting customers.
Of the five existing state banks, only Banrisul (Rio Grande do Sul) and Banpará (Pará) do not have similar plans.
The decision to invest in the segment came after the Federal Supreme Court (STF) determined, in 2020, that the Union did not have a monopoly on the operation of lotteries. Since then, state governments have started to structure their own operations, often linked to local public banks.
Promising lottery market
The potential of this sector is significant. In 2023, Caixa raised R$25.6 billion with its lotteries. This year, its subsidiary Caixa Loterias concentrated the segment’s activities and resumed the “scratch card”, interrupted for almost a decade.
In the Federal District, BRB had signed a partnership with the Portuguese SCML to explore lotteries in 2023. However, legal questions prevented the signing of the contract.
Now, the bank has resumed the process and hired BTG Pactual to evaluate alternatives. Diogo Oliveira, director of wholesale and government at BRB, stated that the projected annual revenue from lotteries is R$100 million.
“The law does not allow land-based casinos, Jogo do Bicho and bingo, the rest in theory can”, highlighted Ricardo Pessanha.
According to him, the bank’s credibility can attract bettors. “The bank has capillarity and the strength of the brand. People know that we are controlled by regulations and have security obligations.”
Although BRB has a digital bank in partnership with Flamengo, betting will be restricted to the Federal District. “With geolocation, we can identify whether the customer is in the DF and offer the service or not”, he explained.
State plans
In Espírito Santo, Banestes is also making progress in structuring its operations. The bank hired Genial to select a partner, with completion expected by March.
Silvio Grillo, director of investor relations and finance, highlighted that the collection will be gradual. “There is a growth curve in the first two, three years, but we expect it to be a significant source of revenue.”
The president of Banestes Loteria, Ricardo Pessanha, stated that distribution will be carried out through the BanesFácil network, with 400 land-based points, in addition to digital channels. “I believe there is a high ‘cross-sell’ placing lotteries in this channel. Banking correspondents stop being just transactional and become relational points.”
The bank is also considering including video lotteries. “Today, a large part of betting companies operate underground. We want to regularize what was previously done in hidden environments,” said Pessanha.
In Sergipe, Banese opted for a consortium with Culloden/TSA to have a minority stake in the new subsidiary. Thus, created last month, the unit will launch products this semester. “The operation of lotteries requires robust channels, efficient payment solutions and a diversified customer base”, declared Banese in response to Valor.
The bank carried out studies that estimated the lottery market in Sergipe at R$120 million in 2019, before the expansion of betting. The subsidiary’s goal is to lead the sector in the state in five years, reaching 50% of the market share.
Caixa is not afraid of competition from other lotteries
Despite the entry of state banks, the CEO of Caixa’s lottery unit, Luciola Aor Vasconcelos, stated that competition is not a concern. “For us it’s very calm. We operate across the country, but we follow the market,” he said.
She highlighted that the different modalities do not compete directly. “One cannibalizes the other a little, but they are not direct competitors. The betting market is established, but it does not affect our operations.”
Banks have also committed to implementing measures to prevent debt and combat gaming addiction. According to Vasconcelos, this is a central concern for Caixa. “We sell dreams and entertainment, but we take social issues seriously. In the betting sector, this attention will be even greater.”
Finally, while state banks must operate their lotteries in partnership with private companies, Caixa will continue to operate independently.
