IGT and Scientific Games Withdraw From Brazilian Lotex Concession

In a significant development for the global lottery sector, leading gaming solution providers International Gaming Technology (IGT) and Scientific Games announced their withdrawal from Brazil's highly anticipated instant lottery concession. The two industry giants, initially awarded the concession in 2019, cited a series of unfulfilled conditions and a denied extension request as primary reasons for their decision.

The concession, which aimed to revitalize Brazil's instant lottery market, was contingent upon several conditions that were to be met by September 21, 2020. However, both IGT and Scientific Games encountered considerable hurdles in fulfilling these requirements within the stipulated timeframe. Their subsequent request for an extension was ultimately denied by the Brazilian government, prompting their joint decision to step back from the lucrative contract.

In a joint statement, the companies indicated that their withdrawal was not necessarily final. They expressed a willingness to reconsider their position and potentially re-engage in the process should the Brazilian government reverse its stance and grant the requested extension. This suggests that while immediate challenges led to their exit, the long-term potential of the Brazilian market remains attractive under more favourable conditions.

Challenges with CAIXA Economica

A major factor contributing to the delays and the eventual withdrawal was the reluctance of CAIXA Economica, Brazil's largest lottery retailer operator, to execute a crucial distribution agreement. CAIXA boasts an extensive network of approximately 1,300 retailers across the country, a partnership deemed essential for the successful operation of the instant lottery by IGT and Scientific Games.

Despite the finalisation of the contract, CAIXA had, for over two months, not authorised its members to honour the agreement. This inaction created a significant operational bottleneck, preventing the concession from moving forward as planned and undermining the commercial viability of the venture for the international partners.

Impact of Regulatory Changes

Beyond the issues with CAIXA, the companies also highlighted a recent court judgment that further complicated the landscape of Brazil's lottery business. This ruling granted individual Brazilian states the authority to operate their own state lotteries, effectively ending the long-standing monopoly previously held by the federal government.

This decentralisation of lottery operations raised concerns that the Brazilian lottery market might not be as profitable or exclusive as it appeared when the concession was first awarded in October 2019. The prospect of increased competition from state-run lotteries likely diminished the perceived value and potential returns of the federal instant lottery concession for IGT and Scientific Games.

Walter Bugno, Executive Vice President of Business and Strategic Initiative for International Gaming Technology, and Michael Conforti, President of Global Strategic Accounts for Scientific Games, represented their respective companies in the joint statement regarding the withdrawal.

About International Gaming Technology (IGT)

International Gaming Technology (IGT) is a globally recognised leader in gaming solutions, renowned for its comprehensive portfolio spanning gaming machines, online casino content, sports betting platforms, and lottery solutions. With a workforce exceeding 12,000 employees, IGT maintains a significant presence in over 100 countries worldwide. While its operational headquarters are located in London, UK, the company also operates key offices in Las Vegas, USA; Rome, Italy; and Providence, Rhode Island. IGT collaborates with numerous casinos, gaming operators, and lottery organisations globally and is deeply committed to promoting responsible gambling practices through research and initiatives.

About Scientific Games

Scientific Games Corporation is a prominent American technology company specialising in providing a wide array of casino game products and services. Its offerings include popular table games, innovative instant lottery games, and various other gambling solutions. Headquartered in Las Vegas, Nevada, USA, Scientific Games serves gambling companies across the globe. The company operates through numerous subsidiary entities and employs over 10,000 staff, fostering strategic partnerships with many of the leading names in the international gambling industry.