São Paulo state lottery tender DQ leaves consortium in disarray
A Brazilian lottery tender has ended in disaster for various companies and individuals involved according to an investigation carried out by SBC Noticas – Brasil.
Portuguese consortium Aposta Vencedora (CAV), formed by SAV Participações and Brazilian firm AX4B Sistemas de Informática and headquartered in the capital of Brasilia, put in a winning bid to run the São Paulo lottery back in November 2024.
The company won the tender of the state lottery with a bid of R$600m (€93.8m). The state’s decision to choose this bid was understandable when the numbers were considered, with it representing a huge mark up on the asking price of R$260m.
However, it has emerged several months down the line that the company has since been disqualified from the tender process and will not hold the 15-year licence for the lottery in Brazil’s most populous state.
This is because the firm failed to pay the fee, which it was required to do within 60 days. According to SBC Noticas, the state government granted another 10 business days for the payment to be made, but this still not done, and so the state executed the group’s deposited R$3.3m performance bond to cover bidding costs.
“We granted every possible deadline, including an additional one, which is our standard,” said Rafael Benini, Secretary of Investment Partnerships for the State of São Paulo.
“But since they didn’t pay, we’re executing the bond and moving on to the second-place bidder.”
Another win for IGT?
The second place bidder in question is SP Loterias Consortium, led by the international technology group International Game Technologies (IGT), already a known player in Brazil via its contract with the Minas Gerais lottery.
IGT’s bid of R$526.5m was far eclipsed by the R$600m offered by CAV. However, it has now been invited to assume the contract, in what would be a huge boost to its operations coming shortly after securing a nine year extension to one of its flagship partnerships, with the Italian Lottery.
The 15-year contract is a lucrative one, but also one requiring substantial investment and a lot of effort – something IGT has proven it is willing to put in with other state and national lotteries across multiple markets.
Contract terms include investments of R$333m, the installation of 31 exclusive retail units and over 11,000 non-exclusive points of sale across the state of São Paulo.
The state operator will be able to conduct both retail and online activity and be given freedom to set prices, marketing strategies and lottery formats, the latter including sports betting, numbers games and instant lotteries.
Showcasing the revenue that can be generated through this contract, the state government expects to raise over R$3.5bn over the 15 years, with funds directed towards healthcare.
It is important to note, however, that while IGT has been invited to accept the tender, the company has not confirmed whether it will do so or not, and as of the writing of this article (21 May) there has been no update on the company’s news page.
Wider implications
The future may look rosy for IGT – should it accept the contract – but for CAV and its employees the picture is not so perfect, according to SBC Noticias. Firstly, the firm’s employees appear to have been unaware of the firm’s disqualification until it was announced in the official state gazette on 8 May.
On 5 May, the company held its regulator meeting during which a consultant would visit with a schedule. According to SBC Noticias’ source, Carol (whose real identity has been kept private), this schedule ‘was fake’.
Carol also told the outlet that she had been approved by CAV CEO Fernando Eduardo Cabral Paes de Sousa Afonso and SAV Partner Alexandre Manoel Angelo da Silva as part of a wider effort by the company to approach experienced directors and give more clout to its bid, despite not having the cash necessary to pay for the contract.
Both Afonso and Manoel have extensive backgrounds in the lottery. The former used be to Secretary of Planning, Energy, and Lotteries at the Ministry of Economy under ex-Brazilian President Bolsonaro, while the latter is the former President of the Gaming Department of the Santa Casa da Misericórdia de Lisboa, a non-profit organisation in Lisbon, Portugal.
“They were playing Shark Tank. They never had the money,” a former CAV director now filing a complaint against the company with the Public Prosecutor’s Office told SBC Noticias.
“They made the offer and joined the bidding process, thinking they would find investors, without even doing market research. They didn’t understand the size of the market. They threw money at the auction, thinking people would throw money back at them [as investment].”
With employees now asking for payment, SBC Noticias Brasil states that CAV leadership are now shifting blame between each other, from CEO to Compliance Director to the accounting office and other board advisors. On 16 May, Alfonso told SBC Noticais’ source ‘Carol’ that all sarees ‘will be paid today’, but apparently this has still not happened.
Lastly, as expected, the whole saga could lead to legal repercussions. Legal experts told SBC noticias that CAV may have violated Brazilian anti-corruption laws which hold companies accountable for actions against public administration, including bidding on contracts with no intention of fulfilling them.
Other potential braces could include fraudulent execution of government contracts, intentional deception for unlawful gain, or administrative misconduct – this will all depend on what angle prosecutors decide to take, if any.
https://lotterydaily.com/2025/05/22/highlighted/sao-paulo-lottery/