The South American nation of Brazil is attempting to reduce the size of its government and address its substantial budget shortfall. To achieve this, they are divesting a portion of their national lottery, with the aim of generating approximately 482 million pounds from the sale. This move follows a phase of fiscal tightening in Brazil, as the country grapples with a significant budget deficit, partly attributed to the expenses incurred from hosting the Olympic Games and the FIFA World Cup, events known for their considerable costs.
The Brazilian Development Bank (BNDES) is overseeing the sale and will conduct an auction for the Loteria Instantanea Exclusiva (LOTEX), a lottery previously managed by the government. While this plan had been under consideration for some time, it was only in the preceding month that President Michel Temer formally approved it.
The government aspires to secure double the minimum bid price, with the proceeds earmarked for reducing the 159 billion reais deficit. Nevertheless, Finance Minister Mansueto Almeida indicated that the auction will not take place until December, implying that the funds will not be available until 2018. In a tweet, Almeida expressed his desire for the proceeds to arrive in 2017 but acknowledged that these resources are not factored into the current year’s budget.
The delayed divestment of Brazil’s lottery behemoth implies that the decision wasn’t motivated purely by a need for revenue. It demonstrates a rising feeling among Brazilians for a less interventionist government role in the economy. This sale presents a prime chance for global investors who still view Brazil as a possible economic leader. The successful bidder will secure a position in a profitable sector, providing one of the limited legal avenues for gaming in this country of 207 million citizens.
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