The South American nation of Brazil is exploring the possibility of selling the operational rights to its state-run lottery, with the goal of reducing the government’s economic footprint and generating much-needed revenue. This action is projected to bring in approximately 2 billion reais (equivalent to £482 million) for the government.
This choice comes at a time when Brazil is grappling with a substantial budget shortfall, a significant concern for the administration. Recall the lavish expenditures on the Olympics and the World Cup? Those invoices are now due, exacerbating the strain.
The onus of managing the sale rests with Brazil’s development institution, BNDES. They will be coordinating a public sale for the national lottery, LOTEX. The concept of divesting LOTEX has been circulating for some time, but it was only in the preceding month that President Michel Temer formalized it.
The administration is anticipating a significant sum, targeting twice the minimum bid price. The strategy is to utilize these funds to address the country’s massive 159 billion reais deficit.
Nevertheless, don’t anticipate a rapid resolution. Finance Minister Secretary Mansueto Almeida has suggested that the auction will not occur until December. This implies that these funds will not be included in the 2017 budget.
As Almeida conveyed on Twitter, “It would be ideal if the income arrived in 2017. However, it is not incorporated into the current year’s budget.”
The postponement of the auction for Brazil’s lottery management sends a strong message to global financiers. It illustrates that the choice to denationalize is not merely fueled by urgent fiscal requirements, but instead signifies a wider movement towards a less government-dominated economy, a sentiment shared by numerous Brazilian citizens. This offers a singular prospect for investors aiming to establish a presence in a substantial developing market. The successful bidder will acquire authority over one of the limited lawful avenues for gaming in this country of more than 200 million inhabitants.
