Government Plans to Create Company to Offer Sports Betting on the Internet

07/12/2016 - 11h36

In order to help reduce the Federal Budget deficit, President Michel Temer's government is planning to create a state-owned company to prospect and offer sports betting on the internet and then to privatize it together with the Caixa Econômica Federal Bank's (Caixa) instantaneous lottery.

The expectation is to bring in R$ 8 billion (US$ 2.4 billion) to the Treasury through the sale of both businesses.

In an initial plan, the Government's idea is to attract foreign companies that operate in the sector and to privatize the state-owned firm created to offer betting on the internet.

The Caixa would remain in the venture as a minority investor.

In a second step, the Government would privatize the Caixa Instantânea, the existing state-owned firm that operates Lotex, responsible for sales of the 'raspadinha' (rub off) ticket, the instantaneous lottery.

According to estimates from the economic team, Lotex could fetch as much as R$ 4 billion (US$ 1.2 billion) for the Government, and the potential for sales of concessions for the lottery and electronic betting is even greater. In other words, both privatizations could bring in as much as R$ 8 billion (US$ 2.4 billion) according to the most optimistic estimates.

Mansueto Almeida, the Ministry's Secretary for Economic Affairs, has said that foreign companies are interested in offering electronic sports betting services in Brazil and will likely partner with national investors to compete for the business.

Several projects that are already under consideration in Congress contemplate legalizing gambling in general, paving the way for casinos and bingos. Members of the Government have indicated that they are in favor of the idea, but that no definition has been made yet.

Translated by LLOYD HARDER

Read the article in the original language