Zona de Azar Brazil – Brazil: Suspension of Lotesul Bidding Due to Allegations of Favouritism

Brazil.- March 19, 2025 www.zonadeazar.com On 17 March, the Mato Grosso do Sul government suspended the R$51.4 million auction for the creation and administration of Lotesul, the state lottery. During the opening of the process, three companies submitted bids, but their names were not disclosed. The winning bid provided for 21.57 per cent of the revenue to be passed on to the government, as reported by Correio do Estado.

The auction lasted less than three minutes before it was interrupted due to a request for clarification from Rafael Willian de Melo, received on 15 March. Auctioneer Bruno Pereira Coelho justified the suspension to guarantee the transparency of the process and avoid future questions about possible undue restrictions on the competition.

The official documentation indicated that the suspension would allow for a more detailed evaluation of the proposals and would avoid prejudice to the bidders, since the delivery time was an essential criterion. The resumption of the tender would be announced in the Official Electronic Gazette (DOE/MS).

Before 15 March, the process had already received two requests for objections and one for clarification. Despite this, the tender was still scheduled for the 17th. The new date will now depend on the decision of the State Secretariat for Administration.

Of the three competing companies, one offered a minimum transfer of 16.17 per cent of revenue to the state government, while the other two presented higher figures: 17.2 per cent and 21.57 per cent.

In his request for clarification, Rafael Willian pointed out a contradiction in the public notice: in one section, it was forbidden to identify the bidder when filling in the proposal, while in another it required the company’s name, signature and stamp. He questioned whether all the fields should be filled in or left blank.

It is estimated that the company that wins the tender could earn up to R$1.4 billion a year, according to the state government’s forecast. Although the public notice mentions an average annual revenue of R$51.47 million, the terms of reference of the State Department of Finance (Sefaz) indicated that revenues could be much higher.

According to the document, the operation of lottery modalities could generate up to 0.85% of the state’s GDP. In 2022, Mato Grosso do Sul’s GDP was R$166.8 billion, which would result in potential revenue of R$1.417 billion. For 2025, the State Secretariat for the Environment, Development, Science, Technology and Innovation (Semadesc) forecast a GDP of R$227.8 billion, which could increase Lotesul’s annual turnover to almost R$2 billion.

If the winning company’s revenue reached this figure, the state government, which would receive at least 16.17 per cent of the gross revenue, could collect R$229 million annually. If the best proposal (21.57 per cent) were approved and GDP reached the predicted figure, this amount could reach R$430 million per year.

Edited by @pererarte   www.zonadeazar.com