The State Lottery of Rio de Janeiro (LOTERJ) has launched a tender to operate a lottery and fixed odds sports betting in the state.
The contract, valued at BRL 260.5m (£34.7m), will run for five years and will allow the winning operator to distribute fixed odds sports betting products, as well as raffle and instant win products.
According to estimates provided by LOTERJ, the winning operator could potentially generate revenue of R$400 million in the first year, rising to R$1.06 billion in the final year of the five-year contract.
The tender has a minimum payout limit of 40% of the amount played in lotteries, a limit that does not apply to sports betting in the state. According to LOTERJ, the average expected prize payout in lotteries is 55% of the stake.
The tender process is available both online and to retail operators, subject to several different criteria. International operators wishing to apply to participate in the tender must do so in partnership with a Brazilian company to be considered.
In addition, the proposed operator must operate more than 3,000 individual points of sale in the state and be able to operate on the Internet, and must also be a member of the World Lottery Association (WLA).
Brazil's national lottery operator and state-owned bank, Caixa Econômica Federal, has over 13,000 points of sale throughout Brazil and could potentially partner with an international operator.
The tender announcement will be made on July 2. The winning company will have to pay BRL 30 million to LOTERJ within five days of that date, otherwise a different party will be chosen.
At the national level, fixed odds sports betting has yet to launch despite being signed by President Jair Bolsonaro in December 2018.
The original roadmap called for a two-year legalization and regulation process to enable local authorities to better understand the regulation of fixed odds sports betting while interacting with international regulators.
In June 2020, the Brazilian government signed a decree to privatize and develop a fixed odds sports betting regulation project under the Brazilian National Privatization Program (PND).
According to the ruling, fixed odds sports betting will be included in the Partnership Investment Program (PPI) of the broader PND scheme, overseen by the National Bank for Economic and Social Development (BNDES).
The PND seeks to reduce the burden on the state through privatization while increasing economic revenues in the Latham area by encouraging deeper investment from international and local firms.
However, the launch of fixed odds sports betting at the national level has been severely affected by the Covid-19 pandemic, which has killed more than 400,000 Brazilian citizens and required public resources and time.