Sports betting

Rio State Lottery opens sports betting tender process

| By Conor Mulheir
The State Lottery of Rio de Janeiro (LOTERJ) has opened the bidding process for operators interested in providing the creation, distribution and sale of lottery and fixed-odds sports betting products in the state.

The tender will take place on 5 July this year, for an estimated contract value of BR$260.5m (£34.7m/€40.3m/$49.2m) over its 5-year duration.

The winning company or consortium will be contracted for the creation and distribution of lottery products including draw-based and instant win games, as well as fixed-odds sports betting products, and the execution of advertising campaigns related to the games.

LOTERJ has projected revenue of BR$400m for the first year of operation, increasing to BR$1.06bn in the contract’s fifth year.

A minimum payout limit of 40% of the amount played on lottery games will be put in place under the tender’s rules, although this percentage will not apply to fixed-odds sports betting.

LOTERJ has stated that the average expected prize payout on the games is 55% of the amount played.

The tender is aimed at operators who are able to create and distribute gaming products both online and offline, and is limited to companies who reach several criteria.

One requirement is that the company must have over 3000 points of sale in the state, with digital capabilities, and the company must also be a member of the World Lottery Association (WLA).

Given these criteria, the only Brazilian company which would meet the threshold to take part in the tender is the Caixa Econômica Federal, which runs Brazil’s national lottery.

Any other organisations looking to take part in the tender will therefore likely need to be part of a consortium, consisting of a WLA member and a company with access to over 3000 points of sale in the state of Rio de Janeiro.

Any non-Brazilian companies looking to take part in the process must be partnered with a Brazil-based entity in order to be considered.

In August last year, Brazil’s president Jair Bolsonaro signed a decree formally adding sports betting to the country’s Investment Partnership Programme portfolio, handing the process of selecting sports betting operators nationally to the state-owned Banco Nacional de Desenvolvimento Econômico e Social (BNDES), and the Ministry of the Economy.

Waldir Marques, undersecretary for prizes and sweepstakes at the Secretariat of Evaluation, Planning, Energy and Lottery (SECAP) within the Ministry, said at that time that at the national level, multiple operators would be allowed to enter the market.

BNDES and the Ministry said they would begin work on developing a bidding process for national sports betting similar to that used to facilitate the sale of instant win lottery business Loteria Exclusiva Instantânea (Lotex) in October 2019.

The decision to pursue that model was agreed in February last year, after plans to develop a qualitative framework, where any operator that met the licensing requirements could apply, was scrapped. 

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