Rio de Janeiro ignites sports betting contract tender process
State Lottery begins search for lottery and betting partner for five-year term
The State Lottery of Rio de Janeiro (LOTERJ) has launched the tender process for the operation of lottery and fixed-odds sports betting in the state.
The contract, which is valued at BRL$260.5m (£34.7m), lasts for five years and would allow the winning operator to distribute fixed-odds sports betting products as well as draw-based and instant win lottery gaming products.
According to estimates provided by LOTERJ, the winning operator could potentially generate revenue of BRL$400m in its first year, rising to BRL$1.06bn in the final year of the five-year contract.
The tender stipulates a minimum payout limit of 40% of the amount played on lottery games, a limit which does not apply to sports betting in the state. LOTERJ estimates the average expected prize payout on lottery games is 55% of the amount wagered.
The tender process is accessible to both online and retail operators, subject to several different criteria. International operators looking to submit a tender must do so in partnership with a Brazil-based entity to be considered.
In addition, the prospective operator is required to operate more than 3,000 separate points of sale in the state and must have the ability to operate online, while they must also be a member of the World Lottery Association (WLA).
Brazil’s national lottery operator and state-owned bank Caixa Econômica Federal has more than 13,000 points of sale across Brazil and could potentially partner with an international operator.
The tender announcement will be made on 2 July. The winning business will be required to pay BRL$30m to LOTERJ within five days of this date, or another party will be selected.
At a national level, fixed-odds sports betting has yet to launch, despite being signed into law by President Jair Bolsonaro in December 2018.
The initial roadmap provided for a two-year legalisation and regulation process to allow local authorities to develop a greater understanding of fixed-odds sports betting regulation by interacting with international regulators.
In June 2020, the Brazilian government signed a decree including the privatisation and drafting of the regulation of fixed-odds sports betting as part of Brazil’s National Privatisation Program (PND).
Under the resolution, fixed-odds sports betting would be included within the Investment Partnership Programme (PPI) of the wider PND scheme, under the oversight of the National Bank for Economic and Social Development (BNDES).
The PND aims to reduce the burden on the state through privatisation while also increasing economic revenue in the Latam territory by encouraging deeper investment from international and local firms.
However, the launch of fixed-odds sports betting at a national level has been severely affected by the Covid-19 pandemic, which has claimed the lives of more than 400,000 Brazilian citizens and has proved a strain on government resources and time.