The bid for the concession of public services for the state lottery in São Paulo generated great expectations in the sector. This Monday (28), two consortia delivered the envelopes for the auction that will take place at B3, the São Paulo Stock Exchange.
The auction is scheduled to conclude at 2pm on Friday (1st).
Regulatory advancement for the lottery
The consortia in dispute are:
- Aposta Vencedora, led by the company SAV Participações
- SP Loterias, under the leadership of IGT Global Services Limited
According to information extracted from the process, the revenue expected by the state government is an impressive R$3.4 billion over the 15 years of the concession. Thus, the resources obtained from betting, which must be directed towards combating social vulnerability, will be fully applied to the health sector in São Paulo.
In June, governor Tarcísio de Freitas (Republicans) signed a decree that authorized the opening of the bidding. This action marks an advance in relation to the plans of previous administrations, which tried to create a state lottery without success.
Then, the government’s decision followed the approval of the CDPED (Privatization Program Steering Council) concession project at the end of May. The bidding involves several types of betting, including:
- Specific prediction (like sports and numerical lotteries)
- Instant lottery (scratch card)
- Passive lottery (numbered ticket)
But it is important to highlight that the exploration of lottery modalities not authorized by federal legislation or by the state of São Paulo remains prohibited.
State government commitment and challenges
Companhia Paulista de Parcerias (CPP), which is part of the Investment Partnerships Secretariat, is at the forefront of this initiative. The CEO of CPP, Edgard Benozatti Neto, aiming at the credibility of the project, stated: “We have high expectations” about the progress of the concession. This project began in 2021 under the management of João Dória, but faced resistance on the first attempt.
The current administration resolved the main technical issues that prevented the notice from proceeding in 2022, as pointed out by the Court of Auditors of the State of São Paulo (TCE-SP).
However, at the time, weaknesses included a superficial economic-financial feasibility study, generating doubts about the scope and financial parameters. Furthermore, many considered the publicity of the bid insufficient.
However, to resolve these issues, the government held public hearings and consulted the market on best practices. Another aspect considered was the lack of technical support.
The technical note estimates that the lottery market in São Paulo generates around R$9.3 billion annually. In an ideal situation, the company winning the bid should retain around 20% of this total after approximately six years of operation.
It is worth highlighting that, in addition to dealing with competition from Caixa Econômica Federal, whoever wins the auction will face competition from online betting, illegal gambling and other unregulated competitors.
However, the government believes in the growth potential of this sector, equating it with consolidated markets, such as France and England, according to Benozatti’s statements.
An innovative model for the state lottery
After the conclusion of the auction, the government of São Paulo will begin collecting with a fixed grant and, later, a variable one, depending on the revenue generated. Benozatti emphasizes the intention of creating a sustainable environment for the dealership, with a stable long-term policy.
Although state lotteries already exist in other states, the CPP’s CEO states that São Paulo is developing an innovative model, using experience in concessions and Public-Private Partnerships (PPPs).
He highlights the importance of performance indicators and the role of a regulatory agency to supervise operations.
The winning company will have the freedom to explore the activity, ensuring, however, that international certifications are implemented for winner identification and prize payment processes.
According to Benozatti, the state will only intervene where necessary, especially in actions to combat gambling disorder, ensuring a balanced dynamic in operations.
With the movement in the lottery sector, São Paulo is preparing for a new chapter in betting, promoting not only collection, but, above all, the social sustainability of the initiative.
