Brazil: Tender for Mato Grosso Lottery Suspended
The Brazilian state of Mato Grosso do Sul opened a tender for bids to run its new lottery for two weeks, until it was shut down by a court order. From Friday, August 12, the state received bids for operating the lottery from third-party providers. Unfortunately for those involved, NGT Brasil filed a complaint about the process, which has resulted in it being halted for now.
By court order, the call for bids for Mato Grosso’s lotto in Brazil has been suspended. Markus Spiske/Unsplash
Who is involved in the lotto controversy?
Some time has passed since Brazil’s CCJR — the Constitution, Justice and Writing Commission — came together to support a bill recreating Mato Grosso do Sul’s old lottery. It was planned for the new lottery to be operated by a third party, which would be determined via a typical bidding system, as is common with casino property management, for example.
In the past, Lotesul was the local organization in charge of operating the lottery in this particular Brazilian state. Now, power would change hands, as determined by the State Secretariat of Finance (Sefaz). After the initial approval, it was up to the state’s Legislative Assembly to move forward with plans, including creating guidelines for prospective bidders and an open call for bids — a tender — at some stage in time.
Meanwhile, NGT is New Games Technology, a firm active in the global gaming industry and with operations in Brazil. The company works both with land-based and online gaming, and includes lotto and draw prizes among its offerings for clients.
Why did NGT file a complaint?
NGT Brasil filed what is called a mandamus appeal, to ask the Mato Grosso do Sul Court of Justice to take a closer look at the state’s tender. The court listened and suspended the call for bids, based on assertions by NGT that this call was not fully legal.
NGT found several things wrong with Public Call Notice 001/2022. Firstly, the way it was formulated would prevent competition. Only one company could be accredited per allotment, so other operators would have no chance to offer their services, creating an unfair monopoly for one chosen company.
Furthermore, NGT asserted that the selection process was not transparent enough, meaning a company might be chosen not for its true merit but for other more nefarious reasons. It also noted a rule that said companies that submit earlier would be more likely to be hired, though this apparently has no legal foundation.
Judge Vladimir Abreu da Silva agreed with NGT. He made a statement which better defined the accreditation process, and made clear that there should not be a limit to the number of providers awarded in the accreditation. In fact, the opposite is true: the Public Administration involved must approve all who meet the requirements of the public call. He asserted that the needs of the call — finding lotto operators — would be better served with more companies accredited.
Part of the issue has to do with a rule about population size. Mato Grosso do Sul only has about 2 million inhabitants, and a current rule sets out one contracted company per 2 million inhabitants, meaning the state would only have one provider. However, the judge maintained that this cannot stand. More than one provider must be present for there to be fairness and competition in the process.
What will happen next?
For now, the judge has decided to suspend the public call. However, it can still be rectified by relevant parties and reassessed, but the issues that NGT highlighted must be addressed for it to move forward. The judge gave a period of 10 days for an update to the call, which can be submitted to the State Attorney General’s Office.
Several Brazilian municipalities have considered new lotteries in recent months. In Bagé, a new lotto could help operating several types of lotto games in the area.
