Brazil: São Paulo launches new international bidding process to operate its state lottery

The government of the State of São Paulo resumed the process of formally launching its state lottery, by publishing last week in the Official Gazette the “Announcement of International Bidding SOG 02/2022 for the Concession of the Service to a Private Company”.

This process contemplates an operating period of 20 years, and the estimated value of the contract is 935.4 million reais (about $184.7 million). The tender will grant a private operator the operation of the fixed odds lottery (sports betting), the specific forecast lottery, the sports forecast lottery, the numerical forecast lottery, the instant lottery, and the passive lottery.

The process foresees the delivery of envelopes with the documentation required for participation in the bidding on December 1, from 4:00 to 4:15 p.m., at the Public Session to be held at B3 – São Paulo Stock Exchange.

Until November 16, interested parties may send requests for clarifications and information on the bid by e-mail, answers will be sent to all interested parties on the website until November 24.

The legal and technical qualification documents must demonstrate the bidder’s capacity to carry out the activity foreseen in the international bid, in addition to the WLA, ISO 27.001, GLI-14, GLI-19, GLI-23, and GLI-33 security and responsible gaming certifications, as well as an RNG certificate issued by an international certification body. The Secretariat for Budgets and Expenditures defined the minimum payments for the modalities to be tendered, according to the following structure:

• 45% for the numerical prediction lottery;
• 50% for the specific lottery drawing;
• 55% for the sports prediction lottery;
• 65% for the instant lottery;
• 60% for the passive lottery; and
• 70% for fixed odds lottery (sports betting).

The game schemes and the minimum payments required will be defined by the concessionaires. For the preparation of the proposal of economic amounts and the eventual formulation of bids, bidders must take into account that, for the delegation of the public service object of the concession, the concessionaire must pay to the granting entity the amount offered as a fixed fee. This will be the criterion for judging the bid, and the highest amount will be taken into account as a fixed fee due, to be paid by the successful bidder as a condition for signing the contract, considering as the minimum fixed fee the amount of R$ 906,303,455, at the base date of September 2022. 

The bidding will be processed and judged in phases, initially analyzing the price proposal, ranking the proposals, and processing, if applicable, the viva voce bidding phase, and subsequently, analyzing the bid bond and qualification documents, both from the bidder that has offered the best price proposal, in accordance with the Final Bidding Protocol.

The bidding will be processed and adjudicated by the LSC, with operational support from B3 to assist in the conduct of the bidding and related activities, subject to the provisions set forth in the Final Bidding Protocol.