As deadline expires, US giants pull out of Brazil lottery deal

Two big US names – IGT and Scientific Games (SG) – have withdrawn from a partnership for setting up an instant lottery concession in Brazil.

The two companies had jointly bid for the first national lottery concession, LOTEX, almost a year ago but they were required to meet certain conditions by September 21.

The two giants had stressed the need for ensuring a distribution agreement with Caixa Economica, the operator of Brazil’s largest lottery retailer network.

The US companies said in a statement that the 13,000 lottery retailers that are part of the Caixa network are essential to the successful launch of the instant ticket business in Brazil.

The deal was reached with Caixa after long negotiations, but Caixa failed to authorise its execution by the concession deadline while a request for an extension was not granted.

Michael Conforti, the president of global strategic accounts at SG, said they were not prepared to move forward without Caixa’s distribution network. He also mentioned that the Supreme Court of Brazil on September 30, 2020, ruled that the federal government’s lottery monopoly was unconstitutional. This paved the way for Brazil’s 26 states and one federal district to develop their own lotteries, he added.

As a result of that ruling, Conforti said, they withdrew from the process to re-evaluate the future risks to their investment in Brazil.

The company official said that they would explore the possibility of re-engaging in the process if the Brazil government considers an extension of the process for Caixa to authorise and execute a contract.