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Brazil attempts to lure bidders with new Lotex proposal

PPI also known as Brazil’s Investment Partnership Programme has assumed a new method as seems they’ve concluded on privatizing the nation’s instant win gaming industry Lotex (Loteria Exclusiva Instantânea). This will allow bidders to pay their earnings in 8 installments.

Sometime back, the sum was pegged at a minimum of R $542.1million (£107.1 million/€118.4 million/$130.8 million). Bidders used to pay it in 4 installments.

After a general indifference in earlier auctions for the tender, bidders can now stretch concession payments over an increased period of time. On the condition that the first payment is BR $96,968,123.51.

Additionally, PPI has reduced the conditions for bidders. Beforehand, single entity bidding for a concession must show they had worked an online gaming or instant lottery business which generated a sum of BR $1.2 billion over a year. Thankfully, it has been reduced to R $1.2 billion, which is more than half the previous sum.

In a situation where a consortium places a bid, at least a member must have earned a sum of R $175 million from an online business or instant lottery over 12 month period.

Following the release of the invitation to bid on the 30th of June, interested firms should start submitting their requests for clarification and it’ll end on the 27th of September. Written proposals, together with financial offers, must be submitted to the granting committee of PPI on the 17th of October together with a bond of R$25 million. The proposals are valid for a minimum of 1 year.
Bids will be unsealed on the 22nd of October. By then, each participant will be ranked on the grounds of their offers. The best bidder will be chosen to negotiate with the PPI for the concession.

Participants who lose their bid will have to lodge their appeal between 5 – 12 November. Objections to appeals will be lodged from 18 – 25 November. The granting committee will make a final judgment on all the appeals on the 2nd of December, before approving its decision on the firm that secures the tender on the 23rd of December.

If everything goes according to book, the final contract will be signed on or before the 16th of April, 2020.
On the other hand, there’s no assurance that the entire process will not experience a single hiccup. Efforts to privatize Lotex have hit several setbacks since it came to light in 2017.

Lotex is presently run by the largest bank in Brazil CAIXA, (Caixa Econômica Federal). It is being privatized as the nation seeks to lower its fiscal deficit by selling state assets.

Over the years, the tender auction was rescheduled several times because of the federal government demanding an unreasonable price for Lotex. Their stance has led to several eligible companies showing a general lack of interest.

In 2019, Jair Bolsonaro, the President of Brazil, promised to finish the entire process in the first 4 months of the year. He doubled back on that promise and pushed it to the 26th of April, then to the 9th of May and once again, it was pushed to the 28th of May. Yet, the tender did not attract any notable interest, which made the government postpone it again.

Although future plans for Lotex is still uncertain, there is significant progress as regards regulations on sports betting, after a rule that gave the Congress of Brazil a 2 year time frame to create a legal framework for the industry was signed into law in 2018.

SECAP (Brazil’s Secretariat of Evaluation, Planning, Energy and Lottery) unveiled a public consultation on problems like if a set or an indefinite number of licenses should be issued, this ended on the 31st of August.

Source: https://www.igamingbusiness.com/news/brazil-tries-tempt-bidders-new-lotex-proposal

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Jo Arazi

Jo Arazi

Jo is a seasoned writer and analyst of the cryptocurrency market with several years of experience writing for various blogs and websites worldwide. He has worked with several crypto startups and is a supporter of credible crypto projects worldwide.

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