Brazil to Sell State Lottery in Bid to Boost Finances and Reduce Deficit
The nation of Brazil is exploring the divestiture of its state-run lottery, LOTEX, as part of a broader initiative to reduce governmental influence in the economy and address its ongoing budgetary shortfall. This action, integrated into a larger privatization drive, is projected to infuse approximately 20 billion reais (equivalent to 4.82 billion pounds) into state reserves. The South American country has been contending with a serious financial strain, compounded by substantial outlays on hosting the Olympics and the FIFA World Cup in recent times. These occasions, while prestigious, imposed a considerable burden on the nation’s economic resources, contributing to the already significant budget deficit.
The task of managing this sale rests with Brazil’s development institution, BNDES. They will conduct a bidding process for LOTEX, a possibility that has circulated for some time but only gained official momentum last month under the leadership of President Michel Temer. The administration aspires to secure a price considerably exceeding the minimum offer, aiming to utilize the influx of capital to reduce the existing 159 billion reais deficit. Nevertheless, Finance Minister Mansueto Almeida has stated that the auction, scheduled for December, will not affect the 2017 budget. “It would be advantageous if the revenue were to materialize in 2017,” Almeida communicated via Twitter, “but these funds are not factored into the current year’s budget.”
The holdup in the transaction is quite telling. It implies that this choice wasn’t merely about addressing budgetary shortfalls. It demonstrates a broader change within Brazil, a wish to witness the government reduce its role in the economy. This is a significant development for global investors who have long recognized Brazil’s possibilities. The sale presents a unique chance, a scarce opening to access a market exceeding 207 million individuals eager for a slice of the pie. With limited lawful wagering choices present, securing this agreement would be a substantial victory for any financier.