Following seven failed attempts to sanction an effective tender process, BNDES – Brazil’s national development bank – has confirmed the sale of state-owned instant win games (scratchcard) operator LOTEX to ‘Consórcio Estrela Instantânea’ – a 50/50 joint venture consortium formed by IGT and Scientific Games Corporation (SGC).
The IGT-SGC vehicle secures a 15-year concession, having been the only entity to bid on BNDES reformed LOTEX auction which took place at the Sao Paulo Exchange on 22 October.
Paying an initial R$97 million (€21m), Estrela Instantânea will replace CAIXA, Brazil’s federal bank, as the operator of LOTEX which has serviced all of Brazil’s lottery contracts since the 1960s.
Agreeing to BNDES’ reformed terms, IGT-SGC are set to pay a further seven instalments of R$103 million (€22m), valuing the LOTEX contract at R$ 820 million (€180m) for Brazil’s ‘PPI Partnerships & Investment Program’.
Operational terms will see the IGT-SGC consortium pay 17% of revenues to the Brazilian government, which targets generating R$19 billion (€4bn) in funds during the 15-year concession.
The IGT-SGC concession is expected to begin by mid-2020, with both technology groups issuing a joint statement: “The award of the Brazilian Lotex concession represents an important step towards the privatisation of lottery instant games in Brazil, the world’s eighth-largest economy.
“This business partnership will benefit the people and government of Brazil and brings together the vast experience and market leadership of global leaders in the instant game market to help position Lotex for success.”