Brazilian State of Santa Catarina Lottery Not Going to Happen

Posted on: November 15, 2022, 09:16h. 

Last updated on: November 15, 2022, 01:48h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

In a setback for its underprivileged citizens, Brazil’s state Santa Catarina won’t be moving forward with an official lottery. Lawmakers caved to pressure from special interest groups and lobbyists who forced the project to a halt.

Brazil lottery
A Brazilian woman carries the country’s flag as she protests the recent elections. The state of Santa Catarina is facing a setback after lawmakers called off a planned lottery. (Image: NBC News)

The Santa Catarina Lottery (Lotesc), created at the start of this year, already faced an uphill battle. State leaders put it on hold earlier this year before finally terminating the initiative.

States across Brazil, including Federal District and Rio Grande, have been approving regional lotteries following a 2020 Federal Supreme Court decision. Those initiatives moved forward despite attempts to halt their progress.

Santa Catarina Steps Backward

Since last year, the administration of the Ministry of Finance has planned the lottery project. It was an effort to finance the SC Vivienda program, which builds housing in municipalities for low-income residents. The government backtracked on the proposal after receiving pressure from lobbyists, according to local newspaper NSC.

A variety of companies allegedly pressured the ministry into backing down. Among those who blocked the initiative were companies from the US and various betting operators, but the media outlet didn’t elaborate on who they were.

This past January, Santa Catarina created the State Fund for Social Promotion and Poverty Eradication. After Governor Carlos Moisés signed off on the organization, it allowed the creation of the Santa Catarina Lottery to generate resources for the fund.

The law established that the Executive Branch would be responsible for implementing and operating the lottery. At the same time, it determined that the government must allocate the net result obtained from lottery sales to actions to combat and eradicate poverty, mainly in housing.

Soon after the Federal Supreme Court clarified its stance on state and regional lotteries, Santa Catarina launched its solution. The initiative stalled almost immediately after, remaining that way until lawmakers brought it back to life last year in September.

Underhanded Tactics

While NSC didn’t specify who was to blame for the failure, certain elements stood to possibly lose ground with the arrival of the new lottery. Loterías Caixa, run by Caixa Federal Savings Bank, controls most of the big-name lotteries in the country, including Mega-Sena, Quina, and Loteca.

In the third quarter of this year, Loterías Caixa reported sales of R$5.6 billion (USD1.085 billion). This figure was the highest quarterly result in its history, according to the company. It’s 4.6% higher than last quarter and 20.9% higher than the third quarter of 2021.

Loterías Caixa is a primary source of revenue for social development projects in Brazil. In the third quarter, it gave R$2.2 billion (USD$426.2 million) to the federal government’s social programs in the areas of social security, sports, culture, public safety, education, and health.

In addition, the federal government also just approved new lottery products. This past September, Brazil created its new health and tourism lotteries to provide funding for both sectors. The new lotteries are now in the process of being rolled out.