The Winning Bet Consortium, led by the Portuguese company SAV Participações, made the winning bid and will be able to operate the service for the next 15 years.
Brazil.- The government of the state of São Paulo promoted an auction to compete for the concession of the state lottery service. For an amount of R$ 600m (USD 100m), the Winning Bet Consortium, led by the Portuguese company SAV Participações, will be able to operate the service physically or virtually, in prediction modes (such as sports betting) and instant modes (such as scratch cards) for the next 15 years.
The European consortium won the concession in a fierce dispute, with a bid of R$ 600m, which corresponds to 130.15 percent above the minimum bid set at R$ 260.7m (USD 44m).
The group prevailed in the bidding over the SP Loterias Consortium, led by IGT Global Services Limited, an Italian group listed on the New York Stock Exchange, which already operates the State Lottery of Minas Gerais.
It is expected that the lottery will generate R$ 3.4b (USD 579m) in revenue for the state government over the next 15 years. According to the Secretary of Partnerships and Investments of the state, Rafael Benini, the government will keep 35 percent of the gross operating revenues throughout the concession. The collected money will necessarily be donated to public health. Additionally, the project establishes 31 exclusive units and more than 11 thousand non-exclusive points for lottery sales throughout São Paulo.
The governor of the state, Tarcísio de Freitas, stated that the entire amount of the grant will be allocated to two hospitals in the interior of the state. "In addition to the fixed subsidy, we become partners in the business and start to get a share of the revenues. The more you [the winners] act, the more the state wins. The forecast is a gain of R$ 3.4b over the contract period," he commented.
The first bid from the SP Loterias Consortium was 86.63 percent higher than the minimum bid stipulated by the government. The bid from Winning Bet, which later won, was initially behind, with a premium of 78.36 percent higher, but managed to reverse it during the dispute with shouting and raised hands, a mode in which bids are made verbally.
The concession of the São Paulo State Lottery requires the development of a compliance plan to prevent money laundering and other improper conduct in betting. It also foresees control mechanisms. Among them, a form of self-exclusion for users.
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"This means that, if a person reports on the website that they do not want to play for 30 days, the portal is blocked for the profile during that period," explained the president of the Paulista Company of Partnerships (CPP), Edgard Benozatti Neto.
Winning Bet will be able to use the service physically or virtually. The company will not be obligated to offer all types of games because it must assume the responsibilities and risks of the business, according to the contract parameters.
