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Brazil’s Congress has approved a bill which authorises the creation of two new national lotteries to benefit health and tourism, with the government seeking private operators to run the draws.
Bill 1561/2020, first proposed in the first two months of the pandemic with the aim of using revenue to fund the healthcare crisis created by COVID-19, has undergone many changes since its inception.
Provisions of the final text approved on Tuesday (August 30) by the Chamber of Deputes that stipulate funding healthcare, specifically nurses’ salaries, remain intact.
However, initially Caixa Economica Federal, a Brazilian public bank and existing national lottery operator, was meant to oversee the two new lotteries. Now, they will be under the purview of the Ministry of Economy, with the intention to have the private sector bid on running the operations.
The new lotteries will be able to offer both retail and online fixed-odds sports-betting games, in addition to traditional lottery numbers draws, according to the bill.
The bill’s rapporteur, Giovani Cherini, argued the change in oversight was beneficial, saying that “the Ministry of Economy, which has a competent sector for it, which will supervise, so everything will be within the law. We want to open the possibility to the private sector.”
But not everyone agrees on the efficiency of the models as approved by Congress.
Luiz Felipe Maia, a partner at Maia Yoshiyasu and Brazilian gambling law expert, declared it “a complete mess”.
“Now we will have two other lottery operations overseen by the Ministry of Tourism and the Ministry of Health, but the concession rules will be determined by the Ministry of Economy in up to 30 days from the publication of the law.
“However, the lottery overseen by the Ministry of Economy was supposed to be under the authorisation model, instead of concession. So we may end up having different licensing modalities depending on the ministry under which the operation is performed.”
Initially, the tourism lottery revenue was earmarked for a special fund to help the industry through COVID-19, which has since been changed.
The revenue will now be distributed as follows: for numbers games, 95 percent will cover the expenses of the operating agent and 5 percent will go to the National Health Fund (FNS) for the Health Lottery or to the Brazilian Agency for the Promotion of International Tourism, in the case of the Tourism Lottery (Embratur); and for sports forecasts and fixed-odds bets, 3.37 percent of revenue will go to the FNS or to Embratur, 1.63 percent will go to sports teams authorising the use of their trademarks for the lotteries and the remaining 95 percent to the operator.
If the legislation is signed into law by Brazil's President, the two new federal lotteries would continue a trend towards significant expansion of the Brazilian lottery market.
In September 2020, the Supreme Federal Court ruled that the federal government did not have a monopoly on lottery games, allowing Brazilian state and municipal governments to create their own lotteries.
More than 20 states and several cities have taken steps to establish their own local lotteries in the past two years.
