São Paulo Lottery formed by IGT and Scientific Games are the concession winners

The bidder Consórcio SP Loterias was declared ‘qualified’, after the analysis and judgement of the qualification documentation, and consequently the winner of the auction, ‘for having fully and satisfactorily complied with all the conditions and requirements of the Public Notice’.

According to the publication, bidding companies may appeal against the decisions of the Contracting Commission up to the third working day following publication of the Extract in the Official Gazette of the State of São Paulo.

The full Minutes of the Preliminary Judgement of the Auction are available for consultation on the website of the Secretariat for Investment Partnerships (SPI) here. 

History of the International Competition

The auction of lottery services in the state of São Paulo initially attracted two groups in October last year. Bids were submitted on 28 October and the competition took place on 1 November last year at the B3 headquarters in São Paulo. The initiative is headed by CPP (Companhia Paulista de Parcerias), which is part of the Secretariat for Investment Partnerships.

The two bidders were the Aposta Vencedora Consortium, led by SAV Participações and AX4B Sistemas de Informática, and the SP Loterias Consortium, led by IGT Global Services together with Scientific Games, which already operates the lottery in the state of Minas Gerais. The 15-year contract foresaw investments of R$333 million.

In the dispute, the winner would be whoever offered the highest initial grant to be paid to the government, the minimum amount of which was set at R$260.7 million. Variable grants were also to be paid over the course of the concession, the total value of which was estimated at R$3.4 billion.

The measure authorises tenders for the following types of betting: specific prediction lotteries, including sports and numerical prediction lotteries (in which players try to predict the outcome of sporting events or numbers drawn); instant lotteries (scratch cards) and passive lotteries (with numbered tickets). This concession does not include fixed-odds betting and online games.

On 1 November, the Aposta Vencedora Consortium, led by SAV Participações, a consortium of Brazilian companies, won the lottery concession in São Paulo by offering the highest fixed bid of R$600,000,000.00, a premium of 130.15% over the minimum bid. The winning consortium beat Consórcio SP Loterias, led by IGT Global Services Limited, an Italian group with shares traded on the New York Stock Exchange.

The minimum grant amount was R$260.7 million and Consórcio SP Loterias offered a grant of R$486,538,006.00, a premium of 86.63 per cent. The amount offered by Consórcio Aposta Vencedora was R$465,000,000.00 million, a 78.36 per cent premium. As the difference between the bids was less than 5 per cent, the auction went to a viva voce. After four bids, the Portuguese beat the Italians.

On 8 May this year, the Aposta Vencedora Consortium failed to pay the R$600 million grant offered in the bid and was disqualified. The second-placed consortium, SP Loterias, owned by IGT Global Services, was asked to take over the contract. The group offered R$526.5 million in the auction.