Brazil: Caixa Econômica Federal prepares debut in the betting market

The executive said that the deal will take place through a partnership between a lottery company recently established by the bank and a private partner.

It will be the same vehicle that will operate instant bets known as scratch cards from this year onwards.

Therefore, the next step will be online betting, in 2025.

“We already have an idea of the valuation (value of the business) that this company would have in a year, a year and a half,” he added.

According to Vieira, although it involves a partner, it is already certain that the product will carry the Caixa brand.

Until the advent of bets, Caixa practically alone dominated the lottery market in the country.

However, in recent years this reality has changed rapidly.

According to global consultancy Comscore, the online betting sector grew 281% from 2019 to 2023, with 42.5 million users in the country.

Bets: a R$100 billion business
Although it was only regulated last month by the Chamber of Deputies, the online betting market is already huge in the country.

According to betting aggregator BNL, this market generated more than R$100 billion in the country in 2023.

As a result, BNL estimates that platforms earned R$13 billion last year in Brazil, 71% more than in 2020.

This means that the bank will reach a sector already populated by dozens of betting platforms.

In a recent report, the XP team considered that regulating the sector could make it less attractive due to taxation.

Stadium construction
Vieira also revealed that Caixa signed a confidentiality agreement (NDA) with Flamengo regarding the financing of the club's stadium.

Vieira's expectation is to replicate with the Rio club a model under discussion with Corinthians, which has a debt of around R$600 million with Caixa.

The amount refers to financing provided by the bank for the construction of the Neo Química Arena, formerly known as Arena Corinthians, in 2014.

Caixa's idea is to transform clubs' debts into securities to be traded on the market, including by retail investors.

Thus, the titles would have the stadium as a kind of ballast. This way, whoever bought the bonds would be like an investor in the club.

“There are some common interests under discussion,” said Vieira in reference to discussions with Flamengo, but the executive avoided giving details.

In any case, the confidentiality agreement represents progress in relation to the progress of the conversations.

In December, Vieira stated that Flamengo had not yet defined a format for a possible deal.

The area where the Rio club, the largest in the country in terms of number of fans, intends to build its stadium is on land that belongs to a Caixa investment fund.

Vieira also said that São Paulo Futebol Clube also approached Caixa to talk.

Although it already has its own stadium, now known as Morumbis, the São Paulo club could use the stadium as collateral for its bank debts, which would then be concentrated in Caixa.