In a setback for its underprivileged, Brazil’s state Santa Catarina isn’t going to move forward with an official lottery. Lawmakers caved to pressure from special interest groups and lobbyists who forced the project to a halt.
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, but have now completed terminated the initiative.
States across Brazil, including Federal District and Rio Grande, have been approving regional lotteries following a 2020 Federal Supreme Court decision. Those were able to ignore the attempts to halt progress.
Santa Catarina Steps Backward
Since last year, the current 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. However, the government decided to backtrack on the proposal after receiving pressure from lobbyists, according to local newspaper NSC.
Companies from different places allegedly pressured the ministry into backing down. Among those who blocked the initiative were companies from the US and 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 it, 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 the stance on state and regional lotteries, Santa Catarina launched its solution. However, it stalled immediately after, remaining that way until lawmakers brought it back to life in September of last year.
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.
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